Quote:
Originally Posted by Unregistered
why? Isnt front load a constant pay?
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It's constant insofar as you stay in the firm (i.e. they aren't going to claw it back at the end of the year for "poor performance" or if they give you a "low bonus").
The way the bonus works is that you are "guaranteed" (unless you quit) x mths of bonus a year, that is frontloaded into your salary. And at the end of the year you get a discretionary y mths of bonus. Ignore the x mths of bonus (that's just your salary calculated another way for their benefit).
Essentially, it just allows the firm to get away with paying a "lower" bonus since a 6-7 mth bonus is actually 2-3 mths, as about 4 mths have been "frontloaded" into your salary throughout the year. Additionally, your 2-3 mths bonus is not even as high as you expect, since the bonus is based on "un-frontloaded" salary. It also allows firm to clawback your frontloaded "bonus" component of your salary if you choose to quit (since the bonus is contingent on you staying for the full quarter/mid-year/year).