Quote:
Originally Posted by Unregistered
Can someone explain to me in simple terms what is so bad about frontloading practice?
At the end of the day, no difference to non-front-loaded structure if you compare your total comp on an annual basis right.
Plus, isn't it better to get your bonus component sooner rather than later? You can do more with it earlier, like put more in a HYSA account or invest it or whatever.
Anything I'm missing?
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Good thing about front-loaded is if you decide you want to quit halfway, you already received some of your bonus. (every month your pay includes your front loaded bonus)
Bad thing about front-loaded is that your salary is not really as high as it is.
Eg: With the performance you made that year, the firm pays you 30k at end of financial year as a bonus. But the bonus you will actually receive from that "30k" is only 6k. because the "24k" has already been paid to you throughout the year in your monthly salary.
This means that on paper your salary is "high" and "competitive" but in actual fact it is low and dependent on you performing well. tldr: you are only getting 60-80% of the remuneration they offered when signing the employment contract.