[Allergic2CPA]

I was wondering what the community’s thoughts are on considering/accepting offers mainly due to an increase in pay of 15-20% via bonuses.

I personally never had bonuses as part of my compensation and given their discretionary nature, I’m hesitant to go down that road.

The general thought is that they are pretty much guaranteed unless something happens in the economy, the firm misses their profits targets/loss money or having a not so great job performance.

Other than receiving them sooner, not sure if quarterly bonuses are more advantageous in some way vs. annual ones.

Any thoughts?

FAR 46*, 77
AUD 70, 79
BEC 67, 82
REG 75

Texas License July 2013

Used Yaeger lectures based on Wiley textbooks

*Studied less than two weeks, forgot I had purchased NTS.

[mla1169]

“The general thought is that they are pretty much guaranteed unless something happens in the economy, the firm misses their profits targets/loss money or having a not so great job performance.”

I hope you don't believe this. In some companies that may be true but in many others, the criteria to achieve the bonus is a moving target in order to make the bonus expense exactly what the powers that be want the bonus expense to be. Good year with sales won't mean a bonus if the company is trying to reduce overhead. What was a bonus on sales over $1m could very well become a bonus on sales over $5m the following year, nearly unattainable.

Bonus structure like everything else is determined by the stakeholders in the company.

That said if youre considering a company that has a long track record of bonus payouts, it is a compelling arguement to accept the job.

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[Mamabear]

Bonuses should be factored in but salary is more reliable. Our bonus plan changes every year based on how well we are doing, according to our majority shareholder, which is also the CEO of our parent company. In the 4 years I have been a manager here I only received a bonus for 2013 and 2014. Nothing before that company-wide since 2007. It can be a great boost, but you should not consider it part of your guaranteed pay. Benefits, bonus, and salary all play a part in deciding between jobs. Just don't think of a bonus as guaranteed.

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[Maddie P]

I agree with you, it sounds ambiguous. My firm sets specific metrics your department/manufacturing facility needs to meet, which changes every year. However, my firm is privately owned, so things might differ.

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[TiffaNiffaNi]

It clearly depends on the company and the bonus structure, but I typically look at it this way:

If base salary is $50k with bonus potential of 20% or $10k, my compensation offer is $55k. Meaning that I take the bonus amount and split it in half and add that to the base. This makes sense considering bonuses aren't guaranteed…and in my example, you can see that you would be making anywhere from $50k to $60k so a good benchmark to be able to compare offers, etc. is $55k.

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[Allergic2CPA]

Thanks guys for the feedback. I pretty much had the gut feeling to stay away from such propositions unless factors other than bonuses are at play.

FAR 46*, 77
AUD 70, 79
BEC 67, 82
REG 75

Texas License July 2013

Used Yaeger lectures based on Wiley textbooks

*Studied less than two weeks, forgot I had purchased NTS.

[Author]

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