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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Magnon-Statche on August 27, 2015, 11:41:34 AM

Title: Job opportunity, Salary and Bonus Expectations
Post by: Magnon-Statche on August 27, 2015, 11:41:34 AM
Hi Everyone,

A company contacted me and asked me to apply for a engineering project manager position.  I've gone through some interviews which gone very well.  I could possibly have one more interview, but prior to that they have asked me to respond to a few questions.  One of the questions being what are my salary and bonus expectations.

I'm comfortable negotiating the salary for the position, but I have not idea how to respond to the bonus part.  I've never had bonus's available to me.

I'd appreciate the insight of the mustache community.

Side note, I'm an active member on the forums.  I posted under a different name off the chance that a coworker/boss are on the forums.  They read the articles so...
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: Lis on August 27, 2015, 11:58:33 AM
First thing with bonuses that, while they are a nice perk, they are never guaranteed. So even if you negotiate for a $1m bonus, they are not obligated to pay the full amount, or any amount, at year end.

That being said, do you know anyone at that company, or at least anyone in a similar type position in that field? I also don't think it would be unreasonable to reach out to your contact at that company and ask what their bonus system is like.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: boarder42 on August 27, 2015, 12:12:02 PM
i work at an engineering firm with bonus's and they arent really bonus's they are expected deferred salary.  It gets really old b/c its this carrot they hold over your head all year.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: Magnon-Statche on August 27, 2015, 01:03:39 PM
First thing with bonuses that, while they are a nice perk, they are never guaranteed. So even if you negotiate for a $1m bonus, they are not obligated to pay the full amount, or any amount, at year end.

That being said, do you know anyone at that company, or at least anyone in a similar type position in that field? I also don't think it would be unreasonable to reach out to your contact at that company and ask what their bonus system is like.

i work at an engineering firm with bonus's and they arent really bonus's they are expected deferred salary.  It gets really old b/c its this carrot they hold over your head all year.

Good points.  I'm not terribly concerned about the amount of bonus as long as my salary is competitive.  I am not aware of anyone I know who currently works for this company.

I really just have no idea what a typical bonus would be, 10%?
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: mom22boys on August 27, 2015, 01:08:09 PM
I work in R&D and get a bonus each year, based on performance.  The last couple years I've received a 15% bonus. Just as a reference point.....
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: frugaliknowit on August 27, 2015, 01:11:51 PM
You have nothing to gain by fully answering that question.  Try something like "Market range/competitive".  If forced to, you might say, "I am targeting a salary of around $X.   What range is budgeted for the position?".  Even better if you can avoid it...
I wouldn't quote on the bonus.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: bognish on August 27, 2015, 01:16:10 PM
Not an engineer, but a controller, so I have seen the bonus system for every employee at a few companies. Usually the bonus % negotiated on hiring is the max payout. It gets cut down if the company does not hit the high end of the profit range, or you do not over achieve on each of your annual goal. A max of 10% would get paid out at 5%  most years and almost never at 10% at any of my previous employer. Knowing that I would expect a non-manager senior engineer to be at 15-20% max bonus target. Department manager would be 20-30%.

I always push for a higher salary and am willing to give up bonus % to get there, because if the company has a bad year it is easy to pay out zero bonus. As others have said, I would leave the bonus section empty if you are still interviewing.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: markum9 on August 27, 2015, 01:18:32 PM
If you are talking about an annual bonus, 10-15% seems about right, but it Is highly dependent on the company and industry.  You may also be able to get a one time sign on bonus.  I just switched companies and they gave a sign on bonus which made up for the bonus, restricted stock, etc that I left behind at my old company.  Since a lot of times the bonus is tied to company performance, it would be good to ask what their average payout has been.  Usually your percentage is just a target and can vary based on company and/or individual performance.  If it's a large company check out the website Glassdoor.  They should have salary and bonus ranges for your job or a similar one.

I encourage you to negotiate with them no matter what their first offer is.  As long as you are reasonable and professional about it, the worst they say is no.  It's the easiest time to get a bump up in salary.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: Roboturner on August 27, 2015, 01:22:02 PM
in PE bonus targets are usually 20-40% sometimes more combo of cash/stock
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: Phil_Moore on August 27, 2015, 01:29:24 PM
Whenever I've negotiated I've just asked for reassurance that the bonus is competitive for the industry, then focused completely on the salary I want.  At the last couple of places I've worked the bonus has been discretionary and entirely opaque in it's calculation. So I treat it as, well, a bonus, I budget with zero dollars/pounds in mind.  Mine has varied wildly, I'd have to check but probably 10-40% of salary over the years and I do very consistent work.

However I've never accepted a job where I didn't know someone who worked there already, at least well enough to let me know they aren't a shower of wankers.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: Axecleaver on August 27, 2015, 01:53:57 PM
Standard bonus is 15-20% of your salary. Bonuses are partially, and often completely, arbitrary and if you count it in the comp, only use the non-arbitrary part. Ask for documentation on bonus amounts for this role for the past five years. Ask how the bonus is calculated. Usually, there's a portion you're responsible for (like performance rating) and a portion that hinges on company performance (largely out of your hands). Really get in the weeds on this and you may find that the bonus is not a real thing.

The last job I worked, I secured a 25k bonus for helping to sell a major deal, but I only got 3k of it. They reserved the right to suspend payments if the delivery team wasn't able to hit the bid margins (which never happens). Your hope is that the deliver team keeps things on the rails for a while and you can get a few payments in before things blow up. I've had other jobs where the bonuses were more consistent.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: SF'd on August 27, 2015, 02:55:31 PM
If you don't know anyone at the firm, or in a similar role at a different firm, I'd use glassdoor (I'd use it regardless as a baseline/basic data point for negotiating). Look at comparable roles at your target firm and similar firms to get an idea of what to expect. I agree with the poster above though, try to skirt this question as long as possible unless you really like your current job and are stretching for a significant increase - then make that fairly clear so you're not wasting each others time.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: beee on August 27, 2015, 06:08:56 PM
Check out this article:
http://www.kalzumeus.com/2012/01/23/salary-negotiation/
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: Magnon-Statche on August 28, 2015, 07:43:39 AM
Thanks for all the responses everyone.  Through some networking I got in contact with someone who works there.  Sounds like 8-10% is pretty standard for someone with my experience and background at the company.  I gave them a range of 10-15.

Hoping to hear back soon.  The bonus is a nice to have, but the salary will be around a 20k bump for me.  So that would be pretty awesome.
Title: Re: Job opportunity, Salary and Bonus Expectations
Post by: Lis on August 28, 2015, 09:06:44 AM
Thanks for all the responses everyone.  Through some networking I got in contact with someone who works there.  Sounds like 8-10% is pretty standard for someone with my experience and background at the company.  I gave them a range of 10-15.

Hoping to hear back soon.  The bonus is a nice to have, but the salary will be around a 20k bump for me.  So that would be pretty awesome.

Keeping my fingers crossed for you! Best of luck!!