eFinancialCareers

What if you're not satisfied when you get your bonus? Could you negotiate for more? Success is rare, and it could be a dangerous path to pursue.

“In 20 years at Goldman, I never once saw anyone renegotiate their bonus after it had been announced, ever,” says one ex-head of department at the bank, which is paying US$16bn in bonuses this year. “Bonuses are decided in October and it’s not done on the back of an envelope – it’s a very long and thorough process.”

Renegotiating a bonus at this stage in the game is hampered by the audit cycle. “Bonuses are announced around December 15th and the end of the financial year is November 29th,” says the head of department. “The accounts are now closed.”

It doesn't look too promising for anyone at Goldman who's eyeing the bank’s increased profits. Although average compensation at the US bank is set to be 40 per cent higher than last year, at a massive US$620,000 (AU$787,988) per employee (secretaries included), the ratio of compensation to revenues for 2006 is at an all time low. If last year’s ratio still held, each employee would receive an additional US$40,000.

Sorry, we made a mistake

Never say never, however. The head of HR at one bulge bracket bank says the firm will occasionally bump up bonuses after numbers have been announced. But this has more to do with remedying errors than appeasing disgruntled employees.

“We may have pro-rated the bonus based on the wrong hire date,” says the head of HR at one bulge bracket bank. “Or a manager might realise they left a major revenue element out of bonus calculations. In those situations we can give an advance on next year’s bonus, but it’s really very rare. It’s not like GCSEs where you can ask for a remark.”

Dangerous strategy

Headhunters are more positive about the prospect of renegotiating a bonus. “If you’re a top performer, the best thing to do is to say you’ve got another offer on the table,” says Zaheer Ibrahim at City of London search firm Kennedy Associates.

But this is a dangerous game – a bank that calls your bluff and asks you to hand in your notice before bonuses are paid out may be able to avoid paying anything at all.