Are bonus and equity pro-rated at lay off?

[bogleblessed]

Just want to know if I am entitled for pro-rated equity (membership interest) and bonus if I get laid off in middle of the year. Company has been paying 20% bonus every year and it was part of my offer as well. Membership interest vest annually.

[smitcat]

Where I worked you needed to be fully employed on the date the bonus was issued otherwise you were not paid a bonus. It was clearly written in the employee handbook.

[krannerd]

It depends on your company policy. HR should have a summary policy description which answers those questions.

Some also have additional benefits if you're laid off as part of an acquisition.

[Pajamas]

Just want to know if I am entitled for pro-rated equity (membership interest) and bonus if I get laid off in middle of the year. Company has been paying 20% bonus every year and it was part of my offer as well. Membership interest vest annually.

Usually not but you should go by company policy and your contract if you have one. Sometimes there are special benefits for people being laid off.

If you think you might get laid off you might want to accelerate your contributions to retirement plans and also spend down any flexible savings accounts.

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[PVW]

Just want to know if I am entitled for pro-rated equity (membership interest) and bonus if I get laid off in middle of the year. Company has been paying 20% bonus every year and it was part of my offer as well. Membership interest vest annually.

Not at my company. You need to be employed on the date the bonus is paid or your equity grants vest.

If you are concerned about getting laid off, you should think about any severance benefits you want to ask for and remind them what they are getting for their severance payments.

[lazydavid]

As others have said, check your specific policies, but most places I've seen have it based on the separation date. This is the date on which you fall off the books and cease being an "employee". Depending on the severance arrangement, this could be weeks or months after your final day worked. I've seen RIFs targeted so the separation date occurred a week or two before the bonus and RSU vesting dates, and also seen people finagle extensions to their separation date by applying for internal roles, resulting in receiving said bonuses and equity awards that they otherwise would not have.

[Tal-]

Bonuses will rarely be paid, or pro-rated at lay off. As other mentioned, it will depend on the plan - but that's extremely rare.

I can't speak to equity.

[dcabler]

In my experience, it depends on the company what they do at the time of the particular layoff. The handbook tends to contain the minimum that they'll do. However, in some cases, they can be generous with such things. In other cases, you get your accrued vacation time and maybe a couple of week's severance (or not). I've worked at companies where it was different each time they had a layoff....

[Artful Dodger]

I would note for many companies, there is a difference between lay off and separation from service / termination. The underlying assumption in a layoff is you are still technically an employee, and the employer has some discretion at least on continuation of benefits during this time including whether or not they still contribute a portion to the health and welfare benefits. As others have said, this info should be available from the employer or HR, and they should address whether you are eligible for any accrued bonus. In case of termination, the common answer is no, unless they have specifically stipulated the bonus, or portion, will still be paid.

[dcabler]

I would note for many companies, there is a difference between lay off and separation from service / termination. The underlying assumption in a layoff is you are still technically an employee, and the employer has some discretion at least on continuation of benefits during this time including whether or not they still contribute a portion to the health and welfare benefits. As others have said, this info should be available from the employer or HR, and they should address whether you are eligible for any accrued bonus. In case of termination, the common answer is no, unless they have specifically stipulated the bonus, or portion, will still be paid.

This. In my field they were always "reductions in force", never a layoff.. yet the terms are commonly used interchangeably by most people affected. It should also be noted that if the reduction is handled under the WARN act, then some special rules apply regarding the notification period, among other things. I've been in a couple of those where the notification was 90 days, we were still employees with all the benefits, except we had to turn in our badges and we couldn't enter the building....

[Earl Lemongrab]

At Megacorp, as long as you weren't terminated for cause you were eligible for pro-rated profit-sharing bonus. Whether that applies at your company is a different question.

[bogleblessed]

Thank you very much for your feedback, appreciate it.

Looks like I will be really out of luck if I get laid off.

Thanks.

[Jack FFR1846]

At a recent job at Megacorp, it was clearly laid out that if the employee was not working full time on the day that any bonus was paid, he would not be entitled to the bonus. This included disability (short or long), leave of absence or any separation from the company for any reason. As Megacorp moved US groups to 3rd world countries and dissolved the US based groups, they would hurry the process to avoid paying any bonuses or profit sharing.

[jharkin]

Thank you very much for your feedback, appreciate it.

Looks like I will be really out of luck if I get laid off.

Thanks.

Well think of it this way... you know its coming so you can at least start to prepare your resume, linkedIn profile and start sending out job feelers. For many people this event comes out of the blue with no warning.

[bogleblessed]

Thank you very much for your feedback, appreciate it.

Looks like I will be really out of luck if I get laid off.

Thanks.

Well think of it this way... you know its coming so you can at least start to prepare your resume, linkedIn profile and start sending out job feelers. For many people this event comes out of the blue with no warning.

True, will use this time to do exactly what you stated.

[remomnyc]

I have been at a few firms where the lay-offs are timed before bonuses were to be paid to avoid paying the bonus.

[bertilak]

When I retired, my bonus for the year I retired was pro-rated.