When the job market gets tight employers resort to a variety of avenues to attract top candidates. In the Silicon Valley, a fast-growth start-up is able to offer new employees attractive stock options and RSUs as a part of the overall compensation package. However, when such an avenue is not available to employers they offset this by offering their new hires a sign-on bonus and other perquisites to sweeten a deal.

Sometimes, a sign-on bonus is also offered to offset the monies an employee leaves behind when they end their employment prematurely (before vesting of certain benefits). So, when you are making a decision to move to another company it is important to understand the motivation behind someone offering a large sign-on bonus and its implications to your welfare and to your career.

Recently, one of my clients, a senior executive, was offered a good salary package that was competitive with the market price point for that level and the job family. After we negotiated the package, including the sign-on bonus the hiring manager came back and substantially increased the amount of the sign-on bonus (more than doubled the original agreed-to amount, exceeding a six-figure sum). The sign-on bonus was to be given in the first 90 days and was contingent on my client staying at the company for the first year.

Without giving this much thought my client was quite flattered by this spontaneous gesture of largesse and accepted the offer. She received the entire sign-on bonus as promised within the stated time, as the honeymoon period with her boss and company was beginning to ebb. During this period my client uncovered many underhanded things that were not apparent during the interviews. The hiring manager, a C-level himself, was always in a hurry throughout the interview process for a studied discussion on any topic other than a hectic interview punctuated by phone calls and interruptions. My client gleaned the information in fragments from the various interviewers, each of whom did not have the full picture of the entire situation for which my client was going to be hired to deal with and lead.

So, with some probing and going by the reputation of the company my client decided that this was a good opportunity for her, where she could contribute meaningfully to the business initiative the company was shepherding and she concluded that this would also make her résumé shine, as she was confident that she would be able deliver what was needed.

As my client’s tenure slipped into her fourth month, with the large sign-on bonus check now in her bank account, things started going south on many fronts. The boss reorganized the entire team and changed the original mission of my client’s team. He also took away some key players from her team and put them in another organization, where she did not have the needed access to them to complete her mission as she had originally planned. Her boss also started openly criticizing her in meetings with vendors and started interfering with her role and team. Very quickly the entire situation became quite unbearable and started getting worse each day. Despite spending increasingly more time away from her family to keep with the constant “surprises” she kept her cool, but was getting increasingly frustrated as her peers and even her own team was finding it difficult to move with purpose. As things were not progressing per the original plan (how could they?) all the open requisitions for my client’s team were frozen. Now my client was whipsawed from both ends: Lack of resources and constant demands from the boss to deal with the revised plan and stay on track!

Despite many temptations to quit after just five months my client was increasingly reluctant because of the sign-on bonus constraint. It is difficult to just forget about such a large sum of money and move on to get away from such a tyrannical, oppressive, and unbearable situation. So, what are some of the lessons from this experience? Here is my list:
1. Before you decide to accept a new job make sure that you are fully satisfied with the discussion with your hiring manager and that they are able to answer all your concerns and questions. Distrust them and verify with others as you do your interview rounds with their peers and subordinates. A harried boss, who has no time for a detailed interview is a red flag.
2. If you are offered an unusually high salary package check and see how it is constructed. If there is a large component of the package that forces your stay, “at will” employment is only a lip service.
3. Check with your employment lawyer to see what legal right you have to keep the sign-on bonus despite what it says in your Agreement if you leave prematurely. Some states have ruled that a sign-on bonus is an advance on your regular pay and cannot be asked to be returned if you leave before the stipulated date.
4. Keep the sign-on bonus intact in your bank account without spending any of it for the duration of the time when it can still need to be surrendered if you were to quit before the stipulated date.
5. Look for the early signs of surprises and discord (with your boss) and have an honest discussion with them. Do not dismiss early warning signs of trouble and be influenced by the fate of the big sign-on bonus you just got. See # 2 and #3 above.
Nothing is worth the wrath of a tyrannical and oppressive boss if it affects your health, family life, and your career. Make the right decision when it comes to your own future!

Good luck!