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Comment by infecto | Hacker News Reader

All bonus performance comp. The majority/all individuals who join a fund know how comp works in that industry.

So "we'll pay more than that, we promise, we just can't promise in a way thats legally binding" and "you aren't allowed to look for a better deal if you dont like what we give you"

Sounds ripe for abuse.

It would seem that way, but I’ve known many people who have had 7- and 8-figure year-end bonuses. The key is that it’s not a one-time thing, it’s a repeated game with many players who share information. If a firm gets a reputation for underpaying its star performers, it won’t ever again get good talent, and it will die.

They tell you the formula. For a group like this it’s usually just a percentage of your profits.

I've worked for 4 different quant hedge funds and interviewed with about a dozen others to reach final stages and comp negotiations.

I can claim with full certainty that comp is entirely discretionary and is not beholden to any "percentages". They pay you min(market worth, amount to make you stay) - and those figures are reviewed every year.

Percentages only apply to discretionary traders who are allocated a book to trade. They get to keep a certain percentage. For everyone else, especially techies and researchers, it's discretionary.

Yes, if you have no pnl attribution the concept of a take doesnt even make sense. I've never heard of a fund with attribution that does not pay the analysts some percent of their profits.

It’s crazy that it is discretionary but still have extremely oppressive non competes.

Is the formula legally binding? Can they change it retrospectively and pay out a lower bonus than it would require?

No but these places are 100% dependent on attracting and retaining talent, as alpha decays quickly in unmaintained strategies.

> Is the formula legally binding?

Sort of. Traders have successfully sued when screwed on a formulaic bonus. If it's discretionary, and historically didn't follow a formula, an employee has much less to stand on.

Normally you end up with a known percent of the firm's profits. The profits can't be known in advance, but everything else is.

It's still below industry average for base comp.

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