What Would You Do: What's The Real Offer?
From Career Tips, 2019 Volume 8, August 2019
First, here's the case study:
Sam had been an FSA (Fellow of the Society of Actuaries) for three years, working in a variety of areas in a large insurer. However, he felt he had been stagnating a bit in his more recent role, and was ready to make a change. A friend who was an actuarial consultant introduced him to Frank, a senior actuary at an accounting firm, telling him that they were looking for someone like him, and he thought it would be a good fit. Sam agreed that the job sounded like an interesting challenge that would provide him a growth opportunity, and after a series of interviews, he was offered the job.
Sam thought carefully about the offer. Sam felt that his current salary was well below his market value, but the base salary would only be a notch above his current pay, and the bonus Frank told him to expect was about 10 percent. This certainly didn’t seem to make it worth a move to a role that would require extensive overtime during an extended audit season each year, so Sam decided to turn down the offer when he called Frank back on Monday.
On Friday afternoon, Sam received a call from Robert, Frank’s boss and one of the firm’s principals. Robert hadn’t been able to reach Frank (who was traveling), and he wanted to check in on where things stood, since he was very interested in having Sam join the team. Sam shared his concerns with Robert.
Robert explained that Frank was being very conservative, and had quoted him the average bonus a new accountant would receive. However, Robert recognized that actuaries were in a class by themselves, and he was the one who signed off on all actuarial bonuses. He assured Sam that he should expect a bonus at least double that. With the higher bonus, the compensation was in line with what Sam had been seeking.
What would you do?
WHAT REALLY HAPPENED?
Sam decided that with the higher bonus, the move might make financial sense, but felt he needed more certainty about it. He called Frank to tell him what had transpired, and asked if Frank could send him a letter confirming that the first year bonus would be expected to be at the level Robert had mentioned.
Sam told Frank that he recognized it was a bonus and therefore not guaranteed, and understood that Frank might want to include in the letter whatever caveats he needed, such as “assuming high-quality performance.”
Later that day, Frank called Sam to tell him that he didn’t understand why Robert had gotten involved, that the lower bonus stood, and that if Sam were so concerned about compensation, he probably wasn’t the sort of candidate they were looking for.
A few months later, Sam landed his dream job, helping a company build up an actuarial department from scratch. The base salary alone was equivalent to the higher level Robert had offered as base plus bonus, and he was eligible for a substantial bonus on top of that.