Bonus Disputes within the Financial Services Industry

Individuals within the financial services industry, like employees in other fields, are entitled to be paid what is promised to them in their offer letters, contracts, compensation plans, and other agreements. Outten & Golden attorneys have successfully litigated, arbitrated, negotiated, and mediated these types of compensation disputes. Our attorneys will seek to negotiate incentive compensation claims when possible, but will also arbitrate claims on behalf of registered persons and other employees in FINRA, AAA, and other forums when necessary.

In many broker-dealer firms and other businesses, employees receive bonuses based on their performance, the performance of their departments or divisions, and/or the overall performance of the company. While some employees’ bonuses are a small fraction of their total compensation, in the financial services industry, bonuses often represent the lion’s share of total compensation for many employees. Outten & Golden has worked to help many types of executives and financial professionals recover bonus compensation due to them, including:

• Investment bankers;
• Traders, including individuals who engage in proprietary (“prop”) trading or trading on behalf of clients, such as stock traders, fixed income/bond traders, foreign exchange/currency traders, commodities traders, and derivatives traders;
• Institutional and retail salespeople, brokers, or financial advisors (FAs);
• Equity and fixed income research analysts;
• Hedge fund employees;
• Private equity firm employees;
• Back office and operations employees, and
• Compliance officers and legal department employees, including attorneys.

Guaranteed Bonus Disputes

In the financial services industry (and many others) there are two types of bonus arrangements: discretionary and guaranteed. Companies often use guaranteed bonuses as an incentive in hiring. At other times, financial firms use guaranteed bonuses for retention agreements. An employee with a guaranteed bonus has a contractual right to that bonus, even if the employee does not have an employment contract term and is instead employed "at-will". Attorneys at our firm negotiate offer letters and employment agreements that contain guaranteed bonus language and draft language designed to ensure that our client’s rights to guaranteed bonuses are protected in the event of termination of employment.

Discretionary Bonus Disputes

Discretionary bonuses, in contrast, do not specify a particular number by contract, but may provide rights based on formulas or parameters specifying how discretion is to be applied, for example, calling for bonuses based on individual, group, and firm performance. We bring bonus claims on behalf of financial services employees in arbitration for unpaid bonuses based on the employers’ express agreements and implied contracts with their employees, considering, among other factors, the pattern and practice of paying bonuses.

Incentive compensation can take many forms, including deferred compensation, cash compensation, short-term incentive compensation, and benefits under long-term incentive plans (LTIP benefits). Claims for compensation may succeed whether or not an employee may successfully argue that she or he is due lost wages or other compensation based on wrongful termination or discrimination claims.

Contact Employment Attorneys Regarding Compensation Disputes

Outten & Golden attorneys regularly assist clients in the financial service industry with all types of bonus compensation or incentive compensation claims. If you need representation for compensation disputes regarding bonuses, please click “Contact Us” or by calling us in the New York, San Francisco or Washington, DC office (see bottom of page for phone numbers) to begin the Outten & Golden intake process.