I want to quit, now pay me

Dear TP,

Those are slightly unfortunate initials, but I digress.

You mentioned knowing some ex-colleagues who managed to negotiate payouts when they left. That surprises me because, in my 25 years in investment banking, including in senior roles, I haven’t seen it happen.

If you qualify for career retirement, you can resign and keep your unvested stock, as long as you don’t join a competitor before it all vests. Most banks apply a “Rule of 60“ formula, meaning your years of service plus age must equal 60.

If you don’t meet this Rule of 60 and you resign, you lose your unvested stock and get no payout beyond your contractual notice, which is usually one to three months. The bank may require you to work through your notice period, though sometimes it’ll just ask you not to show up. It depends on the situation.

Your question reflects two common views in investment banking: the belief that someone else has negotiated a great deal, and a sense of entitlement to an extra-contractual payout when you quit. Both are usually wrong. Here’s why.

Big organisations such as banks prioritise uniformity of treatment. They establish policies and are loath to make exceptions, even if there may be some extenuating reasons, because exceptions have a way of eroding the general policy. And it’s difficult to make exceptions in secret: people talk and news leaks. Dispiritingly, quite a few bankers spend much of their time obsessing about the compensation of others.

A key HR responsibility is ensuring consistent policy application. An ad hoc approach increases costs and legal risks. HR’s job is to prevent special pleading and maintain fairness, which often makes them unpopular. But this apparent inflexibility is a necessary feature, not a bug, of large corporations.

If you know people who got a special payout, you should speak to them. They were likely embellishing the terms of their departure, and they were treated no different than other leavers in similar circumstances. There’s no reason for a bank to make an ex gratia payment.

Your best realistic outcome is to be made redundant. In this case you’d receive a standard package, typically your notice period and two to three weeks’ pay for every year of service. So, if you’ve been at the bank for six years, then you might get up to 30 weeks of salary: 12 weeks’ notice plus 18 weeks (three weeks per year of service).

Now, let’s be clear: your mileage may vary! Every bank has different policies, and they will also vary by seniority and geography. If you’re fortunate to have a French or Italian employment contract, it’s a whole different ball game. There are two key things to remember. First, you’re not going to negotiate anything better. Second, this is a pretty good severance package — much more generous than you’d get in most other industries.

My advice is for you to speak to your manager to ask if you can be included on the next “RIF List.” Even in good years, most banks carry out a ‘reduction in force’ once or twice a year to manage headcount. Sometimes it’s ad hoc, sometimes it is part of a cycle. The timing and size of any RIF is outside your and your manager’s control, and you have no leverage to affect it.

Tell your manager you’ll continue to work hard and put in your best effort — you’ll “run through the tape,” as they say in athletics. Your manager isn’t obligated to make you redundant, but she might prefer to let go of an employee who wants to leave. It may be several months before the next RIF, and so you’ll need patience.

In any case — and this is a general rule often overlooked by younger bankers — good faith begets good faith. You want to depart on good terms and as the saying goes, honesty is the best policy. Believe me when I tell you that your manager and your partners in HR have seen every trick and gambit.

So just tell your manager you’d like to find an ultra-amicable, non-disruptive way of leaving the firm, and ask her to put you on ‘The List’. Work until the end and leave on a high note. There’s no magic money tree that will offer you extra dosh.