Change compensation plan without notice

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Latest post Tue, Feb 3 2009 1:45 AM by JDogCorpKilla. 2 replies.
  • Tue, Dec 30 2008 10:02 PM

    • rsarge
    • Not Ranked
    • Joined on Tue, Dec 30 2008
    • Posts 1

    Question [=?] Change compensation plan without notice

    I'm a Pre Sales Systems Engineer for a small computer hardware vendor based out of MA. My compensation is broken up into two components base salary and quarterly bonus/commission. My question is on the bonus/commission, 75% of my quarterly bonus is driven by MBO's (Management by Objective's) and the remaining 25% is based on sales. My comp plan has very specific dollar amounts tied to specific MBO's/events that I need to accomplish during the quarter. This past quarter my company decided that instead of paying my MBO bonus in cash that they would pay in options. The issue or question that I have is that they didn't inform anyone that they were changing the comp plan until after the quarter was over. So instead of being paid $12k they gave me 150 options for a company that isn't publically traded. Each quarter they present us with a new comp plan and they have each employee sign it, I have my comp plan signed by me and the EVP of sales for the company with explicit dollar amounts for my MBO's. Also the offer letter that I signed for this position, back in April, explicitly detailed that I was to be paid on a 70/30 split with the 30% to be split 75/25. My OTE (On Target Earnings) on the offer letter was based on being paid money not options for a company that isn't publicly traded. I was informed in writing by HR that the company was not going to pay bonuses in cash for the quarter that just closed, but that I achieved all of my MBO's for the quarter and that I would receive 100% of my bonus to be paid in options. I realize times are difficult, but can they just change my comp plan without notice after the period of review has already passed/closed?
  • Wed, Dec 31 2008 1:02 PM In reply to

    re: Change compensation plan without notice

    "can they just change my comp plan without notice after the period of review has already passed/closed?"

    Can they?

    Of course they CAN.

    They already did.

    The question is: What can you do about it?

    Bottom line: you can file a wage claim with the state or sue your employer for the money.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Tue, Feb 3 2009 1:45 AM In reply to

    Idea [I] re: Change compensation plan without notice

    This board is under IL, so Ill use IL law.

    If you state is MA, then it may be different, and it may be different if you have an employment contract rather than an at will relationship.

    In IL, and employer can only legally change a payplan if the employee is first notified. They can not retroactive a pay plan. Check your states department of labor website and statued.

    Sounds to me like moreover the company is straped for cash in these very tough economic times, the severe global recession, and credit crises. (Ever watch bloomberg overnight ?)

    Sounds to me like there pulling one over on you for 1 quarter, a trick to get the work from you for 1 quarter without objection.

    Now the other serious consideration is are the options worth anything ? What is the strike price? What is the companies stock worth ? How liquid is it (Can you sell the options or stock tommorrow and how much are they worth in cash?) If the answer is not really much, then you may want to consider finding another job ?

    If you do decided to find another job, good luck the job market is vary tight, but if you a skilled professional, and you can take your skills to the competition, you might just strike some gold.

    If you do leave, or mention you might might leave, you might try to pressure the company to pay the bonus in cash as previously promised. If they had had you sign you pay plan in a pattern for quarter past, and didn't have you sign one last quarter, that shows inconsistancy and tell them so, you did not agree to work for worthless options, so there fore you bonus structure stands as the last one you signed. (Just be aware that once start disputes about your pay, you may be targeted for termination, this may give you a wrongful termination claim if you file with your state department of labor for wage claim.) Just be aware the State Department of Labor has limited resources and doesn't do that much for you, but the bluff can work, or if you want, at least get you wrongfully terminated so you can collect unemployment. (Job market is tight though, tens of thousdsands of blue chip company jobs being shed every week.)

    Try to deal with your company managers, reasonably and respectfully first, to resolve or negotiate a settlment to the dispute. In that Also, consider if its worth staying at the job. You may want to get that resume flying out there, to at least see what you might be worth somewhere else. If negotiation with the company fails, and you decide its not worth it, then you can hit them with a wage claim, get wrongfully terminated, then sue their asses, while you collect unemployement.

    Consult an attorney for that.
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