TRACEY’S PRACTICAL EMPLOYMENT TIP
OF THE MONTH*

FEBRUARY 2008 : TWO TIPS FOR ANALYSTS AND TRADERS

Bonuses for analysts and traders have been hit hard this year. On Wall Street people are seeing 60 to 70% haircuts in their bonus compensation this year even if they were personally successful. The result of the reduced bonus payouts will result in two primary reactions: (1) an increase in efforts to find a new position that guarantees next year’s bonus; and (2) an increase in arbitration lawsuits seeking an improved bonus payout. If you are thinking about either one of these options please keep the following two points in mind.

With regard to movement, in order to establish their value to any future employer analysts and traders usually share their “track record” with a prospective employer in order to establish their value. However, such information is confidential and proprietary to your current or former employer. Accordingly, if you want to use your “track record” (or reports) as part of your job search the information either has to be publicly available or you need to be able to compile the information without using your current employers information and documents. This is a very fine line and should be treaded with extreme care. While I am in no way advocating or advising that sharing your “track record” is appropriate, I also recognize that it is going to happen. Assuming an employee is willing to take the risk then you need to either (a) get an agreement from your employer before you start that you may disclose your “track record” to future employers; or (b) leave no credible trace by sharing your track record only in a face to face meeting and leaving no copies with your prospective employer. Above all, do not use email to send your “track record” to yourself.

With regard to lawsuits, in establishing their right to a bigger bonus most lawyers and clients focus on the success of the recommendations or trades actually made. In many cases this can be short-sighted. It is often that an analyst or trader will tell me how well they did but also how well they would have done had other recommendations they made been followed. As such, I recommend that analysts and traders put all their recommendations in writing and keep track of the rejected ones to show how much the company would have made had they followed their advice

Next Month’s Tip: WHAT TO DO IF YOU GET FIRED

Monthly Tip Archive

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* Disclaimer: The contents of this page are for informational purposes only and nothing herein is intended to constitute legal advice nor should anything contained herein be taken or relied on as such. Each individual executive and employee has a unique set of facts and circumstances that the general discussion set forth above may be wholly inapplicable to. Only through consultation with a lawyer from our firm in which all of the facts and circumstances of an individual’s unique situation are explored and considered can a true legal assessment of your rights and remedies be ascertained. Any use of this information is taken solely at your own risk.