A friend of mine has an offer from Citadel. Apparently for anyone whose annual TC (base + bonus) is over $400k there, Citadel only pays out 70% of the annual bonus and the rest is invested in the firm and paid 3.5 years later, assuming the person is still employed at the firm or left on good terms. My friend has a few questions about this: 1) Is this a standard policy that applies to all Citadel employees, or is it only applied in some cases? 2) If the employee is let go from Citadel for performance reasons (not due to IP violations or harassment etc), are they still paid all of their deferred comp 3.5 years after it was invested in the firm on vesting? 3) Are the returns of the employee deferred comp fund identical to Citadel’s client-facing hedge fund(s)? 4) What are the implications of asking for less annual TC in order to have 0% of the annual bonus be deferred? 5) Based on my friend’s prior research on Blind, apparently only Citadel (the hedge fund) has this deferred comp policy, and Citadel Securities doesn’t. Is that correct? EDIT: tagging Google here in hopes of getting views from more current and former Citadel employees
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Were you familiar with this policy before my post?
Yeah
It gets deferred in securities as well. But if you leave/get fired (for a not egregious reason of course) you still get your deferred comp down the road contingent on abiding by the non-compete. It’s basically used an addition tool to enforce that. From what I understand (and I could be wrong certainly) this is relatively unique amongst trading firms - most places don’t let you keep it at all if you leave.
How long is non compete usually? And I assume joining FAANG is fine, then they’ll just release you and give you your money?
Think every firm (the good ones) allow you to keep the deferred comp when you leave
Staying out is always easy than getting out. Applies everywhere.
Above is all correct. Deferred comp is standard in the finance industry above a certain TC. You should just think of deferred comp as RSUs -- it's not really that different. Instead of shares, your money is invested in a basket of citadel funds (some of them the same as the ones investors are in, some not). Unlike RSUs, the money is yours even if you quit or are fired (assuming you abide by the terms of the deferred comp agreement).
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What kind of dumbass policy is that
This is pretty standard in finance companies. It's a way of locking people in. TS has deferred comp too
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