Comp package structure for engineers in HFT companies
Can someone provide insight about compensation structure for enginerring roles in trading firms? I.e. someone who's not tied to company's/desk PNL and not necessarily SDE: system engineers, storage engineers, network engieers or SREs. #citadel #deshaw #twosigma #drw #jumptrading #hrt #virtu #xtx #optiver #imc
Three parts usually. 1. Hiring Bonus. 2. Base Comp. Is usually pretty low (150-200k/year) 3. Yearly Bonus (Where all the money is made). For non P&L tied people this can become a pretty predictable number. I.e. no wi dfalls but you won't get cheated. Where it gets complicated is that Yearly Bonuses "ususually" aren't paid out as lump sums of cash at the end of the year. Instead, funds offer a percentage based investment back into the fund with a multi year repayment. For example, let's say you have the following offer 120k base 50k signing 240k target bonus 20% required revest (1 yeqr cliff, 3 year maturity) 10% optional revest (1 year cliff, 3 year maturity). On day 1 you would get 50k. Each month you would then get 10k. At year end you would get ~200k cash and 40k would go into the fund. At year 2, month 1, you would then make ~12k as the revest of the first partially matured with additional fund profits. Over time your allowable revest amount increases (you always want to put as much money as possible into the fund), and your compounded vests stack as they mature. When you leave you usually get an immediate liquidation of your position Some bad firms abuse this system to keep you longer. Requiring a high percentage Bonus revest in one of their low performing funds (which you don't want to be in vs cash) or don't cash out when you quit. Don't join firms that do either of those.
Thanks for insight. I was talking to few companies and had to turn down offers because of comp structure, but annual bonus was low in both cases. I never seen structure like that offered, but I'm in the middle of few interviews, so want to know in advance.
Do you get any tax benefits for putting optional bonus into fund pool or is it still income even if you dont receive entire bonus?
Really depends on the firm how they pay the bonus. Some will be fully cash, some will do partly deferred, some will invest in the fund the deferred part, some will give fixed interest on the deferred part
Nice username
Almost there
Citadel has a crazy bad deferred comp program for their core eng team
What is it?
Vests over 3 years, you dont cash out when you quit. However, one tranche gets paid if you get fired. I declined an offer because of this