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Looking for advice: Spouse wants to pay bonus out of his own pocket

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
I don't post often here but you are all very friendly and was wondering what kind of advice you could give:

My spouse is in charge, as an executive, of 8 people. The group has a complicated bonus structure and this year's bonus will only be paid out 65%. That is across the board for the business unit, which is bigger than just my spouse's office. The group is very disappointed about that and have voiced that. They are a group of highly trained professionals and not in a low wage environment.

My SO now wants give every employee a personal check of $5000. As a personal gift and thank you for all they have done this year and also for the help they have been. My spouse wants to make clear to them that that does not obligate them in any way shape or form, i.e. not leaving for a better job later on. (Although retention is an issue in the company)

My question is now can my SO do that? Could it lead to legal trouble for our family? Does my spouse need to ask HR or the CFO? What if some don't accept it? What are the tax implications (income vs. gift)?

I don't want to discuss my feelings about it or how it affects our marriage. Only this much, we are not rich and giving away this money would also be a small hardship for us. But I am only interested to know how it could impact my spouse, the job and relationships at work, what are legal obligations and moral implications for my spouse as an manager in charge but also employee in the company.

Thanks so much.
 

icy_jade

Ideal_Rock
Joined
May 1, 2009
Messages
4,213
I would say no. It’s been a difficult year and if the business is not doing well, then bonus cuts are expected and his team should be mature enough to handle that. Emptying his pockets by $40k isn’t going to make a difference. If they will leave due to the poor bonus, then the money isn’t going to help.

Also depending on where he works, there may be policies in place against such personal incentives. In some places, this could mean disciplinary action leading to loss of employment. Not worth the risk imo.

So pls don’t. Bad idea on so many fronts
 

missy

Super_Ideal_Rock
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46,180
It’s a generous and kind thought but I’d worry about what his higher ups will think. Politics and all. I’d be very careful before doing this.
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
I would say no. It’s been a difficult year and if the business is not doing well, then bonus cuts are expected and his team should be mature enough to handle that. Emptying his pockets by $40k isn’t going to make a difference. If they will leave due to the poor bonus, then the money isn’t going to help.

Also depending on where he works, there may be policies in place against such personal incentives. In some places, this could mean disciplinary action leading to loss of employment. Not worth the risk imo.

So pls don’t. Bad idea on so many fronts

Thank you very much for the fast answer. That is exactly my concern.

We did ask a lawyer friend but he said he does not see anything wrong with it and that it is not illegal. Of course giving away money is not illegal in general but I think it could lead to trouble if you are in a dependent/work relationship. I think it was bad legal advise.
And although we are very friendly with the team and have spent time together in person it was always a work relationship.

And about the pay, I think if they see that my spouse can afford to give away that much money maybe they question if my souse got more than the 65% himself, which is not the case. It's things like that that I think could create more harm. Also, what if 4 take it and 4 don't. It would create a "weird" climate at work. And if SO asks to not talk about it, it would create a secretive relationship and that is also something that would impact the office and cause more suspicions.
I have voiced all these concerns but my spouse has waived them all away and is determined to somehow make this work.
 
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MMtwo

Ideal_Rock
Joined
Sep 20, 2009
Messages
2,970
Your husband is obviously a very kind and giving man (you're a lucky woman). However, the adults in the office are adults. In a year like this, a reasonable person would understand. My husband is well paid but due to the economy, some perks were held back/delayed until better times. He was disappointed for a day, then he moved on and understood. However, it was supported by a business down turn and the company explained that they thought the situation temporary.

Personally, if I had a boss do this, I would refuse the money. It would be wrong to take.
 

icy_jade

Ideal_Rock
Joined
May 1, 2009
Messages
4,213
there may be policies in place against such personal incentives. In some places, this could mean disciplinary action leading to loss of employment. Not worth the risk imo.

I really want to emphasize this. There are places where doing this could mean investigations and disciplinary action. If everyone is a well paid professional, then I can well imagine that the company policies will be comprehensive enough to prohibit such actions. Even if well intended, the exchange of money can be twisted into something dirty and damaging.
 
Last edited:

MMtwo

Ideal_Rock
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Messages
2,970
Another thought, can you imagine hearing about this from another department? Mr. X gave out an extra bonus but Mr M's department didn't get one? That would be corporate poison. I could see how this could turn a kind gesture into a termination situation.
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
I guess you all figured out that I it is a husband (I tried to stay neutral but on PS you guys can see right trough this) :)

I agree with all the objections. The company actually had a very good year and was not impacted by the pandemic at the bottom line. But the bonus structure is a complicated calculation depending on the performance of several levels and business units over several years and some of those did not perform as well. That matrix is clearly laid out, although there are perceived injustices. But I guess that is something that the teams need to work out also for the future. Maybe his energy should be focused on that, and I know some of it is.
This is an international company, and they have guidelines for every aspect of corporate behavior. I assume there are gift giving and accepting rules, I just don't know them.

Yes, he is very generous but it sometimes causes issues at home. He actually likes to spend money, also on useless, frivolous stuff. But I try to be very frugal and save for our kids colleges, retirement, updates on the home, vacations etc. We have joint accounts and make all financial decisions together but he makes the bulk of the income, I take care of investments, payments, insurance, everything around the house, cars etc. He does not even know where our check book is. LoL
We have a very good marriage and one reason is is because he never says no to anything I want to do. We trust each other. But we also argue. So part of me feels like I have to support him in this but just really think it is a bad idea.

I went on some message boards and this type of thing happens apparently but all the people that talked about it wished that the well meaning boss had never done it and some actually quit because of it. The people that kept the money probably did not feel the need to write about it online . :)

When I asked our lawyer friend what if some do not want to accept it, he said they then should pick a charity and donate it. But all of these things make it even more complicated. Also in regards to taxes.

Thanks for all the answers. I love reading them. I just can not reveal more personal information as you might find us. My husband will buy you all the jewelry you have ever wanted. All you need to do is hint it and "not" ask for it.....;-)
 

yssie

Super_Ideal_Rock
Premium
Joined
Aug 14, 2009
Messages
22,200
I really want to emphasize this. There are places where doing this could mean investigations and disciplinary action. If everyone is a well paid professional, then I can well imagine that the company policies will be comprehensive enough to prohibit such actions. Even if well intended, the exchange of money can be twisted into something dirty and damaging.

All of this. Your husband is a very kind and thoughtful person but this is a terrible idea.

This needs to be cleared by HR, Corporate, People, whatever his company calls that team. And I sincerely doubt they will!

It’s a very generous thought. But one employee giving his subordinates significant handouts out of pocket, outside the framework of the compensation structure that everyone has already agreed to, sets a complex, potentially dangerous, definitely damaging precedent.

If your husband wants to do something nice - gift cards to a local restaurant, or a group
subscription to local meal service vendor, something like that - might be easier to get cleared ethically and legally, and would be viewed as simply a generous gesture with no strings attached.
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
All of this. Your husband is a very kind and thoughtful person but this is a terrible idea.

This needs to be cleared by HR, Corporate, People, whatever his company calls that team. And I sincerely doubt they will!

It’s a very generous thought. But one employee giving his subordinates significant handouts out of pocket, outside the framework of the compensation structure that everyone has already agreed to, sets a complex, potentially dangerous, definitely damaging precedent.

If your husband wants to do something nice - gift cards to a local restaurant, or a group
subscription to local meal service vendor, something like that - might be easier to get cleared ethically and legally, and would be viewed as simply a generous gesture with no strings attached.

Thank you. Yes, he does individual, private gifts at Christmas for each member of the team. I have never asked him what the upper limit is but we usually don't go over $200 per person. Some years it's material gifts, other years gift cards, or memberships to certain worthwhile causes like a hiking club.
 

yssie

Super_Ideal_Rock
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Aug 14, 2009
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22,200
Thank you. Yes, he does individual, private gifts at Christmas for each member of the team. I have never asked him what the upper limit is but we usually don't go over $200 per person. Some years it's material gifts, other years gift cards, or memberships to certain worthwhile causes like a hiking club.

If the company achieved 100% of revenue quota last year (however they define that), and if employees who achieved 100% of their personal quotas last year (however they define that too) are being compensated only 65% of their anticipated incentive comp, then it certainly DOES sound like there is some systemic unfairness. Your husband is better positioned than any of his employees to demand incentive compensation reform to make payout more directly representative of company and personal accomplishment. Pushing for that would be valued much more highly by his teammates and do much more for retention!!

The reality is that if $5000 represented ~35% of a person’s total bonus then that bonus probably isn’t a significant portion of total takehome to begin with. Especially given the bonus tax rate here in the US, if you’re in the US. If $5000 is a drop in the bucket compared to the missing 35%, then that $5000 isn’t going to soothe any ruffled feathers - except, as you point out, to advertise that you two can apparently afford to blow $40k in handouts (and all the questions THAT will raise).

Really really bad idea. I hope he changes course on this.
 

MrsBlue

Shiny_Rock
Joined
Jan 30, 2013
Messages
396
This is a terrible idea. He may be generous and kind but other people are not. What if someone decides to say they felt compelled to take a certain course of action because of the money? I see tons of ways this could go wrong.

I agree with the post above. Going to bat for the team and advocating for fair compensation is the best course of action.
 

Polabowla

Brilliant_Rock
Joined
Nov 15, 2019
Messages
1,825
There is a website written by an HR person who once discussed a very similar situation & she strongly advised against it.

Imo if a company refuses to fully pay the bonus because of performance issues, they can rightfully be angry that your husband did it behind their backs.
(Like grandma giving a kid who didn't eat supper a candy, after mom said no).
And yes ppl will expect him to give it in the future if they don't get the full bonus again.
It also can cause you & them tax issues.

By the way, if you have joint accounts you should definitely speak up & push back
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
If the company achieved 100% of revenue quota last year (however they define that), and if employees who achieved 100% of their personal quotas last year (however they define that too) are being compensated only 65% of their anticipated incentive comp, then it certainly DOES sound like there is some systemic unfairness. Your husband is better positioned than any of his employees to demand incentive compensation reform to make payout more directly representative of company and personal accomplishment. Pushing for that would be valued much more highly by his teammates and do much more for retention!!

The reality is that if $5000 represented ~35% of a person’s total bonus then that bonus probably isn’t a significant portion of total takehome to begin with. Especially given the bonus tax rate here in the US, if you’re in the US. If $5000 is a drop in the bucket compared to the missing 35%, then that $5000 isn’t going to soothe any ruffled feathers - except, as you point out, to advertise that you two can apparently afford to blow $40k in handouts (and all the questions THAT will raise).

Really really bad idea. I hope he changes course on this.

He once explained the bonus structure to me and it is something like that. There are 4 goals: individual, small group ("the office"), large group (the BU) and corporate. All these have goals assigned but staggered over 3 years. I think this year personal and corporate goals where reached but small and large group goals where not. But small group to a bigger extend than big group. Of course people think it is unfair if they reached their goals at a higher level than the goals they can not impact directly (large group). But this structure is not a surprise and is known and communicated. Maybe only the final calculations where a surprise.
Also, although the bonus cut was equally applied at 65%, some have higher and some have lower potential.
But I agree, $5000 is a lot of money but also not a lot at the same time if it makes any sense.
I think he intended it to be somewhat impactful but also ran into limits of what is possible regarding our own savings situation.

Well, I hope he drops the idea as well.....
 

mrs-b

Ideal_Rock
Premium
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Aug 18, 2013
Messages
8,936
I only have one point to make.

For him to do this means a very significant crossover from 'professional relationship' to 'personal relationship'. This is an absolute no-go in my book.

While everyone always enjoys more money, I can imagine it making some people hugely uncomfortable - especially women. Regardless of what he says, somebody is always going to worry about implications and indebtedness. But emotional / relational issues aside....

It crosses the boundary from professional to personal. As such, it's inappropriate. He shouldn't do it.
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
I only have one point to make.

For him to do this means a very significant crossover from 'professional relationship' to 'personal relationship'. This is an absolute no-go in my book.

While everyone always enjoys more money, I can imagine it making some people hugely uncomfortable - especially women. Regardless of what he says, somebody is always going to worry about implications and indebtedness. But emotional / relational issues aside....

It crosses the boundary from professional to personal. As such, it's inappropriate. He shouldn't do it.

I could not agree more with that! Now if any of you want to talk to him.....:)
 

Bron357

Ideal_Rock
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Jan 22, 2014
Messages
5,217
Agree, No.
Your husband is an employee and his subordinates are employees.
it is not his role or place to hand out “bonuses or gifts” to his subordinates from his own pocket, especially not to compensate for disappointment caused by the Company and the Companies remuneration decisions.
Are there other departments within the Company or just your DH and his staff? I mean, how will other depts and managers react to him handing out $$$$ when others aren’t doing the same for their staff?
His intention is excellent, he is a generous man and that is to be applauded but it is fraught with all sorts of implications. What happens next year if the bonus is low, will be do it again? Will he be setting a precedent?
He would be better off lobbying the directors, CEO of the Company to get the bonus system reworked so it is more equitable and transparent and so that employees understand how and why their bonus is what it is.
Thats his job, to advocate on behalf of his employees for fairer and more equitable financial remuneration rather than trying, from his own pocket, to soothe them.
 

Daisys and Diamonds

Super_Ideal_Rock
Joined
Apr 30, 2019
Messages
11,034
The world is waaaaayyyyyy tooooo complicated these days
your husband sounds a good man
I know this is on a much much smaller scale but i once had a dept manager who pesonally bought us a cake on our birthday (to share within the dept) people in other depts moaned and complained so she had to stop

if HR advice aganist this could he just take these people out to dinner with their spouces as a personal thank you for a year's hard work

Covid safe conditions taken into account of course
 

Ionysis

Brilliant_Rock
Joined
Oct 1, 2015
Messages
738
Agree with all the others. The company I work for specifically prohibits managers doing this. For all the very good reasons set out above. Terrible, terrible idea.
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
Agree, No.
Your husband is an employee and his subordinates are employees.
it is not his role or place to hand out “bonuses or gifts” to his subordinates from his own pocket, especially not to compensate for disappointment caused by the Company and the Companies remuneration decisions.
Are there other departments within the Company or just your DH and his staff? I mean, how will other depts and managers react to him handing out $$$$ when others aren’t doing the same for their staff?
His intention is excellent, he is a generous man and that is to be applauded but it is fraught with all sorts of implications. What happens next year if the bonus is low, will be do it again? Will he be setting a precedent?
He would be better off lobbying the directors, CEO of the Company to get the bonus system reworked so it is more equitable and transparent and so that employees understand how and why their bonus is what it is.
Thats his job, to advocate on behalf of his employees for fairer and more equitable financial remuneration rather than trying, from his own pocket, to soothe them.

This is a huge, bureaucratic corporation. Just to get somebody a promotion is a long and difficult road and can get frustrating for the people involved. He probably spends 20% -30% of his time on personnel matters like performance reviews, promotion paths, classes, counseling. He takes the satisfaction of his team very seriously. The bonus structure is always a hot topic and I know he has plans to address it. I agree that giving personal money is not the solution, however well intended. I hope he comes to his senses....
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
The world is waaaaayyyyyy tooooo complicated these days
your husband sounds a good man
I know this is on a much much smaller scale but i once had a dept manager who pesonally bought us a cake on our birthday (to share within the dept) people in other depts moaned and complained so she had to stop

if HR advice aganist this could he just take these people out to dinner with their spouces as a personal thank you for a year's hard work

Covid safe conditions taken into account of course

Yes, he does all kinds of team building and personal activities like that. He takes people out to lunch (under covid rules), has one and one time, does family and group get togethers. I don't know what else we could suggest to mitigate the situation...
 

Daisys and Diamonds

Super_Ideal_Rock
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Messages
11,034
Yes, he does all kinds of team building and personal activities like that. He takes people out to lunch (under covid rules), has one and one time, does family and group get togethers. I don't know what else we could suggest to mitigate the situation...

I really hope the people who work under him appreciate him
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
Only as as long as they don't have a "better" offer.

Yes, I think they appreciate the general office climate but it only takes one headhunter and job offer and they are outta there...and I can't blame anyone for doing that.

Yes, unfortunately that is how things work in most industries. I don't think people stay because they like the boss when they can make more money elsewhere. The system is not like it was in the old days, where you had your place of work for life or until you retired. Changing jobs is common now and almost expected. Paycheck definitely ranks higher than loyalty. If that is better in the end who knows?
 

yssie

Super_Ideal_Rock
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22,200
Yes, unfortunately that is how things work in most industries. I don't think people stay because they like the boss when they can make more money elsewhere. The system is not like it was in the old days, where you had your place of work for life or until you retired. Changing jobs is common now and almost expected. Paycheck definitely ranks higher than loyalty. If that is better in the end who knows?
It goes both ways unfortunately. Gone are the days of job security and pensions - gone are the days of community expectation that employers will be loyal toward their loyal employees. Some people are lucky to find companies that still uphold those bygone mores anyway.
 

Cerulean

Brilliant_Rock
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Sep 13, 2019
Messages
1,909
I think money is a bad idea for all of the reasons cited above.

My husband works in a similarly large, bureaucratic company. His manager was in a similar place one year - bonus pools were bad due to company-wide performance. In fact, it had happened for a few years in a row.

He basically gave his team "under the table" days off (PTO that is not entered into their system). They get 3 early dismissals for Fridays every summer at the middle manager's discretion, and 5 additional PTO days across the year. The caveat is that the under the table PTO is only permitted if the team communicates and makes sure not to leave colleagues in the lurch. No one is allowed to do it during the 4 busiest months of the year. Their team is also very close, and they all really trust each other and have worked together for 3+ years. This would not work in an environment where the team does not operate this way.

I know a lot of folks are by the book, and I get that. But I have to say, this move did really inspire a lot of loyalty for the manager, but no one was deeply dissatisfied with their job to begin with.
 

Elizabeth35

Brilliant_Rock
Joined
Sep 24, 2011
Messages
631
No employee would expect a manager to do something like this. Some may even suspect it is a set-up to catch them being unethical or violating company policy.
Additionally, what precedent would he be setting? I have found that gratitude turns to entitlement in the time it takes for the check to be cashed. Just my opinion.

It would cause hard feelings between groups, and could also open up your DH to accusations of harassment if someone felt they were being "bought", or that they owed favors in return.

There are other things your DH can do for his group---but giving personal $$ is a bad idea for all the reasons others have mentioned.
 

MRBXXXFVVS1

Brilliant_Rock
Joined
Dec 5, 2019
Messages
1,143
I agree with all of the other replies. Hard no due to legal, HR, perception, and other risks. Also, bonus is never gaurunteed. If I was a member on his team, I would feel very grateful, but it would also feel akward and that I "owed" my manager something even if that was not the intention. And if they are well paid, $5000 is not life changing. I am confident your DH is a wonderful manager and flexibility/time off, genuine interest in career growth/development would be more appropriate.
 

Home73

Rough_Rock
Joined
Jun 16, 2020
Messages
21
Thank you for all the answers.

As an update. The husband came finally to his senses and dropped that idea. Even without me prodding any further. He did manage to negotiate a permanent yearly pay-raise for each team member of around that amount.

One person quit in the meantime.

So my spouse has had a long week or two and I will try to cheer him up and make his home life as nice as possible.

I wish everyone the best as well. Stay healthy!
 
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