Money often doesn’t feel all that special because we work hard for it. When we receive our paycheck or profits from a smart investment, it feels deserved. But the real thrill comes when money unexpectedly lands in our lap—like winning the lottery or finding cash on the street. That’s what receiving deferred compensation feels like. Even though you earned it through hard work, when it hits your bank account, it’s like a surprise windfall.
Recently, I received a pleasant surprise in the mail from my previous employer. It was a notice about upcoming deferred compensation. It’s hard to believe how time flies. The letter simply informed me that another batch of employer stock was soon heading to my brokerage account.
Nice! I hadn’t thought about receiving deferred compensation in quite a while. I’ve been busy with writing, consulting, and overseeing a never-ending bathroom construction.
In the finance industry, bonuses typically come in cash, stock, or both, depending on your seniority level. As a Director (just above VP) at my old firm, my bonus leaned heavily towards deferred compensation spread over three to seven years! It’s a tactic firms use to make it costly for employees to leave.
If you leave a finance job, you risk losing your deferred compensation—much like unvested stock grants at a startup. However, with some dialogue with your manager, you might be able to retain what’s rightfully yours. This applies to both deferred compensation and other benefits. I encourage everyone to explore their options.
Remember, everything is negotiable. The sooner you realize this, the better!
Deferred Compensation 3 Years Later
Here are screenshots of my brokerage account. I received the proceeds from my deferred compensation and transferred $11,381.75 to my checking account. The gross stock proceeds were over $20,000, but after taxes, I ended up with just over half of that. If you’re tired of how much you pay in taxes each year, you might find this interesting.
429 shares from employee deferred comp hit my brokerage account, resulting in $11,381.75.
I sold all 429 shares and transferred the proceeds to my checking account.
$11,381 isn’t a fortune, but it feels like stumbling upon 113 crisp hundred-dollar bills in an envelope on the street! Every time deferred compensation lands in my brokerage or checking account, it’s like Christmas.
A simple trick to make a smaller amount of money feel more substantial is to list what you could buy with it. I recommend doing this exercise occasionally. It helps you appreciate the value of money, motivating you to spend, save, and invest wisely.
What could you buy with $11,000?
– A soul-searching getaway
– Various Apple products with leftover cash
– 10,000 McDonald’s cheeseburgers and a co-pay for heartburn treatment
– Multiple pairs of iconic shoes
– A luxurious jacuzzi tub and rubber duckies
– A top-notch TV and surround sound system
– A designer bag
– Tickets to major tennis tournaments or basketball games
– Investments in real estate or stocks
Deferred Compensation Isn’t Over Yet
Even after receiving this recent tranche of equity proceeds from deferred compensation three years later, I’m still awaiting the cash proceeds and the remainder from a private investment vehicle with a seven-year vesting schedule. These amounts exceed the recent $11,381 net from the stock sale.
Instead of accepting a severance package, consider negotiating one. You might not succeed, but you’ll have no regrets about trying. If you were planning to quit anyway, there’s nothing to lose!
Switching to a new industry can be daunting. Starting a business from scratch can be soul-crushing initially. Negotiating a severance to embark on something new is responsible. It’s akin to taking your prescription regularly or scrutinizing the ingredients before cooking.
Why not secure a financial cushion to pursue your dreams? Don’t be afraid to ask.
Recommendation For Leaving A Job
If you’re unhappy at work, consider negotiating a severance instead of quitting outright. Negotiating my severance back in 2012 landed me a severance check, subsidized healthcare, deferred compensation, and training opportunities. In case of a layoff, you’re also eligible for unemployment benefits—a significant support during your transition.
In contrast, quitting means you get nothing. Check out for guidance on negotiating a severance. Originally published in 2012, the book has grown to over 200 pages with new insights and case studies based on reader feedback.
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Updated for 2021 and beyond.
