My Regret Of Not Taking The Money Due To Company Loyalty

For those who follow golf, there was a blockbuster announcement that the PGA Tour would merge with the LIV Golf League. Nobody expected the PGA Tour to merge with LIV because the PGA Tour had been adamant in its disdain for the Saudi Arabia-backed league.

The LIV Golf League offered obscene amounts of money to PGA Tour players to defect. And those PGA Tour players who remained loyal to the PGA Tour viewed these players as money-grubbing traitors who didn't appreciate what the PGA Tour had done for their careers. The players who stayed also pointed out human rights violations by the Saudi Arabian government.

In other words, the PGA Tour players who stayed were loyalists. However, some of the LIV's loudest critics were also some of the already winningest and wealthiest PGA Tour golf professionals in history.

When you're a centi-millionaire like Rory McIlroy or a billionaire like Tiger Woods, it's easier to be a loyalist and denounce the money on moral grounds.

How Much Did LIV Golf Tour Offer Players To Join?

Before you judge the golfers for leaving the PGA tour, here is the reported guaranteed compensation the LIV Golf Tour offered to certain players if they promised to play in a certain minimum number of events. They did not have to win any tournaments to make this money.

Phil Mickelson: $200 million

A report by Forbes suggests he likely received half of that up front. Forbes says that, with earnings of $138 million, Mickelson was the highest paid sportsperson of 2022. Lefty has now (likely) career earnings of over $1 billion.

Dustin Johnson: $125 million

It was reported by The Telegraph that Dustin Johnson’s sign-on fee was somewhere in the region of $125 million. It is rumored that DJ committed to a four-year deal with LIV Golf.

Brooks Koepka: $100 million

Brooks Koepka was a four-time Major winner and one of the most high-profile golfers when he signed with LIV Golf in 2022. But he was struggling to find his form when he signed. Watch the Netflix show, Full Swing.

Sergio Garcia: $40 million

Forbes suggests that Sergio Garcia was the seventh best paid golfer of 2022, with on-course earnings of $35 million. A good percentage of that would likely have come from a signing-on fee from LIV Golf.

Ian Poulter: $20 – $30 million

Ian Poulter is a 49-year-old golfer who has never won a major. But he is a character known for his flamboyant pants. Back in February 2022, The Telegraph reported that Poulter had been offered between $20-$30 million to join the LIV Series.

Bryson Dechambeau: $100 million

He has won eight times on the PGA Tour including one major championship, the 2020 U.S. Open. As an amateur, DeChambeau became the fifth player in history to win both the NCAA Division I championship and the U.S. Amateur in the same year. He is known for his machine-like swing and engineering-like analysis.

A Massive Amount Of Money To Say “No” To

With this type of money being offered to PGA golf players, I can see why many left. If you've also already won a lot of major championships or are fading in your career, why not cash in on a golden opportunity?

With the PGA Tour and LIV Golf League merging, those golfers who went to LIV appear to be right back to where they started, but tens of millions of dollars richer!

Can you imagine how you'd feel if you were one of the PGA players who was offered a huge guarantee and didn't take it? You'd probably be pissed!

Could Have Taken The Money In My Finance Career

What's interesting to me about the PGA tour LIV Golf fiasco is that I had experienced a similar dilemma, but on a much smaller scale.

Before I negotiated a severance in 2012, I could have taken the money and defected to a competitor in 2010. I was being courted by an investment bank from China that wanted to build out its presence in America.

The company was called China International Capital Corporation (CICC) and it was headed by Levin Zhu Yunlai, the eldest son of China's former Premier from 1998 to 2003, Zhu Rongji.

CICC flew me out to New York City and I had a six-hour interview with Zhu Yunlai. It was more a long discussion about life, business expansion, and the future. The office was drab and in a dark place in Manhattan, a stark contrast to my San Francisco Bay view on a high floor.

After I met several other people on the desk I flew back to San Francisco to discuss my experience with my wife. It sounded like a promising opportunity, but I would have to relocate to New York City.

CICC ultimately offered me a two-year guaranteed pay package equal to $800,000 a year. Given my base salary at the time was $250,000 and we were still feeling the effects of the global financial crisis, I was extremely tempted to take the offer after nine years of loyalty at Credit Suisse.

Why I Turned Down The Money

I had already lived in New York City for two years while working for Goldman Sachs from 1999 – 2001. The thought of moving back wasn't appealing because of NYC's extreme grind culture in banking.

Unlike LIV golfers, who were paid to just show up, I'd have to go back to working ~70 hours a week at a new firm with no history in America. The pressure to perform would be immense! In addition, I'd have to build new relationships with my colleagues and cover more clients on both coasts. That meant flying even more frequently.

Finally, I had grown roots in San Francisco since moving here in 2001. I bought a single-family home in 2005 that I didn't want to sell in 2010 given the still-weak market. Leaving San Francisco also meant leaving many of my friends behind.

But earning $1.6 million guaranteed over two years was a heck of a lot of money for a 32-year old. If I took the offer, I could then retire early and be free forever!

The Compromise To Stay At My Existing Firm

Before turning down the guaranteed compensation package, I asked the head of my department head, Jim, for advice. Jim encouraged me to stay by putting doubt in my mind about what might happen if I had left.

He told me that two-year guaranteed compensation packages were not a sure thing. He made me believe CICC might shirk on paying me the second year given he's seen it happen before at other organizations. After all, he was a senior Managing Director who was in charge of compensation for his department.

In addition, there was a risk that if I jumped to a fledgling competitor and failed, I might have a hard time returning to an established firm like Credit Suisse, Goldman, Morgan Stanley, and the likes.

The Guaranteed Pay To Stay

I decided to take his advice but countered with a guaranteed bonus to stay. I didn't push him to match what CICC offered. Instead, I just let him come up with the figure of a guaranteed $500,000 bonus to stay. I knew about the risks of creating a “hostage situation.”

Ultimately, I accepted his offer, which equated to a one-year total compensation of $750,000 or $50,000 below CICC's first-year guarantee.

Accepting his offer was also risky because my firm supposedly had a policy of never guaranteeing compensation. This would create compensation problems if other employees found out. Hence, my acceptance was also a leap of faith that my manager would come through.

For the 2010 bonus year, he delivered on his promise. I ended up investing 100% of the after-tax proceeds in the S&P 500, tech stocks, a CD and structured notes that provided downside protection. Eventually, the expired CD was reinvested in a fixer-upper in 2014.

Got Punished The Next Year

Unfortunately, I got bageled in 2011. Bageled refers to getting a $0 bonus. I was disappointed in my manager given I performed well in 2011 based on my client rankings and revenue generation.

But I wasn't entirely surprised because I started to check out in 2011. This can happen once you've been paid a lot of money. I decided to take all six weeks of my allotted vacation in 2011. In retrospect, I could see how my boss wasn't too happy about this.

Two years prior, I had also hired a junior to work with me. Based on the amount of training I gave him, I felt confident he would have no problem taking over the business while I was on vacation.

Most people in banking don't take six weeks off a year because most people are afraid a colleague will eat their lunch while they are gone. The rationale is, if the business does well without me, why would the firm need to pay me a big bonus or need me at all?

One of the MDs in San Francisco, a friend I admired, had recently taken three months of paid maternity leave after previously taking six months of paid maternity leave for her two other children. I rationalized, why couldn't I take six weeks off too?

Alas, nobody is safe in banking when you start taking more than three weeks off a year. How sad.

The Severance Package Negotiation

Once the big boss told me I wasn't going to get a bonus for the 2011 year in January 2012, my mind immediately thought about the two-year CICC guaranteed compensation package. Ugh, I should have taken their offer in 2010! Loyalty didn't pay!

After sulking for about a week, I concluded that my future at Credit Suisse was no longer bright. I wasn't willing to work another year with the risk of getting no bonus again. Therefore, I decided to negotiate a severance package.

Although it felt scary to be asked to be laid off with a severance package, I also figured there was little-to-no downside. I hadn't done anything wrong to get fired. And you can't get worse than a $0 bonus.

A month later, my boss agreed to my request and decided to lay me off. I told him I'd be willing to stay for up to two months to provide a seamless transition. In turn, I would receive a severance check worth three weeks for every year I worked, plus all my deferred cash, stock, and private investment compensation.

The Sad Ending

In the end, I left unceremoniously when they discovered I accidentally emailed home a client file. The file was five years old and contained little value. But my firm was paranoid that I'd go to a competitor, even though I told them I wouldn't.

My firm was in an awkward situation because in my office at least, they had never agreed to lay someone off and let them stay for more than a day. Usually, the employee gets gets locked out of their computer and building immediately.

The final value of the severance package made up for some of the guaranteed pay I might have earned from CICC during the second year. But I could have made so much more.

Related post: Bank Loyalty Has Long-Term Benefits And Short-Term Costs

Taking The Money May Have Changed My Life

Because I was able to negotiate a severance package, I don't have deep regrets not taking the two-year guaranteed pay package from CICC. Moving back to NYC and working all those hours wouldn't have been healthy. I also would have unlikely been able to get a meaningful severance if I decided to leave CICC.

But I do wonder what might have been had I taken the money. At the very least, I would have been $300,000 – $600,000 richer, depending on investment returns. The money could have easily been used to pay for two children's college tuition.

Maybe I could have done a great job at CICC and risen in the ranks to become Managing Director. Maybe I would have been asked to lead up a larger department based out of the Beijing headquarters. If so, millions of dollars a year in compensation would have been a sure thing!

A part of my decision not to accept CICC's offer was also due to potential human rights violations at the time. It's an interesting moral dilemma because every country has human rights violations, including the U.S. I asked my Taiwanese mother for advice about whether to join and she did not approve.

A Different World Perhaps

Despite the potential for more money and power, my heart was no longer in the business after twelve years. Instead, I found new joy in writing on Financial Samurai and building a community online. I made little money online, but I was having a blast!

To make myself feel better, I like to tell myself that the second year guaranteed compensation at CICC might not have occurred based on my manager's advice. I could have done a terrible job at CICC the first year since I was already burning out.

But I also regret not going back to New York City for two years and living it up one last time. During my first two years at Goldman, I only had a $40,000 and $55,000 base salary.

It would have been fun to live in New York City with a top one percent income. Maybe I would have bought a nice condo with a Central Park view on the Upper West Side. Being able to go to dinners and shows without worrying too much about the cost would have also been nice.

Alas, maybe in a different life.

Thankfully, everything worked out in the end, hence why my regret doesn't run deep. I was able to receive a severance package that paid for five years of normal living expenses at age 34. And then I wrote How To Engineer Your Layoff to teach other people how to negotiate a severance as well.

There's Value In Being Loyal Too

Most people should take the money if the opportunity arises. However, there is value in being loyal as well.

  1. Easier to get another job. If you're job hopping every one-to-three years, eventually, an employer might hesitate to hire you. The last thing an employer wants is to spend six months hiring and training you only to see you leave. If you get laid off or find a better opportunity, your loyalty may help you.
  2. Increased equity and profit sharing. The longer you're at your firm, oftentimes, the greater your equity grants and profit sharing as a percentage of income. I was getting about $25,000 a year in profit sharing injected into my 401(k) before I left.
  3. Greater respect within the organization. The longer you're at a firm, the more respect you'll usually have. Even if you are junior to someone, if you've been there longer, you automatically command more goodwill.
  4. The devil you know may be more comforting. Like upgrading homes, there's always an unknown risk once you move. Maybe your new boss isn't as nice as you thought he'd be. Maybe the firm isn't performing as well as the recruiter made you think.
  5. Greater respect from your clients. Clients tend to like products and services with a longer history. The more your clients like you, the easier your job.

The Best Career Move For Maximum Pay

Before you leave your firm for more pay and a promotion, you might as well ask your existing firm to match your offer. They might say yes or they might say no. At least by asking, you'll never wonder what if. It’s the same logic with asking for a severance package if you planned to quit anyway.

If you stay without a pay increase, then you might engender goodwill. This goodwill might result in more compensation the following year. But this is the worst career move since you aren't being properly compensated based on market rates.

If you do negotiate a guaranteed pay increase for staying, just beware your firm could normalize you the year after. Therefore, perhaps the best career move is to be disloyal and leave right after you've gotten paid your increased compensation! This way, there is no risk of you getting paid down the following year.

My problem was that I wanted to be loyal to my firm which had fulfilled its promise of paying me more for staying. Instead, what I should have been doing was interviewing aggressively as soon as my bonus hit my checking account.

Know your ambition! Once you do, the decision to take the money or stay loyal will become much easier.

Reader Questions And Suggestion

Do you think loyalty pays? Can you share an example of when you took the money and regretted your decision? I have seen examples of employees going back to their old firms. How has disloyalty accelerated your path to financial freedom?

Pick up a copy of How To Engineer Your Layoff if you want to learn how to negotiate a severance and be free with money in your pocket. Negotiating a severance was my #1 catalyst to leave a well-paying job in 2012 and never return. Use the code “saveten” to save $10 at checkout.

How To Engineer Your Layoff Ebook 6th edition

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25 thoughts on “My Regret Of Not Taking The Money Due To Company Loyalty”

  1. I used to be a firefighter.

    There was a deputy chief at the department I worked at who was past retirement age. By that I mean he could have taken a pension and received more money due to COLA than he would have received in annual paid increases. We discussed the math amongst ourselves at the kitchen table after he walked by and realized he was losing money each year by staying on.

    But who would he be when he had retired? As a DC he was the shift boss and had tremendous authority over a dozen men at three stations. If he retired he would be just another old guy in a nice pickup driving around town and eating early bird special breakfasts at the local restaurant?

    I think especially as you get older the money isn’t always a factor in these types of decisions

    1. Great story! And so true. He was somebody, had authority, and a great community. Hard to pass that up!

      But also must be frustrating for the #2 who wants to ascend too.

  2. Dave Rothman

    I was an auto mechanic for many years when the dealership I worked at decided to go to the “4day/10hours a day work week.
    I worked in Manhattan at the time and my daily commute was about 3.5 to 4 hours round trip(which would make for a VERY long day), so I decided to work for a competitor much closer to home,based on the promise of an abundance of work and a management position in the not too distant future.
    As it turns out there was a very limited amount of work (our pay structure was called flat rate,ie piece work)so I burned through all of my cash reserves waiting for the management position to arrive, which never did,and had to teturn to the job in Manhattan, at a lower hourly rate,to add insult to injury.

  3. Charles Dart

    Being “loyal” to your company makes no sense. They are not loyal to you. Look at all the people Google and FB axed remotely and told never to come to the office again. Loyalty, if it ever existed, is dead.

    Look out for #1. They certainly are.

  4. I just left my last job with zero job risk for a new one with some risk (both more cyclical and going from 100% clout to starting fresh). But for a 60% total comp bump and 30% increase in guaranteed base pay (plus they gave me one time grants equal to pending equity grants at last company on top of that and guaranteed bonus in Yr 1), it was worth it. Should accelerate my time to retire by a year AND increase the amount I’ll have when I retire.

    1. A 60% total guarantee comp increase is great! Congrats. Let us know how it goes.

      It’s nice to know that at least your base has increased, worst case. How long were you at your old firm?

      1. 2 years, been in the field for about 11. Went from just above middle of pay for VP level to top 3rd pay at SVP level for same role. Had an internal offer as well up 45% but was going to require me to run two departments, including building the other from the ground up. I choose the one that was higher pay and less hours. Hard to believe my total comp is up 15x since I got my MBA, but I’ll take it. I was always the guy that didn’t job hop for most of my career which is why I had always been in the lower half to median salary range (but moving up very quickly) my entire career and decided this was enough to make it worthwhile.

          1. Little over 7 digit a year target comp (bonus based on company’s annual performance, RSUs half time vest, half company’s performance). Guessing I’ll retire in 3-4 years with 5-7m net worth. Each year I can keep working though I can save about $450k a year after taxes so we’ll see…working 10 more years would put me well into 8 digits even with an average market.

  5. That is crazy!! I watched that Netflix golf show like a hawk and I have never watched golf for more than 5 minutes at a time otherwise lol. Highly entertaining. I’m in shock to hear they merged, wow. I totally missed the news.

    What an incredible story on that job offer you turned down too. I can see how that must have been tempting. But I think you definitely made the right call. NY is brutal in terms of competition and work stress. Too much of a grind, been there done that.

  6. Took the money. Have some regrets. But I will be able to retire faster. Finance is always easiest to take the money, but politics and fit is hard to estimate. CS was always a shit show lol

  7. Many, many, MANY years before I retired, I noticed that people who left my company would often come back to work for my company again after being gone for a couple or so years. Of course, they usually got a HUGE pay raise and a higher position. I thought, maybe my company isn’t so bad to work for if those who leave keep coming back? Naturally I did not appreciate not getting the same large pay increases they did. After all, they left to chase the big bucks while I stayed. I began to worry I was being financially stupid regarding my income potential in my prime earning years, so I made a list of the top five reasons why I should not jump ship. I wrote that list on a tiny post it note and placed it on the plastic bookmark in my Franklin Day Planner so I could keep those reasons fresh in my mind. Eventually, things all turned out ok in the end. Over the years I stayed with the company I earned credit in its 3% contributory pension – which had a substantial five year period certain payout at age 55 with “Magic 75” (i.e., years of service at the company + age 55 = 75). This gave me and my significant other plenty of cash for both our (Fat FIRE) living expenses and investing in my tax deferred rollover IRA account, such that our net worth has just about tripled over the (almost a) decade (!!!) since I collected my final paycheck.

    So I guess I don’t actually regret staying at my company for almost 29 years after all. Oh, and I certainly DON’T regret staying in the 3% contributory pension when the company “encouraged” everyone to switch over to the non-contributory pension because “it was just the same” as the contributory pension. But the asterisked fine print on the employee letter stated the company reserved the right to modify the plan in the future. Maybe I wouldn’t like those changes? After awhile (a year maybe?), I heard the non-contributory plan removed the “Magic 75” provision. Later I also heard that “years of service” was defined as, not years of service with the company, but years in the non-contributory plan (!). One of the long term managers had tried to convince people NOT to switch to the non-contributory plan, but I don’t recall him having much success in doing so. I stuck with the contributory pension because (1) as a software verification engineer my job was to pay close attention to the details, so I ALWAYS read the fine print on any and all important documentation, and (2) if the company is strongly encouraging their employees to take a certain action, that action is probably in THEIR best economic interests, NOT the employees’. No mathematical analysis required!

  8. Sam, I’ve always been curious on exactly what you did at your banking job. Think it was with Credit Suisse. You have talked about flying around and entertaining clients and it was a grind but what exactly did you do day to day? Would be useful for your audience to understand more about the banking world. I mean, I understand the work to take a company public or issue new bonds to raise capital etc, but that doesn’t look like what you did. Surely you weren’t day trading for the firm? Anyway, thanks for all you do to educate us and sorry for my stupidity, but this world is completely foreign to me. Could be a fascinating post. Thanks!

    1. Institutional equities. Covered international index and active fund managers. Block trades. Find demand for IPOs. Corporate and research access. Service business and a lot about building good relationships.

      How about you? Have you ever heard the opportunity to take the money but did not? What are you do for a living?

    1. Yes, good point. She would have tried to work out of the New Jersey office for her company. Her job transfer would not have been a guarantee, which creates another uncertain variable.

      I think she would have gotten the job.

      Any regrets by you for taking the money?

      1. Not so much the money, but I did just turn down a job. Pay would have been the same in a lower cost of living area (Washington State > Virginia). I applied knowing they did not offer relocation, but that was the deciding factor. It’s too much of a hassle to move now that I am in my mid 30’s. I also would have accepted if they gave me an offer sooner after the interview. It took about a month which I guess is typical for gov. job. The same day I got the offer, I had a performance review with my boss. He had sniffed out that I was looking for jobs and made a hard pitch for me to stay. You never know how the management will be at a new job, so that also was a factor.

  9. Money over morals and ethics every time, we’ve proved that over and over again by doing business with murderers and dictators.

    1. It’s a question I thought of after publishing this post bc I never would have written How To Engineer Your Layoff if I had not left.

      After 11 years, the answer is yes! But, of course, I had to spend the time writing it and updating it overtime. But yes, creating the book was a financial positive and a societal positive to empower employees.

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