"The employee must be employed on the Bonus Payment Date. An employee whose employment with the Company ends for any reason, voluntarily or involuntarily, prior to the Bonus Payment Date is not bonus eligible and will not be paid any bonus, except as required by local law."
Let's remember that the bonus was earned for the last year of employment. It is fully earned, yet they won't pay it if you aren't still employed months after you earned it.
couple of facts: You must be employed on the day of the bonus payout. Right, wrong, or indifferent, that's what the bonus plan says.
The pool was funded to 120% this year. Managers (and the entire management chain above can adjust up or down as they see fit before anybody's final number is determined. This is one of the main reasons, why this process takes a couple of weeks after the FY-end numbers are run. The 120% is not to mean that anybody with an average performance or by meeting all of their KPIs get 120% of their target. Solid performance still earns 100%.
By going from semi-annual to annual payout shifts the incentive. You can expect to see (as we have seen last year) a surge in voluntary resignations as some people hold off until they pocket the bonus before they give notice. I have seen many people in my career who make the wrong assumptions and quit right after the fiscal year and are then surprised that they don't get a bonus. Read the documents - they are all readily available internally.
I have been at VMW for over a decade, and I am pretty sure I remember reading a comp plan many years back that said you had to be employed through the last day of the bonus period in order to qualify for the bonus; not the day of the bonus payment.
The bonus is certainly income. You declare it on your income tax. Smart people will calculate their total pay package including paycheck, bonus and stock. The bonus was earned as of Dec 31, 2021. It is paid out 4 months late. Even if you go by Fiscal year it was earns as of Feb 22, 2021 and is being paid out 2 months late. It is fully earned. Other places that I worked pay out as long as you were employed at the end of the earning year. I don't know any company that denies you earned income just because you left before the payout date.
The money for a bonus is not income. It's not yours until it is awarded. If you don't work at the company, it's not awarded.
Changing the bonus from 2x a year to 1x a year was certainly done to penalize people who don't stay the whole year, but it's basic policy for most companies.
If you have a counter example of companies paying bonus to previous employees, please share.
Something can exist where a law has not been written against it, but it can still be unethical. Workers had to fight to get things made illegal that should have been already illegal. Keeping money that someone earned just becase the have moved on is morally wrong.
If you got less than your target that money was given to someone else on your team. Your manager can manage the entire pool and can decide what percentage to give to anyone.
It is an unfair and uncompetitive system, but it is legal and VMW leadership is d-mb enough to think they can offer this and still be a competitive company. They are severely wrong, but then again, they are quite good at being severely wrong.
I heard somewhere that the bonus pool was funded at 120%, but your manager has the ability to adjust your individual amount. So if your bonus was less than 120%, does that mean your manager has taken from you in order to give more to someone else?
This is theft and shows the true nature of the leadership team towards the employees. Word will get around and they will have even more trouble hiring qualified workers.
No it is not normal to be required to be employed when the bonus is paid out. It is normal to be require to be employed when the bonus is earned. If you quit your job they are legally required to pay you for your time worked. This is the same thing. This bonus was earned in the prior year. It was fully earned. The payout is months after it was earned. This is just a way to sc--w people out of earned money. The bonus is part of your pay plan just like your regular paycheck.
Why would you expect to get paid a bonus if you didn't work for the company when the bonus is paid out? Being employed is usually a precondition.
Sure, changing the bonus from 2x a year to 1x a year was another way to sc--w the employees and take away bonuses for people who leave in the middle of a year, but now that the cat is out of the bag.... it's normal to require being employed to get the bonus.