Weil Gotshal delays bonuses until January
Cravath set a relatively high standard for associate bonuses this week, awarding fifth year associates a $34,000 bonus.
Weil Gotshal followed up with the announcement that it will match the Cravath scale, though it won’t pay bonuses until the end of January, 2013. The January award is a change for the firm which has paid bonuses in December in recent years.
Above The Law compiles a few possible reasons for the delay:
1. With the looming fiscal cliff, partners might be looking to claim the bonuses as a deduction in 2013 rather than 2012, since the marginal tax rates will likely be higher in 2013.
2. It might be that the firm hadn’t planned to pay such large bonuses, and they decided that they needed to pay out in a new quarter with an adjusted budget.
3. The firm might be planning to switch from seniority to a merit-based system, which would allow the firm to say that it is paying to the Cravath scale while cutting back on a case-by-case basis so that they are only paying within their budget.
4. Delaying the payment is an decent retention tool, since associates are less likely to leave until adter bonuses are paid.