Friday, November 25, 2011

The BIG Change...

On July 28th, at 8am, I received my midyear performance review from GigantoMegaBankCorp.

GigantoMegaBankCorp reviews employees on a 1-5 integer scale, on 5 major categories, each weighted differently. Each category make up as little as 5%, and as much as 35% of your overall score. Each category consists of between 3 and 15 weighted subcategories, scored, averaged and rounded down to the absolute value' to reach the score in the major category. The overall score is also then giving a weighted average, and rounded down to absolute value. 1 and 2 indicate unacceptable performance and minimum acceptable performance respectively, 3 indicating "good" performance, 4 indicating "exceptional performance" and 5 indicating "outstanding performance".

Performance reviews are used or a lot of things; but from a tangible standpoint, your performance review is used as a multiplier for your annual bonus, your profit sharing award, and your stock option grant (these are all substantial portions of your annual compensation in the financial industry, frequently more than half; but in my case, all of those things combined make up about 1/3). In order to get any "incentive based" or "performance based" compensation, you must average at least 3.0 overall, AND receive no score on any major category lower than 3 (though you can be rated 2 or 1 on any given subcategory. If you make an average of between 4.0 and 4.9, you get 125% of your "target" bonus, and baseline stock options and profit sharing. If you make an average of 5 (for which, obviously, you have to receive nothing but 5s), you get 150% of your target and baseline.

The first four years I was with GigantoMegaBankCorp, I was never rated less than a 4 on any category, always received 5 ratings in several categories (in fact, one year I got all 5s and got 150% bonus); and I received multiple sizable bonuses, and several promotions. I started off as an Architect 4 on contract, with no title other than "Systems Architect" and no direct management responsibility. I ended up as an Architect 6 {the highest architect rank that is actually still an architect and manger, and not purely a manager} and "Chief Architect" of the biggest division of the bank, leading a team of 8 senior architects, and managing project teams of dozens, even hundreds).

For 2010 I received mostly 3s and 4s in the major categories, but I received one 2; and therefore I didn't get any bonus or stock options. As most people reading this probably know, 2010 was a bad year for me, and yeah, it had a negative impact on my performance. In 2011 though, I've generally been turning it around pretty well, now that I'm receiving the proper treatment for my health problems (among other things).

The midyear review is generally just a "guidance" number, intended to give you an idea of where you are for the year, and any changes you may need to make for your end of year review; however, if you received a lower year end review score, the midyear also replaces it as your "current review" score, for internal job applications, promotions, transfers etc...

From 800am to 830am, I went over my review with my manager. I got a 4 overall on my midyear review, with very positive comments, plus some additional suggestions about how I could make sure I get a 4 or better for the full year, which my manager was confident I would reach.

At 830am, there was a mandatory meeting for nine members of my department plus their managers, including me. The director of my department, the chief architect of GigantoMegaBankCorp over all, announced that subsequent to our recent major re-organization (following our purchase of another major bank 18 months ago), an analysis of our "senior technical and executive staff" had been conducted, and we would be taking a manadatory 15% across the board staff cut (9 people), with specific cutting targets in the three highest grades; and that the positions of the staff members in that meeting were being eliminated, and we were being "displaced" as of October 3rd.

He then opened the bridge to the rest of the department, and made the announcement to everyone.

Under the terms of my "displacement", I worked my position from the announcement until August 3rd, when I went to "transitional leave"; where I was still paid, but did not have any active duties or position; the purpose of which is to allow you to try to find another job within the company.

From October 3rd on, I could either remain on "continuation leave", and be treated as an employee for most purposes, including benefits, employment verification, internal positions etc... for six months, or I could take a lump sum payment for the amount of base salary I would have received for that same period.

Also, because I was an active employee for ten months of the year, if I was bonus eligible, and a bonus is distributed for 2011 (it would be distributed between the last two weeks of February and the first two weeks of March), I will receive 83% of the bonus I would have received; and my stock options and grants that would have matured, will mature.

In theory, those two things combined should be worth about $30,000 pre-tax come March, on top of the severance; but it's very uncertain.

I decided to take the severance package. My wife works for GigantoMegaBankCorp as well, with the same benefits eligibility, so we just switched benefits around so that she's the primary member, and I'm the spouse; so our benefits are covered.

As of October 3rd, I have been officially laid off from the job I held for more than five years; as chief architect of the retail division of a major financial institution.

Unfortunately, since that time, I have been contractually prohibited from speaking about it publicly, or in any detail.

It was a great job in some ways, a horrible job in others... just like any job...

...but the thing is, it was a job I was doing for someone else.

It was a job that, fundamentally, I was never happy with; because it wasn't getting me (or my family), where we want to be.

On the other hand, it was also a job that gave me a reasonably large severance package...

...Big enough, that my family and I could have lived on it for at least a year; maybe as much as two years if we cut back to the absolute minimum, and you include the PTO payout, and the cashout of my 401k... Or at least it was big enough for that, before the IRS got ahold of it.

Just an aside, the IRS took about $37,000 in regular taxes from me this year so far (that's January to October 7th. Actually, it's a bit less than usual; the last few years they've taken around $50k to $60k per year, but I didn't get a bonus this year, which they withold at a higher rate), then they took about $27k out of my severance package. I decided to cash out my 401k rather than roll it over {I don't like the market for the next two years, and I honestly think the prepayment penalty is less than I'm going to lose, between inflation and market losses. I think I have better uses for that money} and AFTER the prepayment penalty, they took another $7k . That's a total of about $71,000 in tax withholding.

From that $71,000 in withholding, I estimate my actual tax liability for the year from all the compensation I earned from GigantoMegaBankCorp, to be about $40,000; so in theory I've got a pretty damned big tax return coming.

The funniest thing...

Since I entered the ranks of the "unemployed", I've been busier than I ever was when I was "employed" (which, yes, is part of why I wasn't particularly happy with the job).

First, on July 28th at 830, I was laid off... On July 28th at 1130, I got my first phone call with a job offer. I didn't take it, for several reasons; the first of which being that if I accepted another job before October 3rd, I wouldn't get the severance package.

At the same time, I also got a couple of temporary contract gigs, that were providing me with significant outside income; and of course I had offers pending from October 3rd on.

Anyway, even after the IRS took damn near half (ok... not quite that much, but a hell of a lot), my "displacement settlement" was enough to live on for at least a year, presuming we made some cuts etc...

We've decided to go a different way.

I'm not very happy with the way things are right now... in a lot of different ways.

I love my wife and family, I love where we live...


Lot's of other things though... I'm not really happy with.

Yes, I could make a lot of money continuing what I have been doing the last 10 years; moving back into consulting again or taking a similar position at any number of other companies in the finance, medical, or technology industries.

Frankly, there aren't a lot of people who can do what I do, and there are a lot of companies that need it.


I am tired of either working for another big company, or being dependent on them as a contractor or subcontractor; and in my primary field, that's where the money is.

My wife and I have thought a lot about this, done a lot of research, weighed a lot of options, and done a lot of soul searching...

A LOT of thinking, researching, and soul searching.

About three months worth in fact...

We've decided to do something different.

Instead of going for another big money contract gig, or laying back for two years, or just banking the money...

We've decided to do something different.

The first thing we've done is, Mel has transitioned to full time employment with GigantoMegaBankCorp, and will be earning a reasonable amount of money (plus our medical benefits).

The second thing we've done, is get out of the hole we've been put in by the last five years.

All my personal debt excepting our car loans, all my medical bills, all the remaining legal bills, all my credit cards... everything... and a bunch of Mels debt (not all unfortunately, she owes a hell of a lot because of the custody case, and we wouldn't have anything left to live off of) is now paid off.

It was a deep hole, and because we've been in it for several years, our credit getting worse every day; it was a high interest hole. We were rolling loans over periodically at high interest rates (including pawn and payday loans at times); so, that we were paying about half interest and half principal on the majority of those payments to the tune of several thousand dollars a month.

No, that's not a good situation to be in. It was also a situation we didn't have a choice about. Our savings went entirely into the legal and medical bills; and we needed that money, right then, for things that couldn't be put off, and that was that.

No, we're not stupid... we were left without options. I would pay off as much as I could, when I could, in the background; but it was repeatedly two steps forward three steps back.

The last two years also put either Mel or me, or both of us together; into about $30,000 worth of collections, some for Mels stuff, but a lot for medical bills my insurance didn't cover, and which because of the those other things, we couldn't always pay or couldn't pay in a timely manner (for example, in January and February of 2011, I had $16,000 in un-covered medical expenses, $3000 for my brothers funeral, $5000 in legal bills, $3000 in medical bills for the kids relating to the custody issue. That $27,000 screwed us up until like September); screwing up our credit rather badly.

Note: One major point of irritation there. My insurance company has this irritating habit of paying a bill, then six months later, they do a "payment review" and they charge back a part of what they originally paid from the original service provider. Then, the original service provider bills me; and, not knowing this, or missing it in the FLOOD of paper I get every day (there's a lot of medical bills associated with being a cancer patient. Often hundreds of pages a week) I get sent to collections after 90 days... very irritating.

That's in addition to about $20,000 worth of other unsecured or high interest debt (personal loans, payday loans, pawn, credit cards etc...) ; for a total of about $50,0000

It's all paid off now.

The entire remainder of our debt is either secured, low interest, or personal on a no interest basis.

As of today, we're completely out of the hole, but for the cars, and Mels remaining personal debt.

By the way: relating to that, part of Mels personal debt is all the people who ordered cookbooks that were never delivered. There's actually a very good reason why that happened, having to do with legal issues as well as financial issues; it sucks, it's wrong, but there wasn't anything I could do about it; and there's an even crappier reason why we are legally prevented from talking about . The next thing I post is going to be about that, but I don't want to interrupt this post for that info.

Also as of today, including Mels pay, and my unemployment benefits ($336 a week for six months by the way), we now have about 6 months of living expenses banked. If we get the tax return and the bonus etc... it's more like 12 to 18 months.

On Monday, presuming what I've been waiting for happens, I'm going to write about what we did with the rest of the money and what I'm planning on doing for the next few years.

Note: I was wanting to post this on Tuesday by the way, but events overtook me again, and I wasn't able to say the things I wanted to be able to say until today, and I didn't want to say anything else until I was able to say this. The reason I'm not posting the rest today, is for the same reason. I should be able to do so on Monday.