Most firms by now have a good idea of what the budget will be for next year. The CEOs have set optimistic goals and pushed their 1-downs. It cascades from there until all line managers are generally stretched and unhappy. Making next year’s plan will be no easy task.
The vast majority of corporate America has had a so-so year. Nobody is really killing it. The take-off point for next year doesn’t feel good. CEOs have a tough task. First they have to go to their Boards sell the prospects for next year. Next they have to secure a bonus pool. And this is all most senior corporate executives really care about. Most don’t have many annual bonuses left and they need to make each one count.
I have just been on the inside in this conversation and I can tell you how the bonus pools are going to look. The reason I can say this with confidence is I am right in the middle of this scene with my business and the other senior managers in our business line. My first hand conclusion is that bonus pools will stink. Senior executives will never get back to the earnings levels before the Great Financial Crisis. It just won’t happen this year. Again.
Every year there is huge anticipation about the bonus conversation by the general population. This year will not be any different. Trust me that it’s wasted energy in a world of poor economic growth and rapidly changing technology depressing corporate margins. I have seen this train wreck before, but I have always been too emotionally invested.
I was devastated in 2012 when my business grew nicely again and my bonus stayed flat. Since then I have never made more than 1/2 of what I did before the GFC as a very senior executive. But today my attitude is very different. The reason I don’t get upset anymore is that 3 years ago I set out on a course to exit my job on my own terms. My plan is to stay as long as I can and enjoy my profession, but not stress out about my annual bonus.
I decided to take things into my own hands. I decided to change my mindset and change my future. I had to get busy every day doing something to make this happen. I had a lot to learn about the real world outside a corporate cocoon. But I developed a solid plan.
My plan is actually pretty simple — Make money by what I do, then make money by what I know.
When you actually look outside of your everyday corporate existence, there is an enormous opportunity for senior execs to monetize their experience and skills. The same technology killing corporate profitability can be harnessed by entrepreneurs who are later in life. The beauty is you can do all of this while you still have a day job and have the best of both worlds.
My approach was simple and yours can be too.
I spent 3 years getting my finances turned around, getting my family on board, and building a Disaster Fund. I learned how the New Economy works and figured out how to leverage my corporate executive skills to the max. All the while I have created multiple income streams independent of what my boss thinks of my performance. I love what I do and I intend to continue to do it. I also know a career in your 50’s is very fragile.
I’m prepared for a bad bonus conversation or even worse.
For 15 years I watched Goldman Sachs tell people in good years they were holding something back for the next lean one. The problem is they never delivered in those lean years. So take the last years of your career and build a durable income for your future. Like me, you won’t sweat the bonus conversation ever again.