Screwed on forgivable draw

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Nov 19, 2009 9:45 pm

Can anyone show me in black and white the commonly accepted explination for a forgivable draw? Google gave me nothing. I've been in this biz for 19yrs and felt I had a pretty good handle on how it worked. It had always been a moot point as i've been able to start producing from day 1 any time I changed firms. This time I'm getting shafted I think. My offer contained a 3 month forgivable draw.. month one (Sept.) I have almost zero production since my licenses didn't come over till the 22nd of the month. Month 2 (OCT) I did $32k in production but did not get a comm check since they pay the following month. I did get a draw check for $2k. Everything seems fine.. then I get my commision check in NOV and BAM $2k deduction for the draw they paid me in OCT. I call HR to see what gives. I'm told since my "production" was in OCT, even though the commissions didn't pay out till NOV the netted the 2 against each other. So even with a 3 month forgivable draw my net income for OCT was $0.00 since the $2k they paid me they deducted from my Nov Commisions. I'm having trouble understanding whats so forgivable about my draw?????????

Nov 19, 2009 9:57 pm

feel free to chime in if I'm out of my mind or if I'm right ?????

Nov 19, 2009 9:58 pm

what firm?

I have never heard of a forgivable draw.  Your up front check is a forgivable loan, but the draw check starting in month 1 is typically not forgivable its simply a draw until you do enough commissions to pay it back.

Nov 19, 2009 10:02 pm
notbostrom:

Can anyone show me in black and white the commonly accepted explination for a forgivable draw? Google gave me nothing. I've been in this biz for 19yrs and felt I had a pretty good handle on how it worked. It had always been a moot point as i've been able to start producing from day 1 any time I changed firms. This time I'm getting shafted I think. My offer contained a 3 month forgivable draw.. month one (Sept.) I have almost zero production since my licenses didn't come over till the 22nd of the month. Month 2 (OCT) I did $32k in production but did not get a comm check since they pay the following month. I did get a draw check for $2k. Everything seems fine.. then I get my commision check in NOV and BAM $2k deduction for the draw they paid me in OCT. I call HR to see what gives. I'm told since my "production" was in OCT, even though the commissions didn't pay out till NOV the netted the 2 against each other. So even with a 3 month forgivable draw my net income for OCT was $0.00 since the $2k they paid me they deducted from my Nov Commisions. I'm having trouble understanding whats so forgivable about my draw?????????


 
 
Does this mean they deducted 4K from the commission check? 2K for November and 2k for October?
 
Nov 19, 2009 10:07 pm

November was the commision check, they duducted 2k from it taking back the 2k they paid me in OCT.

Nov 19, 2009 10:07 pm
notbostrom:

feel free to chime in if I'm out of my mind or if I'm right ?????





 
With the little info you gave, I think you might be mistaken......respectfully....
 
Your October production is paid in early November.......But, any monthly draw would be taken out of that paycheck.
 
Most firms let you produce until 3-5 business days before the end of the month......Then pay you anywhere from a few days into the next month to the 15th of the next month........But, it's still your previous month's pay.....
Nov 19, 2009 10:13 pm
notbostrom:

November was the commision check, they duducted 2k from it taking back the 2k they paid me in OCT.


 
They had to take 2K out, either for October or November.......right?
 
I mean, it's a draw....not a salary......you get the 2K that month anyway.....so, they take it out of the commish check and pay you twice a month or whatever....
 
So, if your argument is that you are now in November, and you owe nothing for October, then they should have deducted 2K for November.......
 
They didn't do both, so you should agree that losing 2K was fair........whether it was for October or November is next on the list to clear up......
 
In my opinion, it was payment for October production, which makes it fair to subtract October's draw......
 
But, I wish you luck pursuing it and maybe catching a break and getting the extra 2K......
Nov 19, 2009 10:17 pm

i see both sides but when the net result is I had $0 compensation in Oct after they took away the supposed forgivable 2k they paid me.. what is so forgivable about that?? how would that differ from it being non-forgivable? I'm not expecting it to be added to commissions.. just not deducted from......

Nov 19, 2009 10:21 pm
notbostrom:

i see both sides but when the net result is I had $0 compensation in Oct after they took away the supposed forgivable 2k they paid me.. what is so forgivable about that?? how would that differ from it being non-forgivable? I'm not expecting it to be added to commissions.. just not deducted from......





 
They "fronted" you the 2K in October.......You produced $32K in commissions on October, which resulted in a check being paid to you sometime in early November.......The $32K in commissions, after the grid, gave you some pay, $x.......They took their 2K for October back and paid you the rest......right?
 
To me, you didn't get screwed.........But, maybe you can convince someone (HR, MGR, whatever) that you did......and they'll throw you a bone with the other 2K....
 
Good Luck......
 
Nov 19, 2009 10:24 pm
notbostrom:

i see both sides but when the net result is I had $0 compensation in Oct after they took away the supposed forgivable 2k they paid me.. what is so forgivable about that?? how would that differ from it being non-forgivable? I'm not expecting it to be added to commissions.. just not deducted from......


 
 
Non-forgiveable means they would have deducted the 2K from September and October....
 
You got $2K in September, right? they never took that back.......cause you generated $0 in commissions......or at least less than would generate a $2K payout......They forgave that......That's why it's called a forgivable draw.
 
If they woudl have deducted the 2K form September......well, then that would be a non-forgiveable draw.......where any month you don't cover your draw, it gets carried forward until you can cover that month and catch up on any previous month's shortcomings.....
Nov 19, 2009 10:27 pm

Isn't the point of forgivable that they don't take the 2k back after the fact? still having trouble seeing what's so forgivable about it :')

Nov 19, 2009 10:39 pm
notbostrom:

Isn't the point of forgivable that they don't take the 2k back after the fact? still having trouble seeing what's so forgivable about it :')




 
To me, they paid you the 2K in September.......They forgave that......not taking it back.....and not keeping it it as part of a running total you owe back to them when your commissions could cover it....
 
In October, they fronted you the 2K......you generated 32K in commish.....which they paid you on, less the 2K they fronted you......
 
That's all I got......
Maybe some others will chime in and give their opinions.......
 
You may want to bump the post, though, since new ones may drive this one to the bottom of the page or page 2 (the dead zone) within a day or two.....
 
Good Luck......
 
Nov 19, 2009 10:55 pm
SFEZ:
notbostrom:

Isn't the point of forgivable that they don't take the 2k back after the fact? still having trouble seeing what's so forgivable about it :')




 
To me, they paid you the 2K in September.......They forgave that......not taking it back.....and not keeping it it as part of a running total you owe back to them when your commissions could cover it....
 
In October, they fronted you the 2K......you generated 32K in commish.....which they paid you on, less the 2K they fronted you......
 
That's all I got......
Maybe some others will chime in and give their opinions.......
 
You may want to bump the post, though, since new ones may drive this one to the bottom of the page or page 2 (the dead zone) within a day or two.....
 
Good Luck......
 
 
Thank you for your thoughtful replies
Nov 19, 2009 10:56 pm
mlgone:

yo** r f**cked anyway



Hi Devil

 
based on that comment I'd guess your production this month was well south of 32k.. if you put as much effort into your production as you do with worthless smart a** replies you might do 32k your second month as well
Nov 20, 2009 8:02 am

In my erxperience, sometimes a deal can include a guaranteed salary for "x" number of months to get you through until your accounts have been transferred. They may do this because there can be triggers before you get the large deal check. There are many ways a deal can be tweeked. It doesn't sound like it was a "forgivable draw" per se. Read the fine print. Also read the comp plan book carefully so you can understand when commissions are earned vs when your firm pays them out. For example, are they paid out the same month they hit or are they paid out the month after they hit.

Nov 20, 2009 8:21 am
notbostrom:

Can anyone show me in black and white the commonly accepted explination for a forgivable draw? Google gave me nothing. I've been in this biz for 19yrs and felt I had a pretty good handle on how it worked. It had always been a moot point as i've been able to start producing from day 1 any time I changed firms. This time I'm getting shafted I think. My offer contained a 3 month forgivable draw.. month one (Sept.) I have almost zero production since my licenses didn't come over till the 22nd of the month. Month 2 (OCT) I did $32k in production but did not get a comm check since they pay the following month. I did get a draw check for $2k. Everything seems fine.. then I get my commision check in NOV and BAM $2k deduction for the draw they paid me in OCT. I call HR to see what gives. I'm told since my "production" was in OCT, even though the commissions didn't pay out till NOV the netted the 2 against each other. So even with a 3 month forgivable draw my net income for OCT was $0.00 since the $2k they paid me they deducted from my Nov Commisions. I'm having trouble understanding whats so forgivable about my draw?????????





I don't know why you are questioning this. You work for either a wirehouse a bank. Either way, their # 1 reason for being in business is to screw both their clients and their employees. Having been in the business for 19 years, this should come as no surprise to you.



Nov 20, 2009 8:25 am
SFEZ:
notbostrom:

Isn't the point of forgivable that they don't take the 2k back after the fact? still having trouble seeing what's so forgivable about it :')









To me, they paid you the 2K in September.......They forgave that......not taking it back.....and not keeping it it as part of a running total you owe back to them when your commissions could cover it....



In October, they fronted you the 2K......you generated 32K in commish.....which they paid you on, less the 2K they fronted you......



That's all I got......

Maybe some others will chime in and give their opinions.......



You may want to bump the post, though, since new ones may drive this one to the bottom of the page or page 2 (the dead zone) within a day or two.....



Good Luck......







Sfez is right.   In my experience there are 3 types of draws.



1. Salary: You receive a monthly amount and commissions are paid on top of it.

2. Forgivable Draw: You receive a monthly amount and if you make more than that amount in commissions, it gets deducted from the commission check. Each month you start fresh, meaning there isn't a rolling balance from previous months.

3. Non Forgivable Draw: Same as #2 except negative months (where your commissions didn't cover the draw continue to roll forward). So, if you have two straight months of $2K in draw and no commissions, you have to make $4K in commissions before you get back to even.



Problem is, people often times think "forgivable draw" is a salary. Of course, managers that are under the gun to hire a certain amount of new people don't do the best job of explaining this.



Sounds like you do have a forgivable draw, but you thought that meant salary. So yes, each month you will get $2K given and taken away if you earn enough commissions.



Nov 20, 2009 9:44 am

Yes, if it really says "forgiveable draw" in your contract you are right. However, most of the time it's a "forgiveable loan" and an "unforgivaeable draw". Does the platform make up for them trying to screw you??

Nov 21, 2009 6:21 am

UBS had stopped doing draw recovery about a year or so before I left. They said that they determined that not paying a draw outright may be violating minimum wage laws. They stopped tagging us for errors at the same time: it was all a result of the class action lawsuit for overtime (still waiting for the check).



If you want to stir things up, call your states attorney's office and ask them why you're not really being paid minimum wage. You might want to do that anonymously.
Nov 21, 2009 8:50 am

welcome to wall street.you are the bottom of the food chain next to the sales assistant.they will screw you every chance they get