ML PMD Stock Bonus

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Dec 29, 2011 9:04 am

Going through old posts, I found this information about the old ML POA program:

$10MM annuitized in 12 months = $100,000 in stock (vested in 7 or 8 years), and a $30,000 cash bonus. 

Do any of you ML PMD's out there know if a bonus like this is still offered in the new PMD program? Currently at another major wire whose training program is rapidly deteriorating, and could move my book over and clean up on this. 

Dec 29, 2011 10:12 am

No.  This certainly doesn't exist. 

Dec 29, 2011 10:15 am

Is there any other bonus besides the Quarterly 15% of revenue bonus? ie: something at the end of month 12, 24, 36

Dec 29, 2011 12:56 pm

Yes, there is another 15% bonus  at the end of each year if you meet all of the quarterly bonuses.  However, the compensation plan has just been changed for the 2012 year. 

Dec 29, 2011 5:53 pm

the 15% end of year bonus is staying for 2012.

How it works is pretty simple.  If you hit your annual hurdle you get a cliff vesting deferred comp bonus of 15%.  The bonus is "cash" but vests 8 years after you earn it.  I think you can invest up to 50% in company stock or 100% in mutual funds available in their retirement plan.

So if you do the math on the minimum hurdle people, you would get $37,500 (at 250K PCs) in deferred comp over 3 years, or more if you do more than the minimum.  By "more" I mean their top quartile makes about 100K in deferred comp with the program.   

Its a good deal except for the 8 year vest.  with the other 3 and 5 year deferred comp, though, that 8th to 10th year in can be serious deferred pay days.

The new hurdle structure is actually good for PMDs.  Nothing but PCs count.  Monthly bonuses, too, instead of quarterly.  Also, if you are on the high end you can boost it to 20% instead of 15% bonus. 

Dec 29, 2011 6:48 pm

FADavo, what are the monthly PC Hurdles for middle level (50-75k), and by "high end" for the 20% bonus, do you mean highest salary?

Dec 30, 2011 8:37 pm

the PC hurdles have not changed.  What they have done is simply break the quarterly hurdles down to monthly hurdles.  I actually think it is a good change because there is better chance for bonus (missing a hurdle puts you out for 3 months, now it only does for one).  

Pretty sure LOS 12 middle level hurdle is 40K pcs.  low level is 30K.  I think they are doing away with the middle level.  

The monthly hurdles now have 3 bonus levels.  If you just "meet" the hurdle you get 10%.  They have an "average second quartile" hurdle level that, if you hit, you get 15%.  If you hit the "average first quartile" level you get 20%.

As an example, the lOS month hurdle is 3K for the bottom level.  If you hit 3K, you get $300. bonus.  If you hit 4K (their second quartile average number) you get $600.  If you hit 6K (there average first quartile number - it might actually be a bit higher) you get 20% or $1200.  

To better understand how the numbers stretch out - the "min hurdle" at los 12 months is 30k, second quartile is like 50K and first quartile is 100K.  

I actually LIKE the changes they made to the PMD comp program.  I was happy about them until the general FA 250K minimum thing hit....  That could be a little rough.  

Dec 31, 2011 9:39 am

Interesting -- thanks for the information.  So the 250k Min HH applies to PMD's too?  Basically, it means you do not get net payouts unless the HH is over 250K, but it still counts towards your gross PC's, correct? Not a big deal while you are a PMD since the only hurdle is gross PC's, and if after you graduate, the HH is still under 250K, you can transfer to Merrill Edge or something that may be more beneficial for the client.

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Jan 19, 2012 9:46 am

FADavo, thanks for the great explanation.  I agree with you that the PMD comp plan changes are very good.

FB 41, I think the $250k min household is a huge deal for PMD's that graduate.  If you look at last year's SPA award, there weren't that many advisors (non-PMD) that qualifed with the $250k household minimum.  The majority of accounts that an LOS 5 year FA opens will be under $250k.  In my opinion, I think they will modify this aspect of the plan for future PMD's that come out of the program.