Budget for the bonus buyout before your CFO search starts

By: Vince Crochunis, Senior Client Partner, Lyneer Search Group

If you hire a CFO or another senior finance leader in January or February, plan to buy out the bonus they leave behind. Put it in your 2027 budget now. Attach a 12-month clawback, and that buyout gives your new hire a financial reason to stay through their first year, when a rough start can turn into a resignation.

When do insurance and wealth management bonuses pay?

Mostly in February and March. Proxy statements from public P&C carriers and wealth firms show prior-year cash bonuses paying in those months. The New York State Comptroller calls December through March the “traditional December through March bonus season.”

Private carriers, MGAs and RIAs set their own dates, so ask each finalist.

So a candidate who resigns in January walks away from a full year’s bonus. Strong candidates won’t do that for free, and they shouldn’t have to.

Why is a bonus buyout worth paying?

Paired with a clawback, it buys you a year of commitment. You pay the forfeited bonus at hire. If your new CFO resigns inside 12 months, they pay it back.

A bumpy first quarter or a boss they don’t click with now comes with a price on walking out.

Now take the March hire. You wait for their bonus to pay, and they start in April with it already in the bank. If the first few months go badly, nothing ties them to you. You saved the buyout and got nothing for the savings.

How often do new hires leave in their first year?

Often enough to plan for. The Bureau of Labor Statistics followed workers born from 1957 to 1964 across their careers. Among jobs they started at ages 45 to 54, the average worker had 21% end in less than a year. That’s about 1 in 5.

In my experience, the first year is when a new leader is most likely to leave. A clawback covers that year.

How should you structure the buyout?

• Size it to the bonus the candidate forfeits. Ask for their target and their payment date on the first call.
• Pay it at hire as a sign-on payment.
• Attach a 12-month repayment clause for a voluntary resignation or a termination for cause. Have employment counsel draft it.
• Budget it now. A line approved with the 2027 plan in November is easier to get than an exception requested in January.
• If you run an RIA, the same logic holds when you hire a CFO or COO away from a larger wealth firm.

Get the November insurance brief

Lyneer Search Group publishes the Executive Talent Intelligence Brief™ for insurance on the second Tuesday of every month.

Lyneer Search Group is a retained executive search firm for insurance and wealth management, founded in 1993 and headquartered in Holmdel, New Jersey. Every retained search we’ve accepted since 1993 has ended in a completed placement.



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