Making Sense of a Signing Bonus in a Physician Employment Contract
Some years back, the Boston Red Sox gave Trey Ball (great baseball name) a $2.75m signing bonus. That same year, the team gave Forrestt Allday (another great name!) $10,000 for his signature. How much is yours worth?
A signing bonus in a physician’s employment contract is an enticement for the doctor to sign the contract. Not all hospitals and private practices offer them, but – in my experience – they are fairly common in initial offers and very common following negotiation.
And if this is your first job after your residency or fellowship, a physician signing bonus can be crucial. Depending on your current financial situation – many physicians freshly out of a residency or fellowship are strapped for cash – an initial lump sum payment of, say, $30,000 might have a much greater impact on the quality of your life if you received it upon starting work rather than piecemeal throughout the year.
Also, if you’re seeking higher pay, keep in mind that many organizations prefer to adjust compensation through a signing bonus. Adjusting your starting annual salary may be an administrative nightmare for the employer. Maybe their board has approved $x as the starting salary, and any adjustment would require a new vote of their board. Maybe the salary adjustment you’re seeking would leapfrog you over people with more seniority, leading to mutiny.
What’s reasonable to ask for? Depends on their offer, the average salary for your specialty in your area, your negotiating leverage, their administrative flexibility. Figuring out an appropriate amount, how to structure the payment, and a solid negotiation strategy, are things that you should work on with your attorney. Contact us at the Reinstein Law Firm, PLLC before signing anything.
A physician signing bonus may make good sense in your situation. Then again, you can always try out for the Red Sox and go after that Major League Baseball money.
Meanwhile, as they say, don’t quit your day job.
Typewriter image via Wikimedia Commons