Golden handcuffs are a design feature

Somewhere in your building there's a plan document with your name on it. Or it’s probably on a fancy server.

Inside is the reason you haven't seriously considered that head hunter’s call.

Deferred comp. A retention plan. A SERP, maybe.

But there’s another more honest name: golden handcuffs.

Under the tax rules these plans live in, that money can only stay untaxed while you could still lose it.

Stay until the date, it's yours.

Leave early, some or all of it evaporates.

Read that sentence again.

The plan doesn't work unless leaving is expensive.

And boy-oh-boy… that's not a flaw in the design. That is the design.

Your employer isn’t being sneaky. Not really. Retention plans… well… retain. That's the deal, and don’t get me wrong, it can be a good deal. But it means some of the biggest numbers on your personal balance sheet come with strings, and those strings could be steering your decision making.

Whether you can take the better seat. When you can be done. How loudly you can disagree in a board meeting, if we're being honest.

I talk with sharp, capable executives who can quote their system's payer mix from memory... and can't tell me their own next vesting date.

So that's today's question. Do you know yours? The actual date, not the ballpark.

If you'd have to look it up, that's worth noticing.

All the very best,

John Montgomery