A $1 million salesperson signing bonus is not a growth strategy


It’s useful for us all to remember if we can’t spot the sucker in the room, it might be us. This is especially true of negotiations, which is why this Inside Mortgage Finance note last week stuck with me:

A large nonbank recently offered a top-producing loan officer a $1 million signing bonus to jump ship and join them. This story comes from a well-respected industry veteran who knows a thing or two about closing loans and swears it’s true. We know few other details about this supposed offer, but it seems like a clear sign that some shops are desperate to increase originations in what most likely will turn out to be a challenging year for loan production…

Another industry veteran told us the most outlandish signing bonus known to him was $200,000 paid to a $60 million-a-year producer. He had one word for it: stupid….

In the case of paying $1m for a loan officer, I have to agree. A signing bonus, whether large or small, is not a growth strategy. It’s a short-term talent grab.

But it has clawbacks, some argue. So what. Money used to buy talent is a finite phenomenon, and that up-front goodwill—while necessary in a competitive market—runs out. Company innovation, service, and culture are what attract and retain talent long term.

It’s a cliche because it’s true, and even the most cynical, money-first salespeople who claim they don’t care about culture still react well to innovation, service, and culture. Over the years, I’ve seen those cynics become a company’s biggest culture evangelists once they settle in, and the signing bonus is past history.

So if you’re recruiting people overly-focused on outsized signing bonuses, think hard about what kind of team member you’re getting and what kind of culture could result.

Final word in fairness to whatever company did this: If it’s a single loan officer, my comments stand. If it’s a “loan officer” that’s actually a company-sized team, then it’s possible such a large sign-on could be justified with the right deal provisions that lock in individual producers and don’t just focus on a single person.




Comments [ 1 ]
  1. Sue Rainwater says:

    Agree with you 100%. $1M paid in fourth quarter 2021 was not unheard of – usually came with a 2-3 year clawback. There are no million dollar offers in second quarter 2022 – if there are, then the company offering had better be subtracting the refi volume out of the candidate’s volume projections.


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