The Forfeited-Pay Make-Whole, One Vesting Schedule to a Signed Sign-On

This guide is for a candidate holding or expecting an offer who is leaving unvested equity and a pending bonus behind. The job is to convert one real vesting schedule into a single, defensible forgone-pay figure, then turn that figure into a make-whole sign-on the new company will actually pay, and to do it without signing a clawback that re-traps you. I carry one worked case all the way through, with the counts shown at every fork, so you can run your own numbers instead of borrowing someone else's anchor.

I do not re-tread how to value a grant you are receiving, or how to decode a generic repayment clause. Those live in other guides. This one is about the forfeiture side: what you lose, how to prove it, and how to get it back on terms you can live with.

What exactly do you forfeit when you resign?

You forfeit three distinct things, and they do not behave the same way. Unvested RSUs vanish outright, vested options become a funded decision inside a short window, and a pending bonus often zeroes entirely. Treat them as three separate lines or you will misprice the whole ask.

Unvested RSUs are the simplest and least forgiving. Whatever has not vested at your departure date is forfeited and reverts to the company. There is no exercise decision and no post-termination period. Value them plainly: forfeited-RSU value equals unvested shares times current market price.

Options differ. Unvested options are forfeited, but vested options survive termination subject to an exercise window. So their "forfeited" value is really the in-the-money spread you lose if you cannot or do not exercise before the window closes. Restricted stock already issued but subject to repurchase can be clawed back for the unvested portion, while the vested portion generally cannot.

The pending bonus is the one candidates misjudge most. If your plan requires you to be employed on the payment date, resignation can forfeit 100% of it, no matter how many months you worked.

The golden case I carry through this guide

One candidate, two years into a four-year grant at an equity-heavy employer. 4,000 RSUs still unvested, current price 50 dollars. 2,000 vested ISOs, strike 10 dollars, fair market value 50 dollars. A 40,000 dollar annual target bonus, bonus period the calendar year, resignation planned for the end of October, bonus paid the following March under an "actively employed on payment date" plan. I will value every piece of this and carry the totals to a signed clause.

How the 90-day exercise window changes the number

The default post-termination exercise window is 90 days, and it is a statutory line, not just a convention. IRC Section 422 requires ISOs to be exercised within 90 days of termination to keep ISO tax treatment. Options exercised after day 90 automatically reclassify as NSOs, which means the entire spread is taxed as ordinary income at exercise.

Some employee-friendly firms extend the window to 5, 7, or even 10 years. That is real money, but ISO status still dies at 90 days regardless of the printed expiration. With a standard 90-day window, unexercised options expire worthless on day 91. With a 10-year window you keep the right to exercise, but every exercise after day 90 is an NSO exercise.

This is why the window converts an unrealized spread into a hard cash-plus-tax requirement inside three months. If you cannot fund exercise, the vested-but-unexercised value is effectively forfeited too. The 2026 AMT exemption is 90,100 dollars for single filers and 140,200 dollars for joint filers, which is the figure that decides whether an ISO exercise before the window closes triggers alternative minimum tax.

For the golden case: spread is (50 - 10) x 2,000 = 80,000 dollars. Exercise cost is 10 x 2,000 = 20,000 dollars in cash. On an 80,000 dollar bargain element, a single filer is well above the 90,100 dollar AMT exemption once other income stacks, so exercise is a real cash-and-tax event, not a free roll. If the candidate cannot fund the 20,000 dollars plus potential AMT inside 90 days, that 80,000 dollar spread moves from "retained" toward "at risk."

Running the full count on the golden case

Here is every fork, with the count at each one. Work in this order and you can defend the total line by line.

RSUs. 4,000 unvested x 50 = 200,000 dollars gross. Now build the sharper anchor: of those 4,000, how many vest in the next 12 months? Suppose 1,000 vest in the coming year. That 50,000 dollar figure is the strongest negotiation anchor, because it is near-term, concrete, and hard for a recruiter to dismiss as speculative.

A note on back-loaded vesting. Amazon's RSU schedule vests 5 percent in year one, 15 percent in year two, and 40 percent in each of years three and four, which is why they lean on large two-year sign-ons of 80,000 to 100,000 dollars to bridge year-one cash. If your grant is back-loaded, counting the far-dated year-three and year-four tranches at full face value overstates your forgone pay and invites push-back. Date every tranche.

Options. 80,000 dollar spread, but at risk rather than forfeited outright. In the written breakdown this becomes its own line: "80,000 dollar vested-option spread, requires 20,000 dollar exercise plus AMT inside 90 days."

Bonus. Pro-rate first: PB = (A x D) / T. With A = 40,000, D = 304 days worked through the end of October, T = 365, that is (40,000 x 304) / 365 = 33,315 dollars. But the plan requires active employment on the March payment date. Resigning in October zeroes it. So the forgone-bonus line is 100 percent of target: 40,000 dollars, not 33,315 dollars.

That 320,000 dollar gross figure is the loud number. The defensible number is narrower and after-tax. A cash make-whole is taxed as ordinary income, so to replace 200,000 dollars of RSU value that would also have been taxed on vest, you compare net to net, not gross to gross. The near-term, high-confidence anchor is the 50,000 dollar twelve-month RSU vest plus the 40,000 dollar forfeited bonus, with the option spread flagged separately as recoverable only if exercise is funded.

The loud number anchors the conversation; the after-tax, near-term number is the one that survives it.

The procedure, end to end

This is the sequence I run on every forfeiture case. Advisors disagree on one ordering question: some run the option spread before the RSU count because it is time-critical, others after. I put it third here, but if your window closes soon, do it first.

Steps one through five are you at a spreadsheet, roughly three to four hours including a CPA call on the option spread. Steps six through eight are the negotiation, running from one conversation to a few weeks. Refolk can compress the front half: it writes your resume from your own history and tailors it to each posting, so the hours you would spend re-drafting go instead into getting the forfeiture math right. Start that side at Refolk.

How employers actually structure a make-whole

Two structures dominate: one-time cash and mirrored-vesting equity. Cash is the most flexible single line in any offer because it is a one-time cost, so recruiters can often approve a higher sign-on with minimal escalation. Equity make-wholes mirror the vesting you lost, usually by dividing a target dollar value by the closing price on a defined grant date. Every one of these carries its own clawback.

Read these as a menu of what is normal and provable. Gilead's second installment is paid only after the first anniversary, which is itself a retention device. Hain Celestial's 960,000 dollar bonus was described in the offer letter as recognizing "the bonus you are forfeiting from your former employer," which is direct evidence that make-wholes are tied to a quantified forfeited figure. 3M's award was "intended to partially offset" forfeited equity, the word "partially" signaling the discount I come to next.

What multiple can you actually win?

The make-whole multiple is a stock-price risk transfer, not generosity. The new firm absorbs future volatility on shares it is replacing, so it discounts. FAANG candidates have obtained 1x of unvested RSUs as sign-on, often paid after one year of service. Pharma and biotech anecdotally land nearer 0.7x, with the practitioner read being that "given a tight job market, you probably can push for 0.9x." These are self-reported anecdotes, not survey data, so treat them as anchors to counter from, not as fixed rates.

Presenting the ask so it survives push-back

Lead with a specific, after-tax number and a written breakdown, not a range. The sign-on is the most flexible line in the offer, so make it easy for the recruiter to say yes by doing their justification for them. The practitioner script is blunt: document the forfeiture specifically, for example "I'm walking away from approximately 85K in equity that vests in March," then ask for a sign-on that makes you whole, and calculate the after-tax amount, not the gross.

I'm excited to move forward. To make the transition work, I need the sign-on to offset what I forfeit by leaving. My current statement shows:

- Unvested RSUs vesting within 12 months: $50,000 (gross), ~$31,500 after tax
- Pending annual bonus, forfeited under an "active on payment date" clause: $40,000 (gross)
- Vested option spread at risk inside the 90-day window: $80,000, requiring ~$20,000 exercise cost plus AMT

Near-term, defensible forgone pay is roughly $90,000 gross. I'm asking for a make-whole sign-on of $90,000, structured as cash, paid on a schedule we can agree, grossed up to cover the tax so it is a true net make-whole on the equity line. Happy to share the vesting statement.

Note what I left out of the headline ask: the 200,000 dollar full RSU face value. Anchoring on far-dated tranches at full price overstates forgone pay and invites the recruiter to pick the number apart. The 90,000 dollar near-term ask is tighter and harder to refuse. You can still mention the full forfeiture as context.

On proof: offer letters tie the make-whole to a quantified forfeited amount, which implies you must supply a figure. Which named firms require a vesting statement or grant letter as evidence is not established publicly, so treat it as likely and come prepared. Have the statement ready to share. It costs nothing and removes the recruiter's easiest objection.

Where this goes wrong

Most make-whole losses happen after the number is agreed, in the terms nobody read. Here are the failure modes to check against your own case.

• Counting gross, asking gross. You anchor on the headline RSU number, but the new firm pays cash taxed as ordinary income. Unless you ask for an after-tax make-whole, you take a quiet pay cut. Compute net on both sides before the ask.
• Treating vested options as safe. "I'll exercise later" ignores the 90-day window and IRC 422. ISO value quietly expires or converts to NSO. Check the exact window language, not the printed expiration.
• Assuming the pending bonus is pro-rated. "I worked 11 months, I'll get 11/12" is wrong when the plan requires active employment on the payment date. That clause can zero the whole bonus. Read the payment-eligibility sentence.
• Winning a make-whole that re-traps you. The sign-on carries its own clawback. Gilead repays the first installment if you leave inside a year. Celebrating the number without reading the repayment trigger is how candidates lose later.
• Over-discounting yourself. Accepting 0.7x because "that's what pharma does" when a tight market supports 0.9x to 1x. The discount is the employer's risk hedge, not a law. Counter it.
• Ignoring gross-repayment asymmetry. If you must repay a clawback, you repay the gross even though you only netted roughly 63 to 78 percent. Check whether the clause lets you repay net or offers tax-adjusted forgiveness.
• Over-anchoring on far-dated vests. Counting year-three and year-four Amazon tranches at full face overstates forgone pay. Date every tranche and discount accordingly.

The clawback math is worth doing explicitly. The standard pro-rata repayment formula is repayment = total bonus x months remaining / total commitment months. A 30,000 dollar bonus over 24 months with 16 months worked owes 10,000 dollars, not 30,000. A cliff clause owes the full amount at any point inside the term. That difference, pro-rated versus cliff, is the single most valuable term to win.

Jurisdiction can help you. California AB 692, effective January 1, 2026, caps stay-or-pay retention at a two-year maximum, bars interest, mandates pro-rated repayment, and requires a five-business-day attorney review. If you are covered, some of the worst clawback structures are already off the table. Confirm whether your offer's governing law is one that limits these terms.

The population this problem applies to

This is a large, equity-heavy pool, which is why the make-whole is a routine negotiation rather than an exotic one. In Refolk's index of professional profiles, the United States returns 352,475 software engineers against 43,825 in the UK, with top current employers including Google, Microsoft, and Figma. That is the population most exposed to golden handcuffs.

The practical point of that scale: the recruiters approving these awards do it often, and there are advisors who pressure-test these numbers for a living. Use both. Find the equity-comp planner before your ask, and find people who have already made the trade you are weighing.

Keeping the work current

Two inputs move under you, so re-check them before every offer. First, the AMT exemption and the governing-law landscape change on a calendar. The 2026 AMT exemption figures and California AB 692's effective date are the current reference points, but confirm the live numbers and whether your jurisdiction has added stay-or-pay limits before you model an ISO exercise or a clawback. Describe the mechanism to yourself each time rather than trusting last year's figure.

Second, your own statement changes every vesting date. The twelve-month anchor you computed in October is a different number in January. Re-pull the vesting statement the week you open negotiations, re-date every tranche, and recompute the near-term figure. The discipline that makes this defensible is not the formula, it is the freshness of the inputs.

Run the eight steps once with your real statement open and you will have a number you can defend line by line, an ask the recruiter can approve without a fight, and a clause that will not quietly re-trap you a year in. That is the whole job.