The Make-Whole Sign-On Ask, From Forfeited Pay to a Signed Number

You are leaving unvested equity and a pending bonus on the table to take a new offer, and you need to turn that loss into a number the new employer will actually sign. This guide is for a candidate holding or expecting an offer who wants to price the whole forfeiture stack, convert it to a defensible sign-on figure net of tax and clawback, and send a scripted counter to the right person at the right time. It treats the make-whole sign-on as its own procedure, separate from general offer negotiation: a line-by-line forfeiture tally, a conversion method, and a send sequence.

Most pages tell you forfeited equity is a good justification and stop there. They never show you how to price the stack, adjust it for withholding and clawback, or stage the ask. That gap is where candidates lose real money, and it is what this document closes.

What is a make-whole sign-on, and when is it the right lever?

A make-whole sign-on is a one-time payment the new employer offers to offset the vested-in-the-future compensation you forfeit by leaving your current job. It is the right lever precisely when base pay is capped, because sign-on money sits outside the recurring payroll band and does not ripple into anyone else's pay equity.

Base salary lives in tight internal bands. An above-band request routes to a comp committee and forces the recruiter to reason about pay equity across the whole team, which is why recruiters often genuinely cannot move base. A sign-on is a one-time cost that does not touch headcount modeling or anyone's grade, so it clears approval far more easily. That flexibility is a budget artifact, not goodwill, and it is the reason the make-whole sign-on is your highest-hit-rate move when the recruiter tells you base is fixed.

The scale of who this affects is concentrated where RSUs dominate. In Refolk's index, the US holds 347,237 profiles carrying "Software Engineer" as their current title against 42,993 in the UK, and both samples cluster in employers like Google, Microsoft, and JPMorganChase - exactly the RSU-heavy payers where forfeiture stacks run largest. If you are one of them, the forfeiture is not a rounding error, and neither is getting the ask wrong.

Which forfeited items legitimately count, and how do I quantify each?

The defensible forfeiture stack is: unvested RSUs or options, an unpaid annual or quarterly bonus, unvested deferred compensation, unvested retention grants, and any tuition or relocation clawback you would trigger by leaving. Every one of these is quantified from documents you already hold, not from memory or estimate.

Pull each source document and read the specific fields:

• Unvested RSUs and options. From every grant letter, list the shares still unvested and the next vest date, then value them at the current share price. Executives and managers typically forfeit all unvested grants, and the retention value scales with grant size and remaining vesting length.
• Pending cash bonus. From the bonus plan document, take the amount you would lose, pro-rated if the plan pays for partial-year service.
• Unvested deferred and retention comp. From your 401(k) or deferred-comp statement, separate the vested balance from the unvested. Only the unvested portion counts. Multi-year retention or hiring bonuses that vest over two years are treated as deferred comp under IRC 409A.
• Clawback you would trigger. From any relocation or tuition agreement, note the repayment you owe on exit. That is real money out the door and belongs in the tally.

Do not count non-forfeitable items. Vested equity, your own 401(k) deferrals, and already-paid bonuses are yours regardless of leaving, and including them weakens your case the moment a recruiter checks. Confirm the unvested label against the plan document, not your assumption.

When you present this, frame it as one number, not a spreadsheet. Practitioners say "approximately $85K in equity that vests in March," not a line-by-line disclosure. You keep the detail in your own file to defend the figure if pressed, but you lead with a single total.

How much of the sign-on does tax take, and what does a gross-up change?

A sign-on bonus is a supplemental wage, withheld at a flat 22 percent federal rate up to $1M and 37 percent above it. Add Social Security at 6.2 percent up to a $184,500 wage base, Medicare at 1.45 percent with no cap, and state supplemental withholding, and roughly 30 to 40 percent disappears before the money reaches your account.

That drag is the single most common pricing error. If you match your forfeiture gross for gross, you systematically under-ask, because the vest you lost and the sign-on you gained are both taxed but you only replaced the pre-tax figure. The fix is to anchor on the net you are replacing. If a vest would have netted you $60K on an $85K gross, size the sign-on to net $60K, which means asking for a larger gross to survive withholding.

State withholding is where the drag varies most. The table below shows the combined income-tax withholding a sign-on faces before FICA, by state.

The combined column is federal plus state and excludes FICA, so add 6.2 percent and 1.45 percent on top to reach the real drag. A New Jersey candidate loses more than a third of the gross to income-tax withholding alone before Social Security and Medicare, while a Texas candidate keeps the full base rate. Model your own number with a flat-bonus calculator so you are asking for the gross that produces your target net.

A gross-up request asks the employer to pay the tax on the bonus so your net equals the target. It exists in real agreements - one filed payback agreement covers the bonus plus a tax gross-up - but it is not standard for non-executives. Treat the gross-up as an upside ask you raise after the net-anchored number is on the table, not as your opening position.

What do standard clawback terms do to the value of the number?

Most sign-on bonuses carry a clawback: leave within a set period, commonly 12 or 24 months, and repay all or a pro-rata share. Until that period lapses, a sign-on is contingent money, not money you own, and a punitive term can make a large headline number worth zero.

The structures you will see are full repayment, straight pro-rata, cliff expiration, and tiered reduction. The difference between them is enormous at the moment you might actually leave. Here is what each costs on a $40,000 bonus with a 24-month term.

The month-23 pro-rata figure is derived from the same 1/24-per-month formula. Under a straight pro-rata term you owe almost nothing near the end, while under full repayment or an unexpired cliff you owe the entire amount right up to the deadline. That is the difference between a make-whole that survives an early exit and one that inverts into a liability.

The inversion is sharper than it looks, because a clawback usually demands the gross back even though only the net reached you. Recovering the tax you already paid is a separate claim-of-right adjustment, and it is harder across a year boundary. So an early exit can cost you more than you actually kept. This is the failure that celebrating a big number hides.

Your term asks, in priority order, are prorated rather than full repayment, and a 12-month rather than 24-month period. If you are in California, note that AB 692, effective January 1, 2026, caps sign-on retention at a two-year date, bars interest, mandates prorated repayment, and requires a separate agreement with a five-business-day attorney-review window. Where it applies, some of your asks are now floors set by law rather than concessions you have to win.

A sign-on is contingent money until the clawback lapses. Read the separate agreement, not just the offer letter.

Run the make-whole procedure end to end

The procedure below takes you from a drawer full of grant letters to a signed number. Steps one through four are homework you do before any conversation. Steps five through nine are the negotiation itself.

Once you have run the tally and want to understand how your counterpart thinks about it, look at the people who price these buyouts every day. Refolk writes your resume from your own history, tailors it to each posting, and scores how well you fit, and its people search lets you find the exact counterparties who route above-band asks.

When do I ask, of whom, and how do I move base versus sign-on?

Ask after you have an offer, verbal or written, and never during interviews. Counter to the recruiter who made the offer, not the hiring manager, because the recruiter is the one who works with the comp team.

The written-versus-verbal timing is genuinely contested. The consistent guidance is to hold until a written offer exists, before you accept. But some practitioners argue the verbal-offer window is peak leverage, because it lets the recruiter update the internal offer packet once and avoid a re-approval loop in applicant systems. Once an offer is generated in that software, a change forces a declination and re-approval cycle, so asking before the paperwork is mechanically cheaper for the recruiter to grant. Both positions are defensible; the mechanism, not a rule, is what should guide you.

On budget, the rules of thumb are worth memorizing:

• A sign-on typically runs 5 to 10 percent of base, and anything above roughly 15 percent usually needs executive approval.
• One recruiter's rule is to ask $2 to $3 in sign-on for every $1 you concede on base.
• Mid-career professionals typically land $5,000 to $15,000, though senior and time-sensitive roles clear far more.

The matrix below tells you which lever to pull based on where your base sits and how large your forfeiture is.

Here is a counter you can adapt. It states the forfeiture as one number, names the figure, and ties it to closing the gap.

Hi [Recruiter name],

Thank you for the offer - I am excited about the role and the team.

To make this move, I am leaving behind approximately [$85K] in unvested equity that vests in [March] plus a pending [annual] bonus. After tax, that is roughly [$60K] I would forfeit by starting now.

To close that gap, I would like a one-time sign-on bonus of [$82K], structured to net approximately [$60K] after withholding. I understand base sits in a band, so I am raising this as a one-time item rather than a base change.

I would also like to confirm the sign-on is paid within [30 days] of my start date, and that any repayment term is prorated over no more than [12 months].

Happy to talk it through. Thank you for working with me on this.

[Your name]

How does this go wrong, and how do I catch each failure?

The make-whole sign-on fails in predictable ways, and most failures are invisible until it is too late to fix them. Here is each one, what it looks like, and the check that catches it.

• Pricing the gross, asking the gross. You match your forfeited face value and net far less after 30 to 40 percent withholding. Check: convert every forfeited item to after-tax before setting the number.
• Ignoring the clawback, so the win is contingent. A $40K sign-on with a 24-month full-repayment cliff is worth $0 if you leave at month 23. The false positive is celebrating a big number while the term is punitive. Check: read the separate bonus agreement, not just the offer letter.
• The paying-after-one-year trap. A sign-on matched to your RSUs but paid only at the one-year mark does not bridge the Year-1 cash gap you were solving. Check: confirm payment timing in writing before you sign.
• Counting non-forfeitable items. Vested equity, your own 401(k) deferrals, and already-paid bonuses are not forfeited, and including them weakens your case. Check: list only items your grant or plan docs mark unvested.
• Asking too early or of the wrong person. Raising it in interviews or routing to a hiring manager who cannot touch comp stalls the ask. Check: offer first, counter to the recruiter.
• Treating a stall as a no. "Let me check with the hiring manager" is a stall testing whether you are anchored. The false positive is folding to the original number. Check: restate your number and redirect to the package of sign-on, year-1 equity, and start date.
• Relying on verbal promises. Refresh grants and side assurances are unenforceable unless documented. Check: get amount, timing, term, and gross-up in the letter or a side letter.
• Resigning before money lands. Giving notice before forfeitable equity or bonus hits your account forfeits it needlessly. Check: sequence your resignation after the vest or payout where possible.

One more note on proof. Whether a recruiter can demand documentation of your forfeited amount is contested by candidates, and many decline to hand over grant letters. Stating a defensible total is not dishonesty. Keep the detail in your own file, present one number, and describe the components if pressed without surrendering the documents.

Verify before you sign, and keep the number current

Before you call this done, confirm the make-whole survives contact with the real agreement. A large headline number with a punitive term or a delayed payout is worse than a smaller one that lands clean, so check every item below against the signed paper, not the verbal offer.

Keep the number current as conditions move. Your forfeiture tally is only as good as the share price and vest dates behind it, so refresh the RSU value if the offer negotiation runs long or the market moves. If you relocate, re-run the withholding drag for the new state, because the difference between Texas and New Jersey is more than a third of your gross. And if California AB 692 or a similar statute applies to your offer, treat prorated repayment and the attorney-review window as legal floors rather than concessions you have to win.

The make-whole sign-on is not a favor you are asking. It is the price of the compensation the new employer is asking you to leave behind, converted into a form their budget can approve. Price it precisely, adjust it for the tax and the clawback that will otherwise quietly erase it, and send it to the one person who can move it. Then get it in writing before you resign a thing.