If you work in finance, fintech, or financial technology and were just laid off in California, you are probably staring at a severance agreement and wondering what happens next. Questions about bonuses, RSUs, and equity come up immediately, especially when your employer tells you those forms of compensation are forfeited at termination. This is exactly where negotiating severance for California finance and fintech employees becomes critical, because what your employer says is often not the full story under California law.
In California, bonuses, RSUs, and stock options are evaluated based on how they were earned, how they were structured, and whether your employer is asking you to sign a severance agreement that releases legal claims. When severance is involved, these issues are not just compensation questions. They are negotiation issues that can directly affect how much value you walk away with after termination.
I’m Matt Ruggles, and I’ve been practicing employment law in California for more than 30 years. A significant part of my practice involves negotiating severance agreements for employees in the finance, technology, and fintech industries, where compensation often includes performance bonuses, incentive pay, RSUs, and equity.
I wrote this guide to address the most common questions and concerns I hear after a layoff, and to explain how California law, severance negotiations, and leverage intersect when bonuses and equity are suddenly at risk.
If you work in finance or fintech and have received a severance agreement in California, do not sign it without understanding what happens to your bonus, RSUs, or equity. These issues are often mischaracterized at termination, and once you sign, your leverage is usually gone. If you want a clear assessment of your severance options before you commit, call me at the Ruggles Law Firm at (916) 758-8058.
The “Discretionary” Bonus Trap
In finance and fintech, the word “discretionary” is one of the most overused and misunderstood terms in compensation plans. Employers routinely rely on that label to suggest they have absolute control over whether a bonus is paid, even when an employee has met every performance expectation tied to that bonus.
In practice, California law does not allow employers to escape payment obligations simply by calling a bonus “discretionary.” What matters is not the label used in the plan, but whether the bonus was actually tied to measurable work that the employee performed before termination.
Why Employers Call Bonuses “Discretionary”
Employers often describe bonuses as discretionary for one reason. It gives them flexibility after termination.
In finance and fintech layoffs, bonuses are frequently denied based on timing rather than performance. Employers rely on plan language to argue that no payment is required once employment ends, even if the employee helped generate the revenue, close the deal, or hit the metric that the bonus was designed to reward.
This approach is especially common when layoffs occur near the end of a performance cycle or shortly before bonus payout dates. The goal is not accuracy. The goal is leverage.
California Courts Look at Substance, Not Labels
California courts do not automatically accept an employer’s characterization of a bonus as discretionary. Instead, courts examine how the bonus actually works in practice.
If a bonus is tied to objective criteria such as revenue targets, transaction volume, assets under management, deal closings, or client retention, it may be treated as earned compensation once those criteria are met. In that situation, the bonus can qualify as wages that must be paid, even if the employer claims discretion over timing or approval.
This principle comes up repeatedly in finance, fintech, and sales-driven roles where bonuses are presented as optional but are routinely paid when defined benchmarks are reached.
Documentation Can Turn a “Discretionary” Bonus into Earned Wages
Documentation is often the deciding factor in these disputes.
Offer letters, bonus plans, internal compensation policies, historical payout data, and even past emails can show that bonuses are consistently paid when certain conditions are met. That pattern matters. If bonuses are paid regularly based on performance, the employer’s claim of total discretion becomes much harder to defend under California law.
This is why discretionary bonus disputes are frequently resolved during severance negotiations rather than litigation. Once an employer sees that the facts undermine its position, the leverage shifts.
How Discretionary Bonus Issues Play Into Severance Negotiations
When an employer asks you to sign a severance agreement, it is also asking you to release potential wage claims. That release has value.
Even when a bonus plan contains discretionary language, employers will often agree to pay some or all of a disputed bonus as part of a severance package to secure a clean exit and avoid future disputes. In finance and fintech cases, discretionary bonus arguments are often strongest when combined with other leverage points, including timing, equity forfeiture, and performance documentation.
This is why discretionary bonuses should never be analyzed in isolation when severance is on the table.
Matt’s Advice: Do not accept the word “discretionary” at face value. If your bonus was tied to measurable results you helped deliver, it may be earned under California law and negotiable as part of your severance.
If you’ve been laid off and are staring at a severance agreement, read my blog California Severance Negotiation After Layoffs: What to Know Before You Sign.
Pro-Rata Bonuses: Partial Year, Full Effort
In finance and fintech, it is common for employees to be terminated mid-year, often after months of work that directly contributed to company performance. Employers frequently rely on timing to deny bonus payments altogether, arguing that the performance period was not complete or that the payout date had not yet arrived.
California law does not automatically support that position. When an employee’s work during the year materially contributed to measurable results, the bonus may be considered partially earned, even if the employer ended the relationship before the formal payout date.
Termination Timing Does Not Automatically Erase Earned Value
Employers often frame mid-year terminations as a clean cutoff. From the employer’s perspective, no payout date means no obligation.
That framing ignores how many finance and fintech bonuses actually work. Bonuses are often tied to ongoing performance metrics such as revenue growth, transaction volume, portfolio performance, or project completion. When those results are achieved gradually over time, the bonus can accrue as the work is performed.
If your efforts helped generate results during the bonus period, California law may recognize that value even if you were terminated before year-end.
Pro-Rata Entitlement Depends on the Bonus Plan and the Facts
There is no automatic rule requiring pro-rata bonuses in every case. The analysis depends on the language of the bonus plan and how it has been applied in practice.
If a plan clearly states that no pro-rata payment will be made under any circumstances, that language matters. But many plans are silent on pro-rata payments or use vague language that does not clearly foreclose partial payouts.
In those situations, employees can argue that the bonus was earned incrementally and that the employer should not be allowed to withhold payment simply by controlling the termination date.
Layoffs and “No Cause” Terminations Strengthen Pro-Rata Arguments
The reason for termination is often critical.
When employees are laid off or terminated without cause, courts and employers alike are more receptive to pro-rata bonus claims. In contrast, employers are more likely to resist bonus payments when termination is tied to alleged misconduct.
In finance and fintech layoffs, where terminations are driven by restructuring, market conditions, or strategic shifts, pro-rata bonus arguments are often strongest. Employers know these cases carry more risk and are more likely to resolve them through severance negotiations.
Pro-Rata Bonuses Are Commonly Resolved Through Severance Negotiation
Even when a bonus plan does not expressly provide for pro-rata payments, employers frequently agree to them as part of a severance package.
A severance agreement typically requires a broad release of claims. If your work during the year supports a credible argument that the bonus was partially earned, that claim has settlement value. Employers often prefer to pay a prorated bonus rather than risk a wage dispute or prolonged negotiation.
This is especially true in finance and fintech roles where bonus amounts can be significant and disputes can escalate quickly.
Matt’s Advice: If you did the work that produced results, do not let the calendar erase your compensation. Pro-rata bonuses are often negotiable, especially in no-cause terminations.
If you are unsure whether it makes sense to push for a prorated bonus in your severance negotiations, read my blog: Should I Attempt to Negotiate My Severance Offer? for guidance on when negotiation is likely to be worth it.
“You Must Be Employed on Bonus Day” Clauses
Many finance and fintech bonus plans contain “active employment” clauses requiring employees to still be employed on the official bonus payout date to receive payment. These provisions are common in banking, investment management, and fintech compensation structures, and employers often treat them as absolute.
At first glance, these clauses appear airtight. In practice, especially under California law, they are not always dispositive. How the bonus was earned, why the employee was terminated, and what the employer is asking for in a severance agreement can significantly affect whether these clauses are enforced.
Active Employment Clauses Are Not Automatically Enforceable
California courts have, in some cases, enforced bonus-day employment requirements. But enforcement is not automatic, and context matters.
Courts look closely at whether the bonus was designed to reward future loyalty or past performance. When a bonus is tied to work already performed, revenue already generated, or objectives already achieved, denying payment solely because employment ended before an arbitrary payout date can conflict with California’s wage protections.
The more a bonus resembles compensation for completed work, the weaker an employer’s reliance on a bonus-day clause becomes.
Involuntary Terminations Change the Analysis
The reason for termination plays a critical role.
When an employee voluntarily resigns before a bonus payout date, employers have a stronger argument for enforcing active employment clauses. When the termination is involuntary, such as a layoff, restructuring, or reduction in force, the equities shift.
California law is generally hostile to employers using timing mechanisms to avoid paying compensation tied to completed work. If the employer chose the termination date, courts and negotiators alike are more skeptical of claims that the employee simply “missed” bonus day.
Timing Cannot Be Used as a Pretext to Avoid Payment
Employers sometimes schedule layoffs or terminations shortly before bonus payout dates. When that happens, bonus-day clauses can look less like neutral contract terms and more like tools to avoid compensation obligations.
If your work directly contributed to the bonus results, denying payment solely because you were not employed on a single calendar date may be viewed as unfair or inconsistent with California wage law principles. That risk is often enough to bring employers to the negotiating table.
Bonus-Day Clauses Are Often Negotiated Away in Severance Agreements
Even when a bonus plan technically excludes payment unless you are employed on bonus day, employers frequently agree to partial or full payouts during severance negotiations.
A severance agreement requires a release of claims. If enforcing a bonus-day clause creates potential exposure or uncertainty, employers may decide that paying the bonus is the cleaner and safer outcome. In finance and fintech cases, where bonuses can be substantial, these clauses are regularly softened or bypassed through negotiation.
Matt’s Advice: Bonus-day rules are not always fair or final. When severance is on the table, negotiation often matters more than rigid plan language.
If you want to learn how to push for a better severance outcome, read my post: How to Maximize Your Severance Offer in California.
Performance vs. Retention Bonuses
Not all bonuses are created for the same purpose, and in finance and fintech severance cases, that distinction often determines whether compensation survives termination. Understanding why a bonus was offered is just as important as understanding how much it was worth.
Employers frequently describe all incentive pay the same way after termination. California law does not. The difference between performance-based compensation and retention-based compensation can determine whether a bonus is considered earned, forfeited, or negotiable during severance talks.
Performance Bonuses Reward Completed Work
Performance bonuses are designed to reward achievement. In finance and fintech roles, they are commonly tied to individual or company results such as closing deals, hitting revenue targets, growing assets under management, completing product milestones, or meeting defined operational metrics.
When those objectives are met before termination, the bonus may be considered earned under California law. The fact that payment was scheduled for a later date does not automatically defeat entitlement if the work that triggered the bonus was already completed.
This is why performance bonuses are often treated as earned compensation rather than optional incentives once the underlying results exist.
Retention Bonuses Are Tied to Continued Employment
Retention bonuses serve a different purpose. They are designed to encourage employees to remain employed through a specific date or event, such as a merger, acquisition, system conversion, IPO, or regulatory milestone.
If a retention bonus is clearly conditioned on continued employment through a stated date, and that condition is not met, employers often have a stronger argument for denying payment. However, that argument weakens when termination is involuntary and unrelated to performance.
In layoffs or restructurings, employees can often argue that the employer cannot benefit from the employee’s continued service and then terminate the employee to avoid paying the retention incentive.
Mixed Bonus Structures Require Careful Analysis
Many finance and fintech compensation plans blend performance and retention concepts. A bonus may require both achievement of performance metrics and continued employment through a payout date.
These hybrid structures are fertile ground for disputes. Even if the retention component fails, the performance component may still be enforceable. In those cases, employees may have a right to all or part of the bonus based on completed work.
Separating these components is often critical during severance negotiations and can significantly change the value of a severance package.
Why Bonus Classification Matters in Severance Negotiations
Employers often lump all bonuses together when presenting severance offers. That approach benefits the employer, not the employee.
When bonuses are correctly classified, employees can identify which portions are strongest under California law and which portions are most negotiable. Performance-based bonuses often carry more leverage than retention bonuses, particularly when combined with a release of claims in a severance agreement.
Matt’s Advice: Always ask why the bonus was offered in the first place. Whether it rewarded performance or required retention often determines whether it survives termination.
If you’re considering a planned exit from a leadership role, read my guide: Negotiated Exits for Executives in California.
By now, you can see why bonuses and equity are often the most valuable and most disputed parts of a finance or fintech severance. If you want help evaluating your severance agreement and determining whether negotiation makes sense before you sign, call me at the Ruggles Law Firm at (916) 758-8058 to discuss your situation.
Equity Vesting at Termination
Equity compensation, including stock options and RSUs, often represents a significant portion of total pay in finance and fintech roles. Many employees are surprised to learn that unvested equity typically stops vesting the moment employment ends.
That outcome is common, but it is not always final. The treatment of equity at termination depends on the specific terms of the equity agreement, the reason for termination, and whether severance negotiations create an opportunity to preserve or recover some of that value.
Vesting Usually Stops at Termination, but Exceptions Exist
Most equity plans are structured so that vesting ends on the employee’s final day of employment. Employers often present this as automatic and unavoidable.
However, some equity agreements include acceleration provisions triggered by specific events, such as layoffs, mergers, acquisitions, or terminations without cause. In those situations, unvested equity may vest immediately or on an accelerated schedule, despite termination.
These provisions are often overlooked because they are buried in equity plan documents rather than highlighted in offer letters or severance paperwork.
Cause Versus No Cause Makes a Material Difference
The classification of your termination is critical.
Terminations labeled “for cause” frequently result in forfeiture of unvested equity. Under California law, however, a for-cause designation requires good faith and actual misconduct, not dissatisfaction with performance or a business restructuring.
Layoffs, reductions in force, and reorganizations are typically considered terminations without cause. In those cases, equity forfeiture arguments are often weaker, and employees may have stronger grounds to negotiate vesting or compensation tied to forfeited equity.
Equity Is Often Addressed in Severance Negotiations
Even when equity plans do not mandate acceleration, employers sometimes agree to equity-related concessions as part of a severance agreement. These may include extending vesting periods, lengthening post-termination exercise windows, or providing cash compensation in lieu of forfeited equity.
This is especially common for senior employees or high-value contributors whose equity represents a meaningful portion of their overall compensation. When an employer seeks a broad release of claims, equity issues often become negotiable.
Matt’s Advice: Equity often stops vesting when employment ends, but that does not mean the discussion is over. In the right circumstances, severance negotiations can restart the clock.
If you want to understand how equity is commonly negotiated as part of severance agreements, read my guide: How to Negotiate Executive Severance Agreement Terms.
RSUs and the “Golden Handcuffs” Problem
Restricted Stock Units, or RSUs, are a central part of compensation in finance and fintech roles, particularly at growth-stage companies and publicly traded firms. They are intended to reward long-term contribution and align employee incentives with company performance. In practice, they often function as golden handcuffs that lock employees into staying put far longer than they otherwise would.
When termination occurs, the result can feel abrupt and punitive. In most cases, unvested RSUs stop vesting immediately, wiping out compensation that may represent a substantial portion of total pay. That outcome is common, but it is not always the final word.
RSUs Typically Forfeit When Employment Ends
Most RSU plans are structured so that vesting is conditioned on continued employment through specific vesting dates. If you are not employed on the vesting date, the unvested RSUs are forfeited.
Employers often present this result as automatic and non-negotiable. While forfeiture is standard under plan terms, California severance negotiations often look beyond what is typical and focus instead on leverage, fairness, and risk allocation when employment ends involuntarily.
If your employer insists that your severance offer is non-negotiable because your bonus was discretionary, read my blog: Non-Negotiable Severance in California: 5 Myths Dispelled By a Lawyer to understand why that claim is often wrong.
Acceleration and “Double-Trigger” Clauses Can Change the Outcome
Some finance and fintech equity plans include acceleration provisions that alter what happens at termination. These clauses may provide for partial or full acceleration of RSUs if certain conditions are met.
A common example is a double-trigger clause, which requires both a change in control, such as a merger or acquisition, and a termination without cause. When both triggers occur, unvested RSUs may vest automatically or on an accelerated schedule.
These provisions are often overlooked by employees because they are buried in equity plan documents rather than highlighted in offer letters or severance paperwork.
Grant Agreements and Equity Plans Matter More Than Offer Letters
Offer letters rarely tell the full story about RSUs. The controlling terms are almost always found in the RSU grant agreement and the underlying equity incentive plan.
Those documents may address acceleration, extended vesting periods, post-termination exercise windows, or discretionary authority retained by the board or compensation committee. In severance negotiations, these provisions can create leverage even when the employer initially claims that all equity is forfeited.
Careful review of the full equity documentation is essential before accepting an employer’s position at face value.
RSUs Are Often Negotiated as Part of Severance Agreements
In finance and fintech severance cases, RSUs are frequently negotiated alongside cash severance, bonuses, and other benefits. Employers may agree to accelerate vesting, extend vesting periods, or provide cash equivalents for forfeited RSUs in exchange for a comprehensive release of claims.
This is especially common where RSUs represent a meaningful portion of total compensation and where termination was part of a broader layoff or restructuring rather than a performance-based discharge.
Matt’s Advice: RSUs are designed to reward long-term contribution, not punish involuntary termination. Do not let plan language alone dictate the outcome without exploring whether acceleration or negotiation is possible.
If you want a deeper breakdown of how RSUs are treated after termination in California, read my blog: What Happens to RSUs After a Layoff in California.
Negotiating Equity and Bonus Together
One of the most common mistakes finance and fintech employees make during severance negotiations is treating bonuses and equity as separate issues. Employers benefit from that separation. Employees rarely do.
In reality, your base salary, bonuses, and equity are all components of a single compensation package that reflects the value you delivered to the company. When severance negotiations begin, those components should be analyzed and negotiated together, not in isolation.
Compensation Should Be Viewed as One Unified Picture
Employers often compartmentalize compensation when presenting severance offers. Base pay is framed as severance. Bonuses are dismissed as discretionary. Equity is described as forfeited under plan terms.
That framing understates your leverage. Bonuses and equity are often where the largest value exists, especially in finance and fintech roles. When these components are separated, employers can concede a small amount in one area while quietly avoiding meaningful exposure in another.
A unified compensation analysis reframes the conversation around total earned value rather than individual line items.
The Release of Claims Is the Core Leverage Point
A severance agreement is not just about pay. It is about risk management for the employer.
When a company asks you to sign a broad release of claims, it is seeking certainty and finality. That release has value, particularly when there are credible disputes over bonuses, equity forfeiture, or wage classification issues. Conditioning that release on fair treatment of both cash compensation and equity is often the most effective negotiation strategy available.
Employers may resist negotiating individual components, but they often respond when the conversation shifts to resolving all compensation issues in one comprehensive agreement.
Bonus and Equity Issues Often Interact Legally
In finance and fintech severance cases, bonus and equity disputes frequently overlap with wage law, contract interpretation, and company compensation practices.
For example, a bonus dispute may strengthen an equity negotiation by increasing the employer’s incentive to resolve all issues at once. Likewise, equity forfeiture concerns can raise questions about timing, termination classification, or internal policy enforcement that affect bonus entitlement.
Understanding how these pieces interact is essential to maximizing leverage and avoiding concessions that reduce overall value.
Industry-Specific Experience Matters in These Negotiations
Finance and fintech compensation structures are more complex than standard employment arrangements. Negotiating them effectively requires familiarity with incentive plans, equity documentation, payout timing, and California employment law principles governing earned compensation.
A lawyer who understands both employment law and finance-sector compensation can identify pressure points that are often missed by general practitioners or employees negotiating on their own.
Matt’s Advice: Do not negotiate your severance in pieces. Your pay, bonus, and equity tell one story. That story is your value, and it should be negotiated as a whole.
If you want to understand how employment lawyers structure severance negotiations to maximize overall outcomes, read my guide: How to Negotiate Severance Like an Employment Lawyer.
Why Finance and Fintech Severance Is Different
While many California employees face severance issues, finance and fintech compensation structures create disputes that are more complex and higher stakes. Bonuses and equity are not fringe benefits in these industries. They are often the core of total compensation, which makes termination timing and severance negotiations far more consequential.
Understanding how these dynamics work can be the difference between accepting a modest severance or recovering the value of compensation already earned.
Performance-Based Pay Blurs the Line Between Bonuses and Wages
In finance and fintech roles, bonuses are often tied directly to measurable results. That structure blurs the legal line between discretionary incentives and earned wages. When performance drives compensation, California law leaves room to argue that bonuses were earned even if payment was scheduled for a later date.
Equity Often Represents the Largest Financial Loss
For many fintech employees, RSUs and stock options can represent a significant portion of total pay. Termination can wipe out substantial unvested equity in a single day, sometimes amounting to six or seven figures. That reality makes equity treatment one of the most important issues in severance negotiations.
Timing Is Rarely Accidental
Layoffs and restructurings often occur shortly before bonus payouts or vesting dates. When employers control termination timing, employees should not assume forfeiture is automatic. Understanding how and when compensation accrued can materially strengthen severance leverage.
Post-Employment Restrictions Are Often Overstated
Some employers attempt to condition bonus or equity payments on non-compete or post-employment restrictions. In California, most non-compete agreements are unenforceable under Business and Professions Code section 16600. That legal reality can undercut an employer’s leverage and create negotiation opportunities.
Understanding these industry-specific factors helps finance and fintech employees evaluate severance offers more accurately and avoid walking away from compensation they may have already earned.
Using Severance Negotiation to Recover Bonus and Equity
Many employers tell finance and fintech employees that bonuses and unvested equity are simply “not owed” after termination. That statement is often designed to shut down discussion, not reflect the full legal or negotiation reality.
In practice, companies frequently pay more when employees approach severance strategically. Bonus and equity disputes are commonly resolved through negotiation, especially when the employer wants a clean exit and a broad release of claims.
Strong Documentation Creates Leverage
Severance negotiations are driven by facts. Performance reviews, sales numbers, deal closings, revenue metrics, and internal recognition can all demonstrate that compensation was earned, even if payment had not yet occurred.
The clearer the connection between your work and the company’s results, the harder it becomes for an employer to dismiss bonus or equity claims outright.
Contracts and Plan Documents Control the Analysis
Offer letters rarely tell the whole story. Bonus plans, equity grant agreements, and underlying incentive plans often contain terms that affect entitlement, vesting, or acceleration.
Before accepting an employer’s position, it is critical to review all relevant documents. Small details in these agreements often create negotiation leverage that is not apparent from the severance offer alone.
California Wage Law Can Change the Conversation
California law requires employers to pay earned wages. In some cases, a bonus tied to completed performance can qualify as earned compensation, even if the employer disputes payment.
When that possibility exists, the dispute shifts from a discretionary issue to a wage exposure issue. That shift often motivates employers to negotiate rather than escalate.
FEHA Claims Can Significantly Increase Severance Leverage
In finance and fintech severance negotiations, leverage is not limited to wage issues. Potential claims under California’s Fair Employment and Housing Act (FEHA) often play a critical role, even when the employer insists the termination was purely economic.
The FEHA covers a wide range of protected activities and characteristics, including age, disability, medical leave, pregnancy, gender, race, national origin, and retaliation for reporting concerns or requesting accommodations. When a termination follows performance disputes, restructuring, or layoffs that disproportionately affect protected employees, FEHA exposure can quickly become part of the severance calculus.
Employers understand the risk. FEHA claims carry the possibility of emotional distress damages, attorneys’ fees, and jury trials. As a result, companies are often far more willing to negotiate severance terms, including bonuses and equity, when credible FEHA issues exist alongside compensation disputes.
This does not mean every severance case involves a FEHA claim. It does mean that when the facts raise FEHA concerns, those issues materially increase the value of the release the employer is asking you to sign. That leverage can translate into improved severance pay, bonus resolution, or equity concessions.
Matt’s Advice: Severance negotiations are about risk. When FEHA exposure exists, the risk profile changes, and so does the employer’s willingness to negotiate.
If you’re curious why wrongful termination lawsuits under the FEHA often backfire on employers, read my blog Wrongful Termination Lawsuits Under the FEHA: A Costly Gamble for Employers.
Negotiation Is Often More Effective Than Immediate Litigation
Most employers prefer to resolve bonus and equity disputes quietly through severance negotiations rather than risk legal claims. A well-timed negotiation or demand letter can secure meaningful compensation without court involvement.
Litigation may remain an option, but it is often unnecessary when leverage is properly identified and used early.
Industry Experience Matters
Finance and fintech compensation structures are complex. Effective severance negotiations require an understanding of incentive pay, equity mechanics, and California employment law.
An attorney familiar with these industries can identify inconsistencies between company policies and the law, and use those gaps to improve severance outcomes.
If you want to understand how leverage is actually applied in severance negotiations, read my article: How To Use Leverage in Severance Negotiation.
Practical Tips for Finance and Fintech Employees
- Do not rush to sign a severance agreement.
Severance agreements often include broad waivers that permanently give up your right to pursue unpaid bonuses, RSUs, or equity. Once signed, those rights are usually gone. - Review the plan documents, not just the offer letter.
Bonus plans, equity grant agreements, and incentive plans often control entitlement and forfeiture. These documents frequently contain terms that are not summarized in your severance paperwork. - Pay close attention to “for cause” designations.
Employers sometimes label terminations as “for cause” to justify denying equity or bonuses. Under California law, that designation requires good faith and actual misconduct, not mere performance disagreements. - Do not assume forfeiture is automatic.
Many bonus and equity disputes resolve favorably once inconsistencies between company policies, past practices, and legal requirements are identified. - Stay strategic rather than emotional.
Losing compensation can feel personal, but successful severance negotiations depend on documentation, leverage, and measured persistence, not frustration or urgency.
Frequently Asked Questions About Finance and Fintech Severance in California
Can finance and fintech employees negotiate severance agreements in California?
Yes. California severance negotiation for finance and fintech employees is common, even when employers initially claim the offer is final. Severance agreements typically involve a release of claims, and that release has value. When bonuses, equity, or wage issues are in play, employers often negotiate to reduce risk and secure a clean exit.
Are bonuses considered earned wages for California finance employees after termination?
Sometimes. In California, a bonus may qualify as earned wages if it is tied to measurable performance and the underlying work was completed before termination. Labels like “discretionary” are not controlling. The analysis depends on how the bonus was structured and how it was paid in practice, which is why bonus disputes frequently arise in finance and fintech severance negotiations.
What happens to RSUs after a layoff in a California fintech company?
In most cases, unvested RSUs stop vesting at termination. However, that is not always the end of the analysis. Some equity plans include acceleration or double-trigger provisions, and RSUs are often negotiated as part of a severance agreement. For California fintech employees, RSUs are frequently one of the most valuable negotiation points.
Do I have to be employed on the bonus payout date to get my bonus in California?
Not always. While many finance and fintech bonus plans include active employment or “bonus day” clauses, California law looks at substance over timing. If the bonus was tied to work already performed and termination was involuntary, those clauses may be negotiable, especially in the context of a severance agreement.
How does California law affect severance negotiations for finance and financial technology workers?
California law provides strong protections for earned compensation and strictly limits post-employment restrictions like non-competes. These laws often give finance and fintech employees more leverage than they realize, particularly when bonuses or equity are tied to performance rather than continued employment alone.
Should I hire a lawyer to negotiate my finance or fintech severance in California?
If your compensation includes bonuses, RSUs, stock options, or other incentive pay, working with a lawyer who understands California severance negotiation in the finance and fintech industries can materially change the outcome. These cases often turn on details in bonus plans, equity documents, and wage law that are easy to miss without industry-specific experience.
If you’re trying to figure out how to choose the right attorney for your case, read my guide How Do I Select a California Employment Lawyer?
Final Thoughts on Finance and Fintech Severance Negotiation
In finance and fintech, bonuses and equity are not side benefits. They are often the most meaningful part of total compensation. California law frequently protects employees from unfair forfeiture of that compensation, particularly when performance can be clearly tied to measurable results. Severance negotiations are where those protections matter most, because employers are asking for a release at the very moment compensation is most vulnerable.
When employees understand how bonuses and equity are evaluated under California law and approach severance strategically, outcomes often change. What is presented as non-negotiable can become flexible. What looks forfeited can become recoverable. Fair severance is not just about weeks of pay. It is about recognizing the value already created and making sure policy language does not erase performance after the fact.
Contact the Ruggles Law Firm at 916-758-8058 to Evaluate Your Potential Lawsuit
Matt Ruggles has a thorough understanding of California employment laws and decades of practical experience litigating employment law claims in California state and federal courts. Using all of his knowledge and experience, Matt and his team can quickly evaluate your potential claim and give you realistic advice on what you can expect if you sue your former employer.
Contact the Ruggles Law Firm at 916-758-8058 for a free, no-obligation evaluation.
Blog posts are not legal advice and are for information purposes only. Contact the Ruggles Law Firm for consideration of your individual circumstances.
