What Is a Sign-On Bonus?

Full Definition

Sign-on bonuses (also called signing bonuses or hiring bonuses) are one-time cash payments given to new hires, separate from base salary and equity. They are commonly used to: (1) offset the bonus or unvested equity the candidate is leaving behind at their current job, (2) make the first-year total compensation competitive when RSU vesting is back-loaded (e.g., Amazon's 5/15/40/40 vesting), (3) close a gap between the candidate's expectation and the company's standard offer band. Sign-on bonuses at FAANG range from $25K-$200K depending on level. Senior+ candidates can negotiate substantially higher sign-ons by showing a competing offer with strong first-year comp or unvested equity at the current company. The sign-on is usually paid in two tranches (50% at hire, 50% at 6-12 months) and is subject to clawback if the candidate leaves within 12-24 months. Negotiation tip: sign-on is usually the most flexible negotiation lever because it costs the company a single year of P&L impact rather than ongoing comp inflation.