Leaving Money on the Table? 5 Negotiating Tips to Ensure You Don’t

Money On The TableYou’ve gone the distance, made it through multiple rounds of interviews, met with peer level executives, perhaps people who will be reporting to you and, depending on your level in the organization, sat down with some board members. This is the time where the rubber meets the road . . . the negotiation.

I’ve worked with hundreds of seasoned executives, many of whom are hardball negotiators when it comes to negotiating on behalf of their companies, but when the deal is about their own compensation, that’s when things really get personal. Surprisingly, I’ve had to encourage some of my clients to counter the offer instead of accepting the initial package, which brings me to the number one rule in negotiation:

1. If you don’t ask, you don’t get. Many of the decision makers I’ve spoken with say they expect an executive to counter the offer, especially if that executive will be representing the company in future deals. The thing to remember is that asking is very different from demanding. It doesn’t hurt to ask for an increased base, incentive or performance bonus, or more vacation time; but when you demand these things, the tone of the negotiation changes. If you ask and the company can’t comply with your requests, the worst case scenario is they say “this is the best we can do, take it or leave it.” However, if you make demands you risk having the offer pulled.

2. Negotiating a compensation package should be an amicable discussion. Remember you’re going down the road with these people. In the future you will be working side by side toward a common goal. The last thing you want to do is to alienate your prospective employer. Again, that doesn’t mean just rolling over and accepting the initial offer. You should always express your enthusiasm for the position and then take some time to study the offer.

3. Get the offer in writing. It’s best to get the offer in writing, especially as they get more complicated with items like bonuses and equity stakes. For most companies, a written offer is standard operating procedure, however, there are companies that prefer to get some sort of verbal commitment before they memorialize the deal. In that case, it’s a good idea to jot down your own notes, ensuring nothing falls through the cracks.

4. Combination verbal and written negotiation. Whether you’re working from an offer memorandum or your own notes, it’s a great technique to develop your own written talking points, email them to the decision maker with whom you’re negotiating and then discuss your requests, either in person or on the phone. Having something in writing gives both parties a foundation from which to work, keeping the negotiation focused and professional.

5. One wish list. Your compensation is a total package. When analyzing the strengths of the offer you need to focus on all of the elements. Your response should be comprehensive, listing each of the items you’d like to improve. This gives the decision maker, who may have more flexibility in some areas than others, room to operate. For instance, if they can’t come up with a higher base, perhaps they can enhance the bonus or equity. Say you ask for and receive some concessions but neglected other items you’d like to improve, going back to the well multiple times could make it appear that you’re not that enthusiastic about the offer and potentially poison the budding relationship.

A successful negotiation can be incredibly enriching with rewards reflected not only in your compensation package but also in intangibles such as the earned esteem and respect of your future employers.





The Best Package of All

Wrapped GiftsIt’s said “good things come in small packages.” But some of the best and most important things come on a piece of paper . . . an offer letter.

What should be in your executive compensation package? Of course there are the three B’s: Base, Bonus and Benefits. But there’s so much more to a package than that. The following are ten items to look for in your next compensation package:

1. Base salary. Before starting your job search determine what kind of base salary you would like to make in this next move. In addition to making your wish list, do some market research to see if your expectations are reasonable.

2. Commission (if applicable). If you’re working on commission, make sure you have a firm grasp on how the company’s commission structure works and whether you can achieve your personal earning goals under the company’s system.

3. Bonuses. Know what the company’s bonus structure is and what’s expected of you to earn your bonuses. Remember to ask about a signing bonus. They’re not quite as common as they used to be, but in some circumstances they can be a beneficial part of a negotiation.

4. Equity. Nothing enhances an organization’s overall performance like its players having some skin in the game. See if you can negotiate an equity stake like stock options, stock grants or maybe a profit sharing arrangement.

5. Benefits. With healthcare such a volatile issue these days, it’s more important than ever to take a look at the health insurance package a company offers. Additionally, does the company’s plan include life and disability insurance? Is there a retirement plan and if so, does the company make contributions to the plan?

6. Vacation. Chances are you’re far enough along in your career that you’ve surpassed the standard two weeks of annual vacation. Be sure to negotiate to retain your hard earned time off.

7. Relocation. If there’s a relocation required, be sure that the company is covering the costs and that you’ll have no out of pocket expenses.

8. Severance. Find out if the company has a severance policy in place and what it entails. This can be a difficult topic to discuss at this stage of the game, after all, you’re just talking about starting down the road together. But, as we all know, there are no guarantees in life so find out what happens in the event of you part ways.

9. Duties and reporting structure. Having this spelled out from the onset avoids confusion down the road.

10. Start date. It may seem obvious, but you do want to make sure you and your future company are on the same page as to when you begin working for them.

This list is meant to be a basic starting point as you consider your offers, there may be other items and perks that you’d like to consider as well. Remember, the offer is used as the basis for your employment agreement and sometimes, with the signature of the parties involved, can become the actual agreement itself. Unlike some packages you may receive this holiday season, this package is a gift that keeps on giving, make sure it’s the package you want it to be.




Compensation: If You Don’t Ask, You Don’t Get

CompensationIt’s that time of the year again, when thoughts are turning to Black Friday, the beginning of the mad holiday shopping rush. Children everywhere are putting together their wish lists, but the questions is, have you put together yours?

Several of my clients are in the midst of negotiating compensation packages, what a nice present to enter the holiday season. But just as a child puts together a wish list for his or her holiday gifts, so too should you have a wish list for your own gift that keeps on giving . . .  your compensation package.

1. Putting together the list

When thinking about what you’d like to ask for in the negotiation (or what you’d like to counter with) make a list of what it would take for you to accept the position in the prospective company. Remember to include base salary, bonus, singing bonus, benefits (all too important these days), stock options and vacation time.

2. Do your research

It’s much easier to negotiate if you’ve researched the market and found out what companies are paying for professionals and executives in similar positions. That gives you a more compelling and dispassionate argument for getting what you feel you deserve. Fair market value makes business sense. Remember, if a company appreciates and wants to hire and keep your talent and expertise, they will be willing to pay for it.

3. The compensation package is just that, a total package

The compensation package goes far beyond just base salary. When negotiating, remember to look at the total package. That gives you more flexibility in the negotiation. Not only that, each of us has different wants, needs and motivations. For some, a generous salary base is most desirable, while for others it’s the challenge of a start-up with huge potential upside based on having a piece of the company pie.

4. Get the offer in writing

It’s always important to get the offer in writing, but even more so when you’re negotiating an executive compensation package. There are a lot of elements that go into these packages and you certainly don’t want anything falling through the cracks.

5. The negotiation should be a win-win

The person you’re negotiating with is someone that you’ll be working with in the future, therefore you don’t want the transaction to be contentious. That means you should ask for what you want rather than make demands. Making demands and becoming emotional could lead to an offer being withdrawn.

The compensation package is the gift that keeps on giving. Going in the door is the time to get your best package and always remember . . . if you don’t ask, you don’t get.