You’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.