A job offer presents an opportunity. Making the most of this opportunity can set up a fulfilling career that benefits you and the business you work for—if you negotiate properly. In this blog post, we break down successful executive job offer negotiation into four distinct points. Let’s get started.
Executive Job Offer Negotiation
Key #1 – Base Pay
First, you will want to make sure that the company you intend to work for will be able to meet your basic financial needs. This means that your average paycheck should enable you to set up your home life in such a manner that you will be able to fully concentrate on your work. Take into account yours and your family needs for health and dental insurance. You may also consider disability insurance and your retirement benefits. In some cases, you may need to negotiate an annual bonus that compensates you for the limits of these benefits.
Key #2 – Ensure Equity Stake in the Company
These days it’s customary for executives to secure an equity stake in the company with which they work. What makes this part of your compensation package so valuable is its potential for exponential growth. Should the company’s value double or triple, your equity piece can rival the value of your base pay and bonus. Additionally, this part of your compensation is taxed differently. Often these gains are taxed at half the marginal rate of normal income, and they probably won’t be subject to payroll taxes either.
Importantly, there are many ways in which equity can be structured. You’ll want to consider the benefits/drawbacks of ISOs, RSUs, restricted stock, non-qualified options, and performance shares. Another aspect of your executive job offer negotiation will be determining your exercise time frame. Commonly, you must exercise within 90 days of termination, but this can have an impact on its worth if the value of the stock has decreased. In some cases, you can negotiate to exercise within 3-5 years.
Key #3 – Long-Term Incentives Plans
A key negotiation point should be setting up your compensation so that when the company wins, you win. Obviously, equity in the company is the most obvious manner in which to create a long-term incentive. However, your bonus and base pay can also be part of these incentives. You will want vesting to be tied to how the company grows in value and achieving specific milestones.
Each year, goals can be outlined so that priorities are clear and incentives are laid out. Importantly, bonuses should be tied to the realization of specific milestones or goals. The goal of your executive job offer negotiation is to set up compensation that realizes both your company’s and your own goals effectively.
Key #4 – Display Your Strengths in Negotiation
In an executive level job offer negotiation, you are bargaining for your own success and well-being. If you’re unwilling to go to bat for yourself, or stand up strongly for your own value as an employee, can you be expected to do more for the company? Obviously, you don’t want to be so unyielding that your potential employers are put off, but neither can you content yourself with compensation that dissatisfies you.
If you’re taking on a job that pays less than what you’re used to, you will want to clearly identify what factors are leading you to take this pay cut—and how you intend to enable the company to compensate you more fully in the future. Additionally, you will want to have clearly identified duties and responsibilities, any position on the board, a potential signing bonus, triggers for termination, severance packages, and relocation possibilities that may arise.
Executive Level Job Offer Negotiation Advice Virginia
We hope this information enables you to make a strong case for your compensation should you have the opportunity. However, if you desire a more detailed analysis of an offer or how to invest for long-term growth, seek the advice of the advisors at Argent Bridge Advisors. Call our office at (833) 568-4900 or fill out our contact form here to reach us.