Negotiate compensation for your new offer
For the past five years, I developed compensation offers for Executive New Hires. Here are the top five things candidates should know.
For the past five years, I led the Executive Compensation function globally for a Fortune 200 Company. In that role, I assembled compensation offers for new hires at all our executive levels globally. Here are five of the top things that I learned during my tenure that candidates should know:
1. Certain elements of Compensation in offers are negotiable; others are not
The flexibility differs by level of the role – the more senior the role, the more flexibility there is to flex on base salary, or bonus targets. The lower the level, the more limited availability to flex on different elements. To address some of the lack of flexibility, we often made up in the form of one-time sign on awards.
Highly Negotiable: Start date; sign on equity awards; cash sign on bonuses.
Potentially Negotiable: Base Salary, Short-term incentive (bonus) target, long-term incentive target.
Typically Not Negotiable: Severance, employee benefits, executive benefits, title.
2. Female candidates generally did not negotiate as aggressively as male counterparts.
Our company never made an “unfair” offer – our offers were always based upon a thorough review of both external compensation market data, as well as internal equity, and always consistent with our company’s compensation philosophy. That said, my experience was that men tended to negotiate harder on their offers than the female candidates to whom we made offers.
My wife recently attended a compensation and benefits conference, and she noted that one of the speakers at the conference had the same observation about the differences in negotiation skills among male and female candidates. Over time, these differences in beginning compensation can become very exaggerated.
3. Candidates who inquired about, or requested guaranteed severance in their offer letters immediately tarnished their candidacy.
On more than one occasion, we rescinded offers to candidates who wanted a guarantee of six or twelve months severance. Our company did not have a severance policy, but we had rather standard practices. However, candidates who requested minimum guaranteed payments came across as expecting to fail in their new roles.
4. Don’t negotiate forever.
No hiring manager wants to negotiate forever. You will likely have only one bite at the apple.
5. Explain your rationale for requesting additional compensation.
Candidates who were able to explain why they were requesting higher pay typically were more successful with renegotiated offers. For example, requesting a larger sign on bonus to make you whole for the bonus you are forfeiting from your current employer. Demonstrating (and having documentation) the value of compensation elements you are losing from your currently employer.
Key Takeaways:
- Research where you have flexibility to request additional compensation; reach out to Wyndwicke Group if you need advice/guidance negotiating your offer.
- Avoid addressing the severance issue; keep a mindset of being successful in your new role!
- Keep your request to a few key asks, and be ready to accept the offer should your new company accede to your request(s).
Need help with your offer? Contact Wyndwicke Group now:
