Late last year I was fortunate enough to have several exciting conversations with Ezra Singer, who is arguably the foremost authority in the US on executive compensation. Ezra now serves as an advisor to top executives on compensation negotiation. He is a former Senior Executive HR Leader for Verizon, GTE, Limited Brands, and Lenovo – where he partnered with CEOs and Boards to hire hundreds of senior-level leaders. Ezra knows what he’s talking about and I was thrilled when he agreed to my invitation to write a guest post for my blog on executive compensation tips. Soon we will be posting a video that will dive a little deeper into this important topic so stay turned!
Guest Post by Ezra Singer, CEO and Founder Ezra Singer + Associates
Few negotiations are more important, or more personally challenging, as those related to your own compensation. There is generally an imbalance in knowledge. The Company has market data that you may not have and further knows the range of what it will pay for the position.
These is often a fear on the executive’s part that if he/she is too aggressive the company may pull any offer, or it may cause hard feelings with the prospective boss/board. On the other hand, failure to negotiate generally means leaving money (often a lot of money) on the table.
The following 5 tips have helped my clients negotiate significant improvements (I am talking hundreds of thousands of dollars) over a company’s initial offer:
- Be enthusiastic. At all times let the Company know how much you are interested in the position and the significant value you will bring to the Company.
- Don’t make the first move. Ideally, do not tell recruiters what you are looking to make in the position. It is perfectly reasonable to ask the range of the job and let them know you would like to be paid at the top of the range. While some recruiters may be reluctant to share this information at first, time and again my clients have stood firm and been successful in having the recruiter tell them the range. Then it is just a matter of negotiating from a higher starting point.
- It’s much more than salary. At the executive level, and particular with companies owned by private equity firms or startups, the opportunity for real wealth is in equity- be it restricted stock, options or other long term pay. Make sure you fully understand the actual and potential value of these grants, along with the risks and lack of liquidity that may accompany these grants.
- Don’t over-negotiate. Usually you have one, at most two opportunities for counters. Be strategic and realistic in your asks. Often sign on bonuses provide the best opportunity to come to a solution that is acceptable to both parties. Many of my clients have received hundreds of thousands in sign on bonuses. Remember you want to start on the best possible terms with your new company.
- Negotiate your severance as part of the initial offer. The reality is that given today’s business environment, no executive’s job is secure forever. There may be a change in Board structure, C Suite leadership or business direction. The hiring stage is the best opportunity to recognize that these things are possible and negotiate a package that will protect you and your family in the event of involuntary separation. Severance agreements ideally cover the same length of time as any non-compete.
My website at ezrasinger.com provides further information on how to maximize your compensation when changing jobs along with testimonials that highlight the successes clients have achieved.
