you're already an executive or just an aspiring big cheese, it's
never too early to begin studying the sophisticated art of negotiating
executive compensation. Only executives are eligible for many types
of perks and benefits - if you disagree, try asking for your own
jet. And executives often have access to data sources that are harder
for other employees to use, or less relevant. But you may be surprised
to learn that some of the methods for negotiating executive
pay can work just as well for you as they do for the senior VP whose
salary continues to rise while everyone else worries about getting
a pink slip.
In your research, don't neglect to find out about the typical
perks and benefits associated with the job for which you are interviewing.
A basic compensation package includes base pay, short-term incentives,
long-term incentives, benefits, and perquisites.
minimum annual incentive
to purchase restricted stock
to pay taxes
to purchase home
employee benefits *
executive medical insurance
executive life insurance
executive retirement plan (SERP)
deferred compensation plan
of company plane
tuition for children
gross-ups for taxable benefits
employee benefits are not negotiable. However, companies will
make adjustments via corresponding supplemental executive
addition, executives often receive additional or supplemental benefits
and perquisites, which may include a special retirement plan, a
deferred compensation plan, extra insurance coverage, extra vacation,
company cars, use of company plane, club memberships, financial
and legal counseling, and so on.
executive compensation packages even include the kitchen sink -
literally. A quick review of public filings reveals numerous executives
with company-provided or subsidized housing, including America Online,
Loews, Mattel, and many more.
components of compensation are negotiable, including a number of
items many of us may never think of considering as part of our pay
packages. Remember, not everyone gets everything, and many of these
benefits may not be important to you. Focus on those that are important
to you and relevant to your job.
your best buyers
Research into market "comparables" - data on what
comparable employers are paying for comparable people doing comparable
jobs - is only part of the job of valuing your talent. Your worth
is a matter of what the market will pay. That means it's a both
what you bring to the table, and what an employer is willing to
pay for your particular combination of skills and experiences. Before
you negotiate a specific compensation package, you need to look
for the buyer - the employer - who will put the most value on your
a challenge made more difficult at the executive level, because
there is usually only one VP of marketing, VP of research and development,
VP of finance, etc. Although all are VPs, their pay may be significantly
different, depending on the needs of the organization and the strengths
and weaknesses of the individual in the role.
the executive level, pay is very much dependent on both the specific
person and the specific jobs. Comparing two executives' pay almost
always requires making adjustments to get something like an apples-to-apples
the relative uniqueness of executive jobs makes it difficult to
find a clear direct comparison, it also opens the door for identifying
major skills you bring to the job above and beyond the standard
roles. These "extras" could enable you to command a pay
premium. Some common leverageable strengths include extensive industry
contacts, strong fundraising or partnership-forming skills, or experience
with a unique type of opportunity that closely resembles the prospective
employer's business, even if it is in a different industry.
example, Jim Barksdale became President and CEO of Netscape Communications
in 1995 after having set up the widely successful hub-and-spoke
logistics and technology infrastructure that forms the backbone
of FedEx, and then serving as CEO of McCaw Cellular Communications
(now AT&T Wireless Services).
your unique skills when developing your negotiation strategy. Whether
you're looking for a new job or just a new pay package at your existing
job, these strengths will help you get what you deserve.
Make sure you've taken care of your golden parachute - ideally,
when you first start your job. A golden parachute should protect
you from layoffs related to financial hardship as well as layoffs
related to mergers and other restructuring events. Especially if
you are asked to help shape the postmerger or post-restructuring
company, you should insure yourself against the consequences of
having to eliminate your own job.
Bill Coleman, Senior Vice President of Compensation