Career Negotiations Podcast

Executive Salary Negotiation - How to Negotiate Executive Compensation

• Brandon Bramley

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Do you know how to negotiate executive compensation? In this episode, I cover executive compensation packages, my proven step-by-step executive salary negotiation strategies, and some common mistakes to avoid during an executive offer negotiation.

That way you have negotiation advice that is based on hundreds of salary negotiations and actually work for executives.

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WHO AM I

I'm Brandon, the Founder and Lead Negotiator at The Salary Negotiator®. As a former corporate negotiator, I now help employees increase their compensation. Through hundreds of salary negotiations, I've helped career professionals secure over $200 million in additional compensation. My expertise is backed by more than 150 five-star reviews from career professionals on Google and Trustpilot.

Why Executive Offers Are Different

Brandon

Executives typically receive competitive compensation perks, but how do you know your executive job offer is competitive before you accept it? In this episode, my goal is to cover everything you need to confidently navigate an executive salary negotiation. I'm first gonna cover the compensation package structure for most executive level roles so you know more about the executive's base salary, the bonus, the equity package, and sign-on bonuses. That way you know exactly what to expect in an offer. Then I'm gonna walk you through my five recommended steps for negotiating an executive job offer that are proven through actual executive level salary negotiations that I've led myself for clients. That way you can filter out some of the bad advice out there and use salary negotiation strategies that are actually gonna work in your career. And I'm gonna close out the episode by highlighting three common mistakes that you should all avoid in an executive level salary negotiation. That way you don't risk the opportunity and you do actually secure competitive compensation. So let's go ahead and get into it. Hey everyone, welcome back to the channel. If you're new here, my name is Brandon Bramley and I'm the founder and lead negotiator at thesalarynegotier.com. I provide professional job offer negotiation coaching, salary negotiation courses, and tools to help professionals like you navigate the salary negotiation process and secure competitive compensation. I'm not just one of those career coaches or recruiters giving out generic advice online. There's already a lot of bad advice for salary negotiation floating around. So instead, I've actually personally led hundreds of salary negotiations across various roles, helping my clients secure hundreds of millions more in compensation. So my background actually is in strategic negotiations, and my goal is to debunk any of the bad advice out there and give you proven negotiation strategies that are actually gonna work and help you earn more in your careers. So if you are a career professional, you're looking to earn more competitive pay, subscribe here for actionable tips. And when you are ready to take your negotiations to the next level, visit me at thesalarynegotiate.com for coaching courses and tools that are gonna help you negotiate more pay in your next offer. Now, before we dive into how to negotiate an executive salary, let's talk about the compensation components because it's really important to understand the difference between your base salary and total compensation at the executive level. Way too many times your executives focus only on the base salary or their guaranteed comp, and that's just one piece of the puzzle when it comes to pay as an executive. So when considering a new company, you need to look at the whole picture, which is your total monetary take-home pay, also known as your total compensation. This is gonna include your base salary, any bonuses or incentives, the value of any best in equity each year, and any sign-up bonuses in your first or second year. Now, you're typically gonna find those four core compensation components in an executive's offer package. So, first, as I mentioned, there's your base salary. This is your consistent guaranteed pay that you're gonna see in every paycheck. It's really only gonna change with promotions or merit increases since it's a set rate. And this honestly shouldn't be new since you should have received this in every salary role since you started your career. So I'm not gonna spend that much time there. Second, you're gonna have an annual performance bonus or some type of incentive as an executive, which is usually a percentage of your base salary or it can be a guaranteed amount. And the range is typically gonna depend on the executive level and the type of role. And also it's gonna vary across companies, but usually it's gonna be based off your personal performance or the company performance, and it's gonna be paid out annually or quarterly, and it can fluctuate depending on that performance. Now, while the executive bonus is tied to your base salary, it's usually not negotiable, is what we found. But instead, if you're able to actually go ahead and negotiate up your base salary, the bonus is gonna increase along with it. So keep that in mind. Third, you're now that you're higher up in the company, you're hopefully gonna receive an equity incentive as an executive, right? So this is usually comes in the form of either restricted stock units, which are RSUs, or if it's a startup, it might be employee stock options. RSUs are gonna represent actual stock, which means you receive the shares in that company outright once vested. Instead, stock options are gonna give you the right to purchase a company stock at a predetermined rice. So you're essentially gonna have to pay the exercise price to own those options and turn them into actual shares, if that makes sense. So with executive equants, there's gonna be a stock vesting schedule. This means you'll need to wait for the equity to vest according to that schedule before you actually own the shares or the options. Most stock vesting periods are three to four years with the equity vesting in increments over that time. The stock vesting schedule may be evenly distributed or it could be staggered depending on the company. So for example, Microsoft's RSU vesting schedule is a four-year period with equal vesting, 25% best each year. So, however, if you move to a different company like Google, they have a staggered RSU vesting schedule where 38% best in the end of year one, 32% at the end of year two, 20% in year three, and the remaining 10% year four. So every company is gonna have their own specific vesting schedule. So you need to keep that in mind when you're reviewing your executive package. Now, you're not gonna get the full value of the equity up front, but you do share in the value fluctuations over that period. So if the stock price does go up, so does the value of your equity as an executive. The flip side though is that the company's not doing great, the stock price goes down, your equity value in your overall total comp is gonna go down with it. So there is risk to having equity. Also, it's important to note that if you leave before your equity fully vests, that you're gonna forfeit the unvested portion of your executive equity. So keep that in mind. Finally, there are sign on bonuses for executives. This one is huge and it's a one-time cash payment that's usually paid out 30 days after you start or with your first paycheck, and it's often designed to offset any loss incentives or equity that you're walking away from at your previous company, or even sometimes just as an incentive to join if you're not leaving a company to come join this new one. Executive sign-on bonuses aren't always included in the initial offer, though, that we found, so it usually requires some strategic negotiation. But we've always had great success in securing them for our executives that we work with, so it is an item that you should prioritize. Another item to note is that some companies that do offer equity to executives might also provide an annual stock refresh, which is essentially additional equity grants each year that you're gonna get based off a perm performance or based off a regular schedule. However, what we found is that most stock refreshers aren't always guaranteed and they're usually gonna vary significantly across roles and companies. So I don't typically include them in our total comp calculations, but you should be asking the hiring team about any stock refreshes and see if they will share those details. Now, these four main executive salary components that I mentioned your base salary, bonuses, equity, and sign-on bonus are gonna make up your total compensation as an executive for the most part. To help you visualize this, I have a total compensation calculator on my site where it actually lets you input your base salary, your bonus percentage or amount, your equity grant, and your sign-up bonus. Then it shows your estimated compensation over the ving period, both in your total and on an annual basis. You can go ahead and find our free compensation calculator at thesalarynegotier.com, and I'll go ahead and link to it in the episode notes below so you can actually use this free tool as you start to review your offer. Okay, so now that we covered how executive compensation structures work, let's go ahead and dive into an executive salary negotiation and the steps. Because at higher level roles, like an executive, companies are gonna expect you to negotiate, and there's gonna be a lot more money, benefits, and opportunity on the line. So I don't want you to mess this up because it's very important to secure the best package possible first by negotiating strategically before you begin, because you're really not gonna get the same leverage or another chance throughout the process unless you do lead to any new renegotiations. So when we look at the salary negotiation strategies, I've used these successfully to negotiate many executive job offers, and I'm gonna recommend you all follow them to navigate your executive salary negotiation once you actually have an offer at hand. So once you have an executive job offer, the first step to negotiate is to make sure that you fully understand the comp components and benefits in the package. Just like I shared earlier, right? The biggest takeaway from that is understanding the executive total compensation before negotiating. That way you're gonna know exactly what value the executive offer has and what to negotiate to make sure that you're not only looking at your base salary, but you're also looking at the other components that actually make up your total compensation and you're increasing all of those throughout the negotiation. The second step is what I usually call doing your due diligence or asking strategic questions. Okay, this is where you're gonna want to review your package and come back with a list of questions to the hiring team, right? This is not only gonna help you clarify questions you might have about the offer, but it's also gonna help you strategically ask questions that are gonna build salary negotiation leverage. It's also gonna make sure that you don't come out of left field when you are asking for more money and that you don't miss anything in the negotiation because you can call out things that might not be as competitive as, say, your current company that you're leaving or some of the competitors if you received other offers. And if you do need ideas, I have a whole list on my website of the strategic questions to ask. So feel free to grab those on the template page. But I can't highlight enough, right? Even as an executive, a lot of you try to skip this step, but it's very important in building leverage by showing you're doing your research and due diligence on the offer, right? That way when you send an executive counteroffer, you're not coming out of left field and you're not missing any items that might have been freebies that they may have thrown in just by asking some simple questions. Okay, so like a sign-on bonus, additional vacation, stipends all that jazz. A lot of those can be picked up in this step, so don't skip it. The third step is to do the executive compensation research. Okay, you're gonna want to find the base salary range for this position and the total compensation ranges for the specific role, the location, and the level of executive you are at that company. You can use a lot of online resources to find this data, but make sure that you're using multiple sources if you can find them and you average across those results. Because what we're essentially trying to do is we're trying to find the compensation ranges so we can see where your initial offer sits on those ranges and how much more room there is for improvement. Because we don't want to just go ahead and throw out random numbers that don't make sense. We don't want to take the old school approach of throwing out a high number to get them kind of split in the middle. Instead, we want to use data to driver decision and try to narrow down to the top end of the pay range because most companies are gonna try to hire you in at the lower end to the mid end of the payment because they do expect that you're gonna try to negotiate. So I always suggest you do the research and you target the top end of the pay range for your role. And just remember, right, this data is publicly reported, so it might not always be accurate. Executives might report higher equity than a new hire would give due to stock appreciation, or they might not have uploaded the compensation correctly. So if you do want help with this, I highly suggest using our compensation research and comparison tool on our template page or in our course to help organize this data and build to ask in your counteroffer. Once you have the executive compensation research done and you've gotten the answers to your questions, you're finally ready to draft an executive counteroffer. This is where we're gonna take a database approach and craft an executive counteroffer to send over to the recruiting team. We're gonna essentially present the top end of the ranges you're targeting based off your comp research and call it any items that weren't competitive based on your due diligence questions. I highly suggest doing this by email, even if you like having discussions, because it's gonna give the hiring team everything they need to advocate for you and they can simply send your points onto the comp team instead of hoping that they're gonna actually note down all your comments on a call. Plus, recruiters negotiate offers every day, so they're gonna be ready with tactics and to cut you off or steering in a different if you do try to counter verbally. So instead, it's a lot better to send it by email first and then if a follow-up call, you'll be prepared for that. So, with that, if you did send the counteroffer in first and they still want to chat, you're gonna want to go ahead and be prepared for some pushback after sending the executive counteroffer because it's almost guaranteed that you're gonna get pushback from the hiring team, whether it's the new leader or the board that you're working with or the CEO or if it's just the recruiter, because they are trained to deter you from negotiating and talk you down from what you shared in your counteroffer. So you need to be prepared for this pushback and know exactly what to say to overcome these objections to get them to take your concerns back to the comp team, all while not jeopardizing the relationship. Essentially, you're gonna want to say that you understand their constraints, but nicely reiterate yours and ask them to take it back to the comp team for another look. It's honestly gonna probably take overcoming objections a few times, but if you do get them to agree to take it back for another look, nine times out of ten, they're gonna come back with a better compensation package. So it's very important to be prepared for that step. We also have our full list of objection handling responses on our templates page and in our course for download if you do need these scripts, because this is where most executives or anyone negotiating a salary falls short. So I talk through exactly how to use these and exactly what to say to make sure one, you're not jeopardizing the relationship, but two, how to overcome them. Um, from here, the biggest thing is when the recruiter comes back, they're either going to come back with a better offer that Mitch your needs, or it's gonna be lower than their ass. So at that point, you can decide if you do want to make another push on your executive counteroffer and send another one, or if you're ready to actually proceed forward and they hit everything you asked for. My biggest call out here is doesn't matter how you negotiate in the boardroom as an executive, right? Or with other businesses, it's not like negotiating like that. It's also not like how you negotiate in a car dealership. There really isn't gonna be a lot of back and forth, and I wouldn't recommend going beyond two counter offers. Otherwise, you might come off as too aggressive and jeopardize the relationship. The biggest thing here is you should be talking almost like you're talking with a friend that's helping you feel comfortable with a move to the new company. And always keep that tone to make sure you're not jeopardizing the relationship and they actually do work on your behalf to get you the best package possible. Okay, so the last thing I want to cover is a few executive salary negotiation mistakes before you do decide to negotiate an executive offer letter. All right, I get it, you're an executive, you make the decisions a lot, and you think you're always doing the best, but there's some key mistakes when it becomes a salary negotiations that a lot of people mess up, and I don't want you to mess up with this, especially in these discussions, because they're a lot different, as I mentioned before, compared to some of the other negotiations or conversations you have in your everyday role. So the main item I'm gonna recommend against is do not share your current comp or your salary expectations with the recruiting team. It's only gonna work against you, and all it's gonna get them to do is maybe match or slightly beat your current package or low ball you if they were willing to pay more. Okay, so if you think about it, if you throw out a number that's lower than what they could offer, you're likely gonna get less competitive compensation at the low end of their pay range, or you run the risk of being like downleveled if they want to go ahead and bring you in at a different level before you get to the executive level. So don't mess that up, okay? On the flip side, if you throw out a high number thinking, hey, this is gonna help me get something competitive, if they're looking at other candidates, they might be like, shoot, we can't afford them, let's go with someone else, right? So always stick to the data, don't disclose this until you get the offer package and use the leverage that you have once you receive the offer and the data to actually drive your negotiation rather than trying to anchor high before you even get the role, know you're gonna get the role and end up shooting yourself in the foot. So don't do it. And remember, at the end of the day, the hiring team knows exactly what they can pay for the role. So you always want to turn the question back on them to see if they're willing to give you the base salary and the total compensation ranges for that position. So you have a better idea as you go through the interviews. So keep that in mind. The second mistake to avoid is making sure that you're realistic about what you should ask for in the executive counteroffer. All right, way too often I see executives ask for way too much, which just doesn't make sense. You're either gonna get laughed at, it's gonna come off as aggressive, or you might even get the offer rescinded or not get the offer at all, right? So you're gonna want to always avoid that. Always make sure you take a database approach as an executive to ensure you're asking for realistic compensation that they can actually provide. Because at the end of the day, unfortunately, companies are required to stay within certain compensation bands and they have approved packages set up for their executives, the role and the level. So it's silly to jeopardize your executive job offer by coming off as too aggressive and asking for unrealistic numbers. So just don't do it. And finally, don't be worried about an executive salary negotiation, right? Some people might feel nervous. Hopefully you don't since you're at the executive level. But at the end of the day, it is expected and there's a lot more components that are on the table as well as money. Okay, so as long as you're following proven strategies or working with a negotiation professional, there's no reason you would ever risk the executive offer. So I highly suggest negotiating before you accept because this is gonna pay career dividends later down the road. All right, so that wraps up this episode on executive salary negotiating. So I really hope this breakdown of your compensation structure as an executive, our proven executive salary negotiation strategies and negotiation mistakes to avoid in all negotiations, including as an executive, helps you feel more confident in these discussions. But honestly, if you're serious about getting the best possible offer and comp package, I highly suggest you don't go into the salary negotiation alone. So head over to the salarynegotier.com to either work with me directly as your salary negotiation coach or check out my salary negotiation courses and tools on our website. You'll find all the links in the episode notes below. And if you found this episode helpful, make sure you subscribe, leave a comment, and share it with someone who could use this advice in their career. Thanks for tuning in and happy negotiating.

Brandon

 SALARY NEGOTIATION TOOLS MENTIONED • Salary Negotiation Coaching: https://www.thesalarynegotiator.com/ • Salary Negotiation Courses: https://www.thesalarynegotiator.com/courses • Salary Negotiation Scripts & Templates: https://www.thesalarynegotiator.com/salary-negotiation-templates • How to Negotiate a Job Offer Course: https://www.thesalarynegotiator.com/job-offer-negotiation-course • Salary Calculator: https://www.thesalarynegotiator.com/total-compensation-calculator SALARY NEGOTIATION RESOURCES • Executive Salary Negotiation Guide: https://www.thesalarynegotiator.com/resource-center/executive-salary-negotiation • VP Salary Negotiation Guide: https://www.thesalarynegotiator.com/resource-center/vice-president-salary-negotiation • Best Salary Negotiation Resources: https://www.thesalarynegotiator.com/best-salary-negotiation-resources • Job Offer Comparison Tool: https://www.thesalarynegotiator.com/job-offer-comparison-tool • Video Guide: https://www.youtube.com/watch?v=OcQyfP9u6nk

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