by Chuck Csizmar - Oct 16, 2009
Setting the stage to handle a job offer:- you are a senior professional in Transition, or
- you are seeking a Job Change, or
- you simply wish to understand the process.
Role of the Recruiter:
- your friend, if you can help them.
- a candidate screening mechanism.
- try to avoid making their job more difficult.
- work around them at your risk.
- working together is the best strategy.
Elements of Employment Offer
Base Salary
Annual Incentive Plan
Long Term Incentive
Equity Program(s)
Perquisites
Benefits
Base Salary
Considerations:
- offering salary in relation to previous salary.
- consideration of internal equity.
- possible practice / policy of hiring below midpoint.
- be aware of the “Super Model Syndrome”.
Negotiable:
- initial salary offer.
- hiring bonus.
- advance on next Performance Review date.
- the executive contract.
Not Negotiable:
- guaranteed future salary increase.
- indexing future pay to internal relationships.
- guarantee of future promotion / job change.
- buy-out of lost incentive payment.
Annual Incentive Plan
Considerations:
- award for performance beyond normal accountabilities.
- target awards typically variable by organizational level.
- likely requires employment on payment date.
- pre-established objectives and performance measures.
- eligibility based on position; not discretionary.
Negotiable:
- minimum payment or performance rating: 1st year.
- late term eligibility.
- broadly defined objective setting.
Not Negotiable:
- individualized plan design.
- alternate formula in a profit-sharing type scheme.
- target incentive different from peer group.
- guaranteed payments beyond 1st year.
Long Term Incentive
Considerations:
- addition to annual incentive plan.
- typically 3 or 5 year program for senior Executive staff.
- percentage of salary set as reward target.
- performance factors: corporate vs. individual.
Negotiable:
- Eligibility
- Eligibility Date
Not Negotiable
- different Vesting schedule for payments.
- different target amounts.
- alternate performance factors.
Equity Programs
Considerations:
- offer of either stock options or restricted shares.
- award levels based on organizational hierarchy.
- loss of vesting rights at Termination.
- ask about “present value” of awards.
Negotiable:
- early eligibility (before Board meeting).
- supplemental options / shares for 1st year.
- buy-out of lost vesting rights.
Not Negotiable:
- different vesting schedule.
- alternative award levels past 1st year.
- setting the grant price.
Benefits
Considerations:
- welfare and ERISA plans commonly provided.
- cost sharing policy becoming commonplace.
- annual renewal after initial enrollment.
Negotiable:
- relocation
- increased vacation.
- pre-existing or special case situations.
Not Negotiable:
- different premium costs / deductibles.
- use of alternative carriers.
- carrying over coverage from previous employer.
- setting up individualized retirement plan.
- considerations not provided to peers.
Perquisites
Considerations:
- benefits not generally available to general population.
- eligibility often determined by hierarchy.
- concern over internal equity (who else?).
Negotiable:
- title, office space, assigned parking, furniture.
- phones, cars, Blackberries, computers.
- Country Club memberships, business class travel.
- be prepared to justify request.
Not Negotiable:
- special treatment where setting precedent is a concern.
- significant expense items that are “just not done”.
Suggestions for Negotiating Strategy
Always be positive and polite.
Focus on value of experience and contribution.
Only push where prepared to walk away.
Avoid the distraction of minor issues.
Keep the recruiter on your side.
Speaker bio: Chuck has 30 years experience, and 3 1/2 years as a consultant. He runs the CMC Compensation Group.
407.462.1645
ccsizmar@cmccompensationgroup.com
www.cmccompensationgroup.com
Posts
