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Salary Negotiation – Learn What You Should Ask For

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This climate is a salary negotiation game changer. Countering salary offers won’t nearly be as effective as it once was. Savvy executives now need to pursue long-term value over short-term income to achieve meaningful negotiations.


Benefits that leverage or protect income can be more valuable than the salary itself. Leverage in this case means indirect or non-cash compensation, for example: employer matching for 401K, life insurance coverage or non-cash perquisites like a company car or country club allowance.


Executives should be mindful of the following:


  1. Stock options. Stock options authorize the purchase of stock in the employer company over a set period of time for a designated price. Job candidates should research the details of the stock option grant and specific stock option plan. The candidate should request options under the most favorable exercise terms available. Also, ask for an accelerated vesting schedule. Vesting is the rate at which you are entitled to a larger percentage of those benefits when you leave the company (e.g., vest over 5 years, or 20% per year).


  1. Pensions or retirement plans. Push for greater employer contributions or accelerated vesting adjustments to qualify for a pension. Older professionals should think about early retirement options in case a company reorganizes, downsizes, or goes through a merger or acquisition.


  1. Non-compete clauses. These can restrict you from working for a competitor or company in a certain industry. Instead of a non-compete clause, professionals should ask whether a nondisclosure or non-solicitation clause will be enough. A nondisclosure forbids employees from divulging proprietary information to a third party without permission. A non-solicitation clause restricts employees from soliciting customers or employees from a former employer. Clarke says, “Focus on narrowing the scope of whatever you sign.” Try to limit the agreement terms in length, geographic reach, definition of industry, work role, and prohibited work responsibilities. Consider consulting an attorney to know what you are signing.


  1. Severance packages. Most packages are given when an employee is let go (unless terminated “for cause”, but professionals should negotiate for this compensation if they resign after a certain tenure of service or after a change in management because of an acquisition, merger, or divestiture (“change of control”). One should consider the importance of negotiating the severance amount, extended health benefits (COBRA), the payout of commissions, bonuses and vacation time, post-employment exercise period extensions for stock, or pension-vesting modifications.


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