You've probably been here: Something compels you to doubt your compensation package. Perhaps you feel underappreciated or undercompensated, or the up-tick in the job market has you pondering new opportunities. Even at the highest ranks of executive search, CEOs and CIOs everywhere are seeking validation through compensation. However merit isn't the only factor affecting a fruitful compensation: It's all about negotiation.

1. © 2007 Copyright Vell Executive Search
Experts Connection
Negotiating Your Worth
• Presented by Dora Vell, Managing Partner
• Vell Executive Search
• www.vell.com

2. The Facts of Life
• You don’t get what you deserve… You get what you negotiate.
• You own your career and compensation
• Being rich is better than being well paid.
• Own the upside of your efforts.
• You are your own brand.
• The market buys brand recognition and repeat performances.
• You vote with your feet not with your mouth.
• No offer is fair – Just acceptable or not acceptable to all sides.
• The range of the offer you will get is determined sooner than
you think!
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3. Executive Compensation Trends
• In recent years*..
– Firms saw significant profit and revenue growth which
boosted employment levels and increased executive
compensation in all executive positions.
– Usage of Stock Options is being reduced in favor of
restricted stock and long term performance incentives.
• The market is fairly active and “the balance of power is fairly
even”.
*Study Dolmat-Connell & Partners
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4. Phase One: Pre-Conditioning
1. Don’t Swim Upstream
• Critically assess your core competencies.
• Be focused on target employers/sectors.
2. Present a bottom line story
• Make sure you’ve got your story straight.
• Watch subliminal messages/language…
e.g. don’t use CFO language if you want to be CEO.
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5. Phase One – (continued)
3. Identify and eliminate holes
• Identify and address issues against you. Develop strategies for
handling.
4. Know the industry universe
5. Be a 24/7 ambassador
• Develop a knock-out resume.
• Get on the radar screen: help recruiters that call you with names.
• Be polite and friendly to everyone.
• Convey sincere excitement.
• Never speak negatively about a prior boss/company.
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6. Phase Two - Negotiation
1. Always negotiate in good faith
2. Portray past compensation accurately and completely
3. Research the financials of the Company/Industry
• 10K and proxies for company.
• Hoover’s Professional
• Executive Search Consultants
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7. Phase Two – Negotiation (continued)
4. Negotiate beyond dollars
• Don’t start the compensation discussion (always hold off)
• Have the company make the first offer if possible
• Ask questions about role/responsibilities and negotiate
budget & targets
• Negotiate the entire package all at once. Not point items.
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8. Phase Two – Negotiation (continued)
5. Research Financials & Compensation Survey Alert
• Surveys are general & your situation is unique
• Get a number of surveys and realize a trend
• Ensure that your geographic and industry sector are
reflected. E.g. a CIO in retail in Iowa has a different pay
structure than a CIO in finance in New York City even
if the skills are equivalent..
• Company philosophy matters a lot
• Best surveys are the proxies of the company and the
industry.
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9. Phase Two – Negotiation (continued)
6. Don’t retreat or be too aggressive
• Don’t try to re-invent their process.
• Don’t retreat too quickly. Take your time to negotiate the offer.
• Don’t be too aggressive. Respect the Company’s compensation
philosophy.
• Business Terms first. Legal terms second.
• Understand cost of living differentials, tax impact of your move,
the options.
• For CEOs, I recommend getting an employment lawyer.
• Get it in writing! Do not resign a job before you have a bullet-proof
offer, including background checks.
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10. Resources
• www.vell.com
• See also our candidate resources page
• Cost of living websites (www.bankrate.com)
• Compensation Surveys:
– Good compensation analysts. Get on their mailing lists.
– www.bls.gov; www.nacdonline.org; www.eriei.com; www.salary.com;
Culpepper reports, www.nvca.com; www.dolmatconnell.com
– For good employment lawyers/tax accountants call Vell & Associates.
• Proxies are the most accurate form of looking at compensation.
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11. Short Term Bonus
• Multi-year guarantees
• No pro-ratio in 1st year
• Target conversation
• No short term bonus
Elements
of the
Deal
Base Salary
• Starting salary
• Guaranteed raises
• Raises based on events
Sign-On Bonus
• Make whole
• Multi-year
• Fit employee on with
current salary structure &
pay more
Options
• Up-front
• Out-of-money grants
• Performance/event related
grants
• Guarantees of future grants
• Synthetic options on stock of
current employer.
Long Term Bonus
• Cash
• Options - % of base
• Restricted Stock
• Event triggered
Termination Clauses
• Termination with or
without clause
• Termination ranges
• Elements of termination
Others in the Deal
• Spouse
• Accountant
• Financial Advisor
• Attorney
Relocation
• Up-front payments
vs. pay for costs
• May be hidden way
to increase offer
• Understand cost of
living differentials
Loans
• Way to pay people out
• May be housing differential
mechanisms
• May be forgiven over time
•Clause regarding buyback in
case of termination
• Watch new SOX regulations.
Co-Investing
• Ability to buy in at the venture
capital price
• At beginning
• Later rounds
• Loans to do this
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