The Anatomy of a Compensation Negotiation
What will it take to get you on board? The CEO asks his preferred candidate to become his V.P. of Business Development. Set your compensation with confidence. Preserve trust. Share vision. Outline an action plan, and be honest and reasonable in your expectation. Expect fair compensation and be aggressive in performance bonuses.
1. Acknowledge and reinforce trust. The CEOs trust a major assignment only to someone whom they like and respect. It is an honor to have the chance to grow a venture’s revenue, mentor people, and earn new relationships. Acknowledge this very significant fact. Whether you do or don’t end up signing up, preserve the wholesomeness and goodness of the offer. Reinforce trust. While fair compensations is necessary, trust is precious and not negotiable. You might succeed beyond your all expectations, or you might go bankrupt, preserve your relationship. It is priceless.
2. Confirm vision. Ask the CEO to restate the vision. Listen. Is the vision clear or fuzzy? Flexible or fixed? The offer is preceded by discussions about vision, mission, and goals. For one more time, have the CEO repeat them. You restate them. Be on the same page. This is an important milestone. Shake hands or bump your wrists.
3 and 4 are interchangeable topics: 30-60-90 Day Action Plan and Tasks of the plans. Play them as you see fit. These are the meat of the matter. They reinforce your legitimacy and credibility to do the job. Go between the big picture and specific tasks to develop a shared vision for the first 90 days. Sometimes the executive team needs immediate action and other times it needs you to study alternatives and offer alternatives. Outline what you foresee and how you would envision this work. This discussion reinforces your value and skill. You earn your right to ask for compensation based on your expertise.
5. Finally, get to the heart of the matter. Agree and celebrate. What’s the base salary that would fit your expectation for the value you would add to the CEO, executive team, employees, partners, and customers? Here, my client asked for a $150K base salary and committed to 30 hours of work per week. Additionally, he asked for equity and bonuses and laid out the formula to include revenue, channel engagement, and branding. These were things he knew going into the talk, were important to the CEO. Don’t overreach and don’t sell your short. Your pay is less important than your relationship and professional goodwill. Don’t be cleaver but don’t be shy if something important to you is missing in the compensation. If you are as valuable and respected as the respect you are showing, the CEO will reciprocate. This is a good test of how the future could look.
You are an executive. Your talk has already reinforced trust and established how you will add value. Command your compensation based on your proven worth. Whether to take the job or to reject it, is in your hands. You have reason to be confident. Follow the five points and the job and compensation will chase you.