Even the smartest, best executives can get tripped up when negotiating their pay packages. I’ve seen it time and again, both from the inside when I created executive offers at top companies and from the outside now that I’m a salary negotiation coach.
Here are nine mistakes executives make in salary negotiations that can either shrink their packages or throw a wrench in their negotiations — or both.Executives: don't let these 9 common mistakes derail you when negotiating YOUR pay package. #salarynegotiation #executivepay #paynegotiationcoaching Click To Tweet
1. Not Being Crystal Clear About Long-Term Incentives
This one is first on my list because it’s not only the most important but the most common mistake I help executives navigate.
As an executive, chances are pretty good that your long-term incentives (whether they’re cash, stock or a combination of the two) are the biggest part of your pay package. You simply must be clear about how much your long-term incentives are worth, how long they take to vest and what happens to them if the company is bought or sold. Or, heaven forbid, goes under.
If you’re going to work for a start-up, this piece is even more important, since you’re likely giving up some of the base and annual bonus you’d get at a publicly traded company for equity.
2. Neglecting Terms Of Employment Agreement
This one’s big, too. If you have an employment agreement, which is not uncommon for C-suite executives, it’s important to understand all of the terms therein (as they say).
Sure, it can be confusing, and you might never trigger the terms of the agreement. But you need to pay attention to what happens to your pay if you leave the company, whether it’s your idea or the company’s.
The top three things my clients ask me about are change of control agreements, non-compete clauses and the definition of termination for cause. Some of these agreement terms can be negotiated, and many cannot, but it’s important that you go into your new job with a clear understanding regardless.
3. Taking Things Personally
Believe it or not, pay negotiation isn’t personal. It really isn’t. The amount that a company is willing to pay says way more about how much they value the job than about how much they value you as a person. Try not to take things personally; it’s not about you. My clients who are able to shift their perspective to look at things more objectively are more effective in their negotiations than those who can’t.
4. Being Clueless About How To Justify Sign-On Bonuses Or Equity
Most of my pay negotiation clients have no idea what to ask for as a sign-on bonus before we start working together. But just because sign-on bonuses (or equity) are discretionary doesn’t mean that they’re arbitrary.
Most companies use sign-ons to compensate executives for bonuses and/or equity value that they’re leaving on the table at the organization they’re exiting. When you truly understand the worth of what you’re leaving behind, you can have a meaningful conversation with the company about your offer.
5. Getting Hung Up On Relocation Details
Yes, relocation is important. You’re uprooting your family and changing cities (or even states or countries). But unless you’re looking at an international assignment, relocation benefits are relatively small in relation to your overall pay package. And they’re one-time costs. Feel free to negotiate here, but remember that negotiation fatigue is a thing, and you might want to prioritize other, more valuable elements ahead of relocation.
6. Only Considering Advice From Loved Ones
Unless you’d pay them for their expertise in the field of pay negotiation, this might not get you the results you’re after.
Family and close friends want you to be safe and protected. And they don’t want you to be disappointed. Ever. So they might not advise you to take the same risks that an expert would, like asking for more pay, equity or sign-on bonuses, or negotiating for better employment terms.
That’s not to say that these important people in your life don’t have a role in your job search and offer journey. Ask the people you know and trust to be a sounding board and to help you assess culture and fit. And once you have a negotiated offer, the people closest to you can help you decide whether to accept it. (And if you do have an expert in the family, lucky you!)
7. Assuming The Company Will Automatically Do The ‘Right Thing’
They might, but then again, they might not. Nobody has as much of a vested interest in your pay package as you do. What’s right for the organization isn’t necessarily right for you, and vice versa. Don’t give up your negotiating power just to be nice.
8. Over-Negotiating Benefits
Just like relocation, when you’re at the executive level, letting benefits details derail your negotiation conversation is a mistake. If the new company’s benefits are worth a couple of thousand dollars less than the ones you currently have, is that enough to change your mind about the opportunity?
It might be, but as an executive, chances are good that benefits are a very small part of your package. And you could probably replace your awesome free gym membership, stock purchase plan or life insurance benefit fairly easily on the open market. Keep your eyes on the (total rewards) prize.
9. Thinking You Have All The Answers
You’re an expert in your field, not in executive compensation. Executive pay packages are complicated. If you want to truly understand the full extent of your package and maximize your effectiveness in negotiation, partner with a professional salary negotiation coach.
Just because these executive pay negotiating mistakes are common doesn’t mean you have to make them. Do your homework, set your priorities, don’t take things personally, and bring in an expert. You’ll be glad you did.
This article first appeared on Forbes.com.