Help, please, on new salary negotiations

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Admiral
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Help, please, on new salary negotiations

Post by Admiral » Thu Jan 26, 2017 12:46 pm

Background:

My boss, the second-in-command of a multi-billion dollar non profit, is leaving to take the job as head of another multi-billion dollar non profit in another state. A short plane ride but not drivable. I have worked closely with him for about 9 years. He asked that I come with him. I am the only one in the organization he has asked. My current position is very secure (he told me so) but I would have a new boss in a few months. There is a national search for this person so I have no idea who it will be, or if i will have a good working relationship with this person.

I told my boss--whom I love, and who clearly respects my work--that I am unable to fully relocate. After discussing with my DW, we agreed that I would propose an initial 3 days per week in office in the new job, the rest remote. This is a major sacrifice as I have youngish kids and my wife also works. Basically it would mean flying down on a Sunday night or Monday, staying two nights, and flying home. Not ideal (my current commute is ten minutes by bike) but it could be worse. Flight time is one hour, airports are 15 min drive on both sides. The new co. would be expected to pay for my housing (apartment, not hotel) and of course travel. The benefits are overall better at the new job. This is a more-senior job with more work. I would be, for all intents and purposes, as high as I am likely to go in my profession. I am age 45. (I expect to stop work in my mid to late 50s).


We talked about this and he was happy to hear my proposal, and thinks it is workable. He is the big boss but there is a comp committee, and he needs to look at the structure of the office before we begin real comp. negotiations.

Now, my question:

My current comp is $122,000. According to data from salary.com as well as my professional association, that is around the median for my industry, if not my specific duties. 20% of people in my general industry make $150-200k.

I am very good at what I do, and he values my work (clearly). There are a limited number of people who do what I do, and few that are as good (modestly speaking). None of them know him like I do.

Based on all of the above, I feel it is appropriate to ask for $180k.

It is a hefty bump, but my guess is very few people relocate (or partially relocate) for a 20 or 30% raise.

I have no idea what they can afford, but he is the chief, so presumably they have given him money to work with.

Does this seem out of whack?

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czeckers
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Re: Help, please, on new salary negotiations

Post by czeckers » Thu Jan 26, 2017 1:13 pm

Given that he is asking you to go with him and to either relocate or to do a very long commute, that makes starting the negotiation very easy.

"Boy, this is an exciting opportunity, but it would be a tremendous sacrifice for me and my family. What type of compensation do you have in mind?"

You could even add, "It would cost me at least x to relocate or y each month to commute, not to mention leaving the security of my current job"
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zeeke42
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Re: Help, please, on new salary negotiations

Post by zeeke42 » Thu Jan 26, 2017 1:18 pm

Personally, I wouldn't want to live that lifestyle, and I don't have kids. It would take life changing money for me to even consider it.

Just because you like your boss and like working for him at your current job doesn't mean you'll like it as much at the new place. Similarly, just because you like this boss doesn't mean you won't like the new one. Is there a possibility of applying for your boss's old job yourself?

It's hard to say on the numbers given I know nothing about your industry. From their perspective, the number that matters isn't your current comp, but the market rate for the new role. I'm not sure how to assign a premium for knowing you. Also, they have to factor in the cost of all that travel, and the inconvenience of a semi-remote employee. From your side, you have to decide if the increase is worth more work and all the time away from your family and home.

wilked
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Re: Help, please, on new salary negotiations

Post by wilked » Thu Jan 26, 2017 1:19 pm

He who gives the first number, loses

Now, that is not really true and a very basic way of negotiating, but I think in general you are better to wait for his number. You found a middle ground on remote/office working (or at least are close). You seem to know the benefits, how could you not have a proposed salary?

My main question though is why you don't consider yourself a viable candidate to replace your boss if you are such a high performer in his group?

ved
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Re: Help, please, on new salary negotiations

Post by ved » Thu Jan 26, 2017 1:19 pm

So, you are asking for a 50% raise (122k to 180k), in addition to the travel and lodging charges. Assuming the apartment is $500 per month (bare minimum), and $500/round-trip travel, you are looking at 12*500 + 50*500 = 31k.
So, your compensation will be around $210k.

No harm in asking for this, but will you be able to justify this?

This is a (potentially long-term) lifestyle change. I don't know if you have experienced this lifestyle. Is your wife completely on-board with this? There will be times when you are out of town, and the kid is sick, running high fever at night. Will she be able to take care of the kid? Do you have support system nearby?

Also, flights get cancelled, missed (especially in the winter when roads could be bad, and in the summer when thunderstorms affect flights).
And when you get back home (on Wednesday night), you would have to get back to work (remote) on Thursday. That may get old with you, your wife & kids.

One suggestion I will give is, if you do take up this job, try to fly out early Monday morning (rather than Sunday night). I always felt that (and my wife agrees) that scheduling Sunday night flights mean that you will be "looking at the clock" from the afternoon itself - thus losing at least half of a precious day off.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Thu Jan 26, 2017 1:20 pm

czeckers wrote:Given that he is asking you to go with him and to either relocate or to do a very long commute, that makes starting the negotiation very easy.

"Boy, this is an exciting opportunity, but it would be a tremendous sacrifice for me and my family. What type of compensation do you have in mind?"

You could even add, "It would cost me at least x to relocate or y each month to commute, not to mention leaving the security of my current job"


I have made it clear--on the advice of a recruiter--that not only are they paying commuting and housing, but that it needs to be separated out from salary. Salary is salary. Ideally I would want it direct-billed to them. I don't need the reimbursement hassle.

Another friend told me to let him throw out the salary first...because, for all I know, he wants to double it, and I'd then be undercutting myself.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Thu Jan 26, 2017 1:20 pm

wilked wrote:He who gives the first number, loses

Now, that is not really true and a very basic way of negotiating, but I think in general you are better to wait for his number. You found a middle ground on remote/office working (or at least are close). You seem to know the benefits, how could you not have a proposed salary?

My main question though is why you don't consider yourself a viable candidate to replace your boss if you are such a high performer in his group?


He is the executive. I am his speechwriter.

wilked
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Re: Help, please, on new salary negotiations

Post by wilked » Thu Jan 26, 2017 1:27 pm

I had no idea speechwriters can make $180K :shock: Then again I really don't know anything about speechwriting.

It would seem reasonable that it's the type of job you could work remotely for some portion of your workweek, so I don't think you'll have an issue there. Beyond that, I would just say that you seem like you agree on basic terms, but if he could speak to his department and put together a full rough compensation package, including details such as time in the office and expensable items, you can review it with your family and be able to make a decision.

edit to add:
You have at least one comp near $180K!

Favreau, President Obama's head speechwriter, takes home an annual salary of $172,200, equal to that of the president's Chief of Staff.
Last edited by wilked on Thu Jan 26, 2017 1:29 pm, edited 1 time in total.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Thu Jan 26, 2017 1:28 pm

Let me add more detail.

I recently got a pretty sizeable raise. I will continue to get cost-of-living raises (around 3%) per year. However another large bump up in my current job is not likely for years.

I've become rather bored (if content) in current job. I am ready for a new challenge. I could stay, but don't think I should. This new position is not only more senior, but offers more intellectual enrichment. That's important to me.

Again, I have proposed this three-day thing as a start. Executives travel a lot. As it is, I only see him in person perhaps 30 percent of the time. The rest of the time, I work independently (mostly). I would foresee that eventually I will not be going down there as much. Who knows. I think I could manage it for at least a year.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Thu Jan 26, 2017 1:32 pm

wilked wrote:I had no idea speechwriters can make $180K :shock: Then again I really don't know anything about speechwriting.

It would seem reasonable that it's the type of job you could work remotely for some portion of your workweek, so I don't think you'll have an issue there. Beyond that, I would just say that you seem like you agree on basic terms, but if he could speak to his department and put together a full rough compensation package, including details such as time in the office and expensable items, you can review it with your family and be able to make a decision.

edit to add:
You have at least one comp near $180K!

Favreau, President Obama's head speechwriter, takes home an annual salary of $172,200, equal to that of the president's Chief of Staff.


My boss makes (or will make) well over $1m. Probably 1.5m. Of course, he's not the POTUS.

inbox788
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Re: Help, please, on new salary negotiations

Post by inbox788 » Thu Jan 26, 2017 1:59 pm

Of course they can afford it, it's a multi-billion dollar operation. The issue is with optics. Should they be spending that much? And with travel and housing costs, your costs are a lot more than someone in-town. But since they're paying a million dollar salary, it doesn't seem like one of those highly scrutinized operations or they're already dealing with the issue. As long as you stay under the radar, you won't have to publicly justify why you're worth so much, only to the CEO and board.

http://smartycents.com/articles/nonprofit-ceo-salaries/

High level government employee salaries are not a fair indicator of worth, since they're often limited while in service, but the perks and future job prospects are invaluable. At best, you should use equivalent positions as a floor on your salary. Also, the job titles don't always accurately describe the job, or the work.

Good luck.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Thu Jan 26, 2017 2:08 pm

inbox788 wrote:Of course they can afford it, it's a multi-billion dollar operation. The issue is with optics. Should they be spending that much? And with travel and housing costs, your costs are a lot more than someone in-town. But since they're paying a million dollar salary, it doesn't seem like one of those highly scrutinized operations or they're already dealing with the issue. As long as you stay under the radar, you won't have to publicly justify why you're worth so much, only to the CEO and board.

http://smartycents.com/articles/nonprofit-ceo-salaries/

High level government employee salaries are not a fair indicator of worth, since they're often limited while in service, but the perks and future job prospects are invaluable. At best, you should use equivalent positions as a floor on your salary. Also, the job titles don't always accurately describe the job, or the work.

Good luck.


Yes, good point. It will not be public. I don't think he's going to quibble over 20 grand, and I highly doubt he would expect me to make that kind of commitment for a 20% raise (so, 145k-ish). At the very least we will need to use some of that money to pay babysitters etc, at least for a bit. My kids are 10 and 13 and do stay home alone.

The lifestyle piece is the killer, it will not be an easy decision, even assuming we can agree on a number. I do now feel I need to let him propose something. If he can't, I will go with 180k and a willingness to come down a bit.

Their retirement contrib alone would be over 30k a year...WITHOUT required matching. Though I would still put in the 18k.

mayday23
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Re: Help, please, on new salary negotiations

Post by mayday23 » Thu Jan 26, 2017 2:30 pm

wilked wrote:He who gives the first number, loses


This blanket statement is not always correct. I'll give an example:

I had an IT Contractor working for me. We paid $95 per hour and she got $55 per hour from the recruiter (2,000 hrs x $55 = $110,000 per year).

She wanted to convert to perm and we wanted to convert her. We finally got budget for it and I asked her 2x what salary she wanted to make. She never got back to me.

I met with HR and they told me her range is $110K-$130K. We offer full benefits and a generous 401k match. Talking with my boss we decided to offer her 115,000. IMore than currently making, plus she has to pay for her own benefits now and has no 401k match or paid vacation time. I presented the offer and she wanted more. I could only go up to $120K at this point after getting signoff from HR and my boss.

If she would've told me she wanted $130K, I could worked with my boss earlier in the process to get his signoff on the upper part of the range. Since she decided to play the game, she lost out on a few K.

Back to the OP, I'd ask for $220K. Who knows what range he is thinking.

ved
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Re: Help, please, on new salary negotiations

Post by ved » Thu Jan 26, 2017 2:40 pm

mayday23 wrote:
wilked wrote:He who gives the first number, loses


This blanket statement is not always correct. I'll give an example:

I had an IT Contractor working for me. We paid $95 per hour and she got $55 per hour from the recruiter (2,000 hrs x $55 = $110,000 per year).

She wanted to convert to perm and we wanted to convert her. We finally got budget for it and I asked her 2x what salary she wanted to make. She never got back to me.

I met with HR and they told me her range is $110K-$130K. We offer full benefits and a generous 401k match. Talking with my boss we decided to offer her 115,000. IMore than currently making, plus she has to pay for her own benefits now and has no 401k match or paid vacation time. I presented the offer and she wanted more. I could only go up to $120K at this point after getting signoff from HR and my boss.

If she would've told me she wanted $130K, I could worked with my boss earlier in the process to get his signoff on the upper part of the range. Since she decided to play the game, she lost out on a few K.

Back to the OP, I'd ask for $220K. Who knows what range he is thinking.


She did not play the negotiation game properly.
Generally, the person that gives the number first, loses. If it is the candidate giving out the number, then that's the ceiling from which the negotiation only goes down. If the employer offers a number first, then that's the floor, and it goes up from there. However, there are strategies to go around these.

But, in your case, the candidate never responded to your question. Not giving a number doesn't mean not communicating. She should have said that, you know her performance and that she would work even harder because now she feels as part of the family, rather than an external vendor. So, given that she should have asked what a fair number would be. That's the start of the negotiation.

Maverick3320
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Re: Help, please, on new salary negotiations

Post by Maverick3320 » Thu Jan 26, 2017 2:45 pm

wilked wrote:He who gives the first number, loses

Now, that is not really true and a very basic way of negotiating, but I think in general you are better to wait for his number. You found a middle ground on remote/office working (or at least are close). You seem to know the benefits, how could you not have a proposed salary?

My main question though is why you don't consider yourself a viable candidate to replace your boss if you are such a high performer in his group?


Not always. Giving a high first number can "anchor" the future negotiations around that number.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Thu Jan 26, 2017 2:46 pm

mayday23 wrote:
Back to the OP, I'd ask for $220K. Who knows what range he is thinking.


This seems steep. I have documentation showing that 20% make 150-200k. So, if all else fails or they ask for my logic, I have two things to show them. If I ask for 220k, I have nothing.

I think this is why I need to see if he has a number is mind. There is a vacuum in the office for this position, essentially it does not exist. That works to my benefit. They don't have anything to compare it to.

I'm more worried about the set up than the money. I also have not thought about what my floor is likely to be.

I have heard that anchor term as well.

BW1985
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Re: Help, please, on new salary negotiations

Post by BW1985 » Thu Jan 26, 2017 2:52 pm

Maverick3320 wrote:
wilked wrote:He who gives the first number, loses

Now, that is not really true and a very basic way of negotiating, but I think in general you are better to wait for his number. You found a middle ground on remote/office working (or at least are close). You seem to know the benefits, how could you not have a proposed salary?

My main question though is why you don't consider yourself a viable candidate to replace your boss if you are such a high performer in his group?


Not always. Giving a high first number can "anchor" the future negotiations around that number.


Ofcourse it depends on the situation, but that can also put you out of contention for the role. If you don't know what their range is and you come in higher than what they're able to pay they could very well just move on. I've had it happen.
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BW1985
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Re: Help, please, on new salary negotiations

Post by BW1985 » Thu Jan 26, 2017 2:53 pm

Admiral wrote:
mayday23 wrote:
Back to the OP, I'd ask for $220K. Who knows what range he is thinking.


This seems steep. I have documentation showing that 20% make 150-200k. So, if all else fails or they ask for my logic, I have two things to show them. If I ask for 220k, I have nothing.

I think this is why I need to see if he has a number is mind. There is a vacuum in the office for this position, essentially it does not exist. That works to my benefit. They don't have anything to compare it to.

I'm more worried about the set up than the money. I also have not thought about what my floor is likely to be.

I have heard that anchor term as well.


If they force you to give the first number I would say $200k. You have documentation supporting $200k. You are also sacrificing a lot to work for them - all those hours you'd be spending traveling back and forth, others in that salary range likely don't do that.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

Maverick3320
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Re: Help, please, on new salary negotiations

Post by Maverick3320 » Thu Jan 26, 2017 2:58 pm

ved wrote:
mayday23 wrote:
wilked wrote:He who gives the first number, loses


This blanket statement is not always correct. I'll give an example:

I had an IT Contractor working for me. We paid $95 per hour and she got $55 per hour from the recruiter (2,000 hrs x $55 = $110,000 per year).

She wanted to convert to perm and we wanted to convert her. We finally got budget for it and I asked her 2x what salary she wanted to make. She never got back to me.

I met with HR and they told me her range is $110K-$130K. We offer full benefits and a generous 401k match. Talking with my boss we decided to offer her 115,000. IMore than currently making, plus she has to pay for her own benefits now and has no 401k match or paid vacation time. I presented the offer and she wanted more. I could only go up to $120K at this point after getting signoff from HR and my boss.

If she would've told me she wanted $130K, I could worked with my boss earlier in the process to get his signoff on the upper part of the range. Since she decided to play the game, she lost out on a few K.

Back to the OP, I'd ask for $220K. Who knows what range he is thinking.


She did not play the negotiation game properly.
Generally, the person that gives the number first, loses. If it is the candidate giving out the number, then that's the ceiling from which the negotiation only goes down. If the employer offers a number first, then that's the floor, and it goes up from there. However, there are strategies to go around these.

But, in your case, the candidate never responded to your question. Not giving a number doesn't mean not communicating. She should have said that, you know her performance and that she would work even harder because now she feels as part of the family, rather than an external vendor. So, given that she should have asked what a fair number would be. That's the start of the negotiation.


Psychologically speaking, again, this isn't always true. If robots did the bidding, perhaps - but we are dealing with people here.

http://www.pon.harvard.edu/daily/dealma ... otiations/

Making First Offers, the Anchoring Effect in Negotiations, and Negotiation Success

Subjects then were asked questions about their emotional state, such as whether they felt anxious during negotiation scenarios and whether they were satisfied with the outcome. The negotiators who made first offers felt more anxiety than those who did not – and, as a result, were less satisfied with their outcomes. Yet, backing up prior bargaining studies, those who made first offers did better in economic terms than those who did not.

sambb
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Re: Help, please, on new salary negotiations

Post by sambb » Thu Jan 26, 2017 3:03 pm

If you are serious about the new job, you eventually will have to move there to move up.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Thu Jan 26, 2017 3:16 pm

sambb wrote:If you are serious about the new job, you eventually will have to move there to move up.


There is no moving up. This job is the top.

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gunn_show
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Re: Help, please, on new salary negotiations

Post by gunn_show » Thu Jan 26, 2017 3:20 pm

Admiral wrote:
mayday23 wrote:
Back to the OP, I'd ask for $220K. Who knows what range he is thinking.


This seems steep. I have documentation showing that 20% make 150-200k. So, if all else fails or they ask for my logic, I have two things to show them. If I ask for 220k, I have nothing.

I think this is why I need to see if he has a number is mind. There is a vacuum in the office for this position, essentially it does not exist. That works to my benefit. They don't have anything to compare it to.

I'm more worried about the set up than the money. I also have not thought about what my floor is likely to be.

I have heard that anchor term as well.


"I think this is why I need to see if he has a number is mind."
This is step 1. If HE is asking you to join him, to move, to change your life... HE needs to throw out his offer. Especially given your history, there should be less "gamesmanship" to this from his side. Frankly, as others noted, I'm a bit surprised you've gotten this far with him in discussing the potential move -without- having any salary number put on the table yet. Kind of strange. At this point, from how you've written it, he needs you. Remember that, if true. He needs you... that is to your leverage benefit

Pre-steps are to ensure you have your anchor # (top range) and floor # (bottom range) ready to go, on paper as notes (for what I assume is phone negotiating b/w you and boss). I would do none of this in writing, at all. Zero. Only accept offers on paper, never transact yourself that way. Negotiating is ideally done in person, or at worst, on a 2-way call. Not a 1-way email.

Part of the pre-steps is for you to prepare your must-have, walk-away, floor numbers on the "setup" of the travel and T&E and all that. That absolutely is outside normal comp plan, is extra total comp package parts. Should have zero effect on salary, although to be fair, they may treat it that way (as others noted) since other candidates are likely local and will not have this annual cost basis. They may have to relocate someone though, if this is a tough to hire position, so you can use that as a counter point.

You obviously have great skills and high value, and a rich history with this senior executive - these are all buckets in your favor. Use the below link to add flavor and keywords to your negotiating pitch to fill in as needed. Good luck and let us know how it goes.

http://www.kalzumeus.com/2012/01/23/salary-negotiation/
Last edited by gunn_show on Thu Jan 26, 2017 3:25 pm, edited 2 times in total.
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gunn_show
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Re: Help, please, on new salary negotiations

Post by gunn_show » Thu Jan 26, 2017 3:21 pm

Admiral wrote:
sambb wrote:If you are serious about the new job, you eventually will have to move there to move up.


There is no moving up. This job is the top.


That's exactly what he (sambb) means. If this is your top potential job/career move... it is likely you will have to (actually physically) move at some point to get there.. and this appears to be that axis point for you.
"I love competition. And I want to win." R. Murdoch

leonard
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Re: Help, please, on new salary negotiations

Post by leonard » Thu Jan 26, 2017 3:35 pm

Admiral wrote:Background:

My boss, the second-in-command of a multi-billion dollar non profit, is leaving to take the job as head of another multi-billion dollar non profit in another state. A short plane ride but not drivable. I have worked closely with him for about 9 years. He asked that I come with him. I am the only one in the organization he has asked. My current position is very secure (he told me so) but I would have a new boss in a few months. There is a national search for this person so I have no idea who it will be, or if i will have a good working relationship with this person.

I told my boss--whom I love, and who clearly respects my work--that I am unable to fully relocate. After discussing with my DW, we agreed that I would propose an initial 3 days per week in office in the new job, the rest remote. This is a major sacrifice as I have youngish kids and my wife also works. Basically it would mean flying down on a Sunday night or Monday, staying two nights, and flying home. Not ideal (my current commute is ten minutes by bike) but it could be worse. Flight time is one hour, airports are 15 min drive on both sides. The new co. would be expected to pay for my housing (apartment, not hotel) and of course travel. The benefits are overall better at the new job. This is a more-senior job with more work. I would be, for all intents and purposes, as high as I am likely to go in my profession. I am age 45. (I expect to stop work in my mid to late 50s).


We talked about this and he was happy to hear my proposal, and thinks it is workable. He is the big boss but there is a comp committee, and he needs to look at the structure of the office before we begin real comp. negotiations.

Now, my question:

My current comp is $122,000. According to data from salary.com as well as my professional association, that is around the median for my industry, if not my specific duties. 20% of people in my general industry make $150-200k.

I am very good at what I do, and he values my work (clearly). There are a limited number of people who do what I do, and few that are as good (modestly speaking). None of them know him like I do.

Based on all of the above, I feel it is appropriate to ask for $180k.

It is a hefty bump, but my guess is very few people relocate (or partially relocate) for a 20 or 30% raise.

I have no idea what they can afford, but he is the chief, so presumably they have given him money to work with.

Does this seem out of whack?


Step one is for you not "to ask". Good negotiating usually has the other party go first, especially in this instance where you are being offered to switch jobs.

So, let him offer (the entire offer: salary, benefits, perks, etc), then figure out your counter from there.

WOW - evidently - there is a lot of profit to be had in non-profits according to the rest of this thread.
Last edited by leonard on Mon Jan 30, 2017 3:42 pm, edited 1 time in total.
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Re: Help, please, on new salary negotiations

Post by Random Poster » Thu Jan 26, 2017 3:57 pm

Admiral wrote:He is the executive. I am his speechwriter.


Then you should have some experience putting words in his mouth.

Accordingly, why don't you draft up a speech in which he accepts your offer (whatever that may be), and let him read it to you, and then both of you sign it?

EddyB
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Re: Help, please, on new salary negotiations

Post by EddyB » Thu Jan 26, 2017 4:06 pm

BW1985 wrote:
Maverick3320 wrote:
wilked wrote:He who gives the first number, loses

Now, that is not really true and a very basic way of negotiating, but I think in general you are better to wait for his number. You found a middle ground on remote/office working (or at least are close). You seem to know the benefits, how could you not have a proposed salary?

My main question though is why you don't consider yourself a viable candidate to replace your boss if you are such a high performer in his group?


Not always. Giving a high first number can "anchor" the future negotiations around that number.


Ofcourse it depends on the situation, but that can also put you out of contention for the role. If you don't know what their range is and you come in higher than what they're able to pay they could very well just move on. I've had it happen.


But does this sound like a situation where that is a realistic possibility? Pre-existing relationship, asked to move to a different area, etc. I can't imagine the OP's boss responds with "Well, I'll just move on to the next candidate."

BW1985
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Re: Help, please, on new salary negotiations

Post by BW1985 » Thu Jan 26, 2017 4:13 pm

EddyB wrote:
BW1985 wrote:
Maverick3320 wrote:
wilked wrote:He who gives the first number, loses

Now, that is not really true and a very basic way of negotiating, but I think in general you are better to wait for his number. You found a middle ground on remote/office working (or at least are close). You seem to know the benefits, how could you not have a proposed salary?

My main question though is why you don't consider yourself a viable candidate to replace your boss if you are such a high performer in his group?


Not always. Giving a high first number can "anchor" the future negotiations around that number.


Ofcourse it depends on the situation, but that can also put you out of contention for the role. If you don't know what their range is and you come in higher than what they're able to pay they could very well just move on. I've had it happen.


But does this sound like a situation where that is a realistic possibility? Pre-existing relationship, asked to move to a different area, etc. I can't imagine the OP's boss responds with "Well, I'll just move on to the next candidate."


Nope. That's why I said it depends on the situation. General negotiation strategy was being discussed.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

wilked
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Re: Help, please, on new salary negotiations

Post by wilked » Thu Jan 26, 2017 5:08 pm

All, I know that 'he who gives the first number' is an overgeneralization and not always true (as I said right after I wrote that). In most cases I do think it's true though, and especially in this case where he is being recruited.

To the poster who linked study showing that those that gave a number did better, there may be a bias in that study. It's a certain type of person that is comfortable giving the first number (probably biased to confident and good negotiators), whereas the less savvy might say "what do you think?" and take the first number given to them.

It's a decent debate, but I do think for a good negotiator anchoring doesn't mean much. What is important is having a basis for your number (whether it is the first number or a response) - market data, justification on your skillset, how you are going to make the company many multiples of that salary, and so on.

You do risk 'blowing it' by picking too high a number though. If this compensation committee is thinking $120-140K, and he offers up $200K as the first number, all this work of figuring out days in office / days remote becomes moot and the committee can simply say "wow, that is not even close. I don't see how we are going to make this work" and begin moving on.

If instead they were to give $130K as an offer and you wanted at least $180K, you can let them know that the offer is not high enough to significantly change your life. You then respond "market data XXX indicates someone in this position to make a median of $160K. Given my consistent high performance as demonstrated by 5 years of exceeding expectations noted in my annual reviews I would expect to be above this median". Now you responded without a counteroffer but rather a rationalization why their offer is a lowball. The committee can review that data and decide if they agree with your market data and personal data, and on and on.

NoGambleNoFuture
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Re: Help, please, on new salary negotiations

Post by NoGambleNoFuture » Thu Jan 26, 2017 6:04 pm

Random Poster wrote:
Admiral wrote:He is the executive. I am his speechwriter.


Then you should have some experience putting words in his mouth.

Accordingly, why don't you draft up a speech in which he accepts your offer (whatever that may be), and let him read it to you, and then both of you sign it?


HAHA this is awesome.

User avatar
ClevrChico
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Re: Help, please, on new salary negotiations

Post by ClevrChico » Thu Jan 26, 2017 8:27 pm

With both parents working and two young kids, you need to make this worth your while.

KlangFool
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Re: Help, please, on new salary negotiations

Post by KlangFool » Thu Jan 26, 2017 8:59 pm

Admiral wrote:
I am age 45. (I expect to stop work in my mid to late 50s).



Admiral,

Let me throw a curve ball at you. This will disrupt your family life. So, will this make a difference as to when you will retire? If yes, how many years? 5 years?? 10 Years?

Please note that when you make a lot more money, you pay more tax too. Hence, you take home pay may not increase that much. There is another twist to this too. Will you have to pay state income tax for both states? Where you live and where your boss is?

Is the pay increases large enough to make a difference to you?

Once, I took a 30% pay cut to move on to the next job. I do not need the extra 30% since it would not change my FI date that much. But, I get a better working life.

KlangFool

skjoldur
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Re: Help, please, on new salary negotiations

Post by skjoldur » Thu Jan 26, 2017 10:21 pm

You have lots of good cards in your hand.

Your boss is probably a bit addicted to your work. I bet he feels dependent on your ability to make him sound good. You are probably a key part of his ability to present himself successfully to the world. At his level, his public presentation and persona are probably wrapped up in his ego and psychology (not that this is bad, just seems like a natural thing). You are his secret weapon.

He will have a honeymoon period at his new job and the new org will not want to defy him on minor stuff like an additional salary that's a bit higher than it might be otherwise (a drop in the bucket).

You certainly should reject the feeling that your current salary is in any way related to the market value of the new job you are considering. This is a terrible, crippling psychological ploy that employers promote--arm yourself against it.

I suspect you are selling yourself short. You have a comp at $200K, and that's just the highest comp you could find, not likely the highest salary anyone in that role is getting. Someone is going to be an outlier, it might as well be you. If $180k is your number, you really can't start there. If you want to end up there, you have start higher.

Don't ask for money because you need it, you want it, your family needs it, the travel is hardship etc. Ask for it because that is your market value in this role and you will produce at that level (for him and for the organization).

He earns $1.5M himself. He's not going to be shocked or disappointed when someone makes a strong case for his or her own market value with evidence to back it up, he's a proven master of that game.

He probably is surprised that you have never pressed for a higher salary, and at his level, he is well aware that most people have no idea how to make a case for their market value, or are too timid to do it and that's just the way it is.

Good luck.

HopeToGolf
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Re: Help, please, on new salary negotiations

Post by HopeToGolf » Fri Jan 27, 2017 5:07 am

This is probably your moment to make a step change in your compensation. You are in a good spot, now go and maximize the situation for you and your family.

It appears you are underpaid. Consider using this opportunity to explore the local market as well. One question to ask yourself is if you got $175K locally (within a reasonable commuting time) is that better than $210K with the old boss. With the government a partner in your income (taxes will take a nice bite), you may decide that there is an option C (a new company and a new boss).

I cannot see too many employers voluntarily doubling compensation. You should consider what you want add a bit more and go to him. The number should be north of $200K. In light of your relationship with him, if he blows a gasket when he hears the number, hopefully you can play the "I've looked at the market and considered the uniqueness of the situation" card. The commute sounds difficult and that requires a premium and your boss has to decide if you are worth it. If locally you can only get $160K (almost a 30% raise) and your boss offers you $180K the situation is a bit more challenging.

In my field, the online information is garbage (and low). Recruiters were the only way I could get some sense of my value.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Fri Jan 27, 2017 7:07 am

KlangFool wrote:
Admiral wrote:
I am age 45. (I expect to stop work in my mid to late 50s).



Admiral,

Let me throw a curve ball at you. This will disrupt your family life. So, will this make a difference as to when you will retire? If yes, how many years? 5 years?? 10 Years?

Please note that when you make a lot more money, you pay more tax too. Hence, you take home pay may not increase that much. There is another twist to this too. Will you have to pay state income tax for both states? Where you live and where your boss is?

Is the pay increases large enough to make a difference to you?

Once, I took a 30% pay cut to move on to the next job. I do not need the extra 30% since it would not change my FI date that much. But, I get a better working life.

KlangFool


I would prob claim residence there for tax purposes. State tax is 2.5% higher, but City tax disappears so I come out ahead. I would figure that out. It would make a material difference in the day-to-day, could be an extra $2k/mo after tax.

In terms of FI, it's hard to say. Currently the plan is to stop work when second kid is out of college.
It's likely I would continue to work until then due to tuition benefits. In terms of my projections, a salary of 175-180 would increase my portfolio by a few hundred thousand versus what I make now by date of retirement. Of course, this is all based on expected market conditions. If in five years my portfolio is not the expected $1.1m but rather 2.0m, then that might be enough. That seems unlikely,

It's important to note that this is not only about money. I am rather bored in my current job. This is a new challenge. Would I take the new job for the same money? Of course not, based on the commute.

Admiral
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Re: Help, please, on new salary negotiations

Post by Admiral » Fri Jan 27, 2017 7:58 am

skjoldur wrote:You have lots of good cards in your hand.

Your boss is probably a bit addicted to your work. I bet he feels dependent on your ability to make him sound good. You are probably a key part of his ability to present himself successfully to the world. At his level, his public presentation and persona are probably wrapped up in his ego and psychology (not that this is bad, just seems like a natural thing). You are his secret weapon.

He will have a honeymoon period at his new job and the new org will not want to defy him on minor stuff like an additional salary that's a bit higher than it might be otherwise (a drop in the bucket).

You certainly should reject the feeling that your current salary is in any way related to the market value of the new job you are considering. This is a terrible, crippling psychological ploy that employers promote--arm yourself against it.

I suspect you are selling yourself short. You have a comp at $200K, and that's just the highest comp you could find, not likely the highest salary anyone in that role is getting. Someone is going to be an outlier, it might as well be you. If $180k is your number, you really can't start there. If you want to end up there, you have start higher.

Don't ask for money because you need it, you want it, your family needs it, the travel is hardship etc. Ask for it because that is your market value in this role and you will produce at that level (for him and for the organization).

He earns $1.5M himself. He's not going to be shocked or disappointed when someone makes a strong case for his or her own market value with evidence to back it up, he's a proven master of that game.

He probably is surprised that you have never pressed for a higher salary, and at his level, he is well aware that most people have no idea how to make a case for their market value, or are too timid to do it and that's just the way it is.

Good luck.


I think this is all absolutely correct, and I don't see him coming in with some ridiculous lowball offer. No one in their right mind would make this jump for a $25k increase before tax. We are already in the 33% bracket so any potential increase is really only 66% of its gross...and that's just federal.

KlangFool
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Re: Help, please, on new salary negotiations

Post by KlangFool » Fri Jan 27, 2017 8:22 am

Admiral wrote:
KlangFool wrote:
Admiral wrote:
I am age 45. (I expect to stop work in my mid to late 50s).



Admiral,

Let me throw a curve ball at you. This will disrupt your family life. So, will this make a difference as to when you will retire? If yes, how many years? 5 years?? 10 Years?

Please note that when you make a lot more money, you pay more tax too. Hence, you take home pay may not increase that much. There is another twist to this too. Will you have to pay state income tax for both states? Where you live and where your boss is?

Is the pay increases large enough to make a difference to you?

Once, I took a 30% pay cut to move on to the next job. I do not need the extra 30% since it would not change my FI date that much. But, I get a better working life.

KlangFool


I would prob claim residence there for tax purposes. State tax is 2.5% higher, but City tax disappears so I come out ahead. I would figure that out. It would make a material difference in the day-to-day, could be an extra $2k/mo after tax.

In terms of FI, it's hard to say. Currently the plan is to stop work when second kid is out of college.
It's likely I would continue to work until then due to tuition benefits. In terms of my projections, a salary of 175-180 would increase my portfolio by a few hundred thousand versus what I make now by date of retirement. Of course, this is all based on expected market conditions. If in five years my portfolio is not the expected $1.1m but rather 2.0m, then that might be enough. That seems unlikely,

It's important to note that this is not only about money. I am rather bored in my current job. This is a new challenge. Would I take the new job for the same money? Of course not, based on the commute.


Admiral,

So, why would you ask for 175K to 180K when it is not significantly large enough to make a difference in your life?? Would 200K to 210K be good enough?

<< It's important to note that this is not only about money. I am rather bored in my current job. This is a new challenge.>>

Just because you want to leave, it does not change the fact that it has to be worthwhile for you. Why won't you figure out the number that will be worthwhile for you and ask? You may or may not get it. But, you will not be regretting for the rest of your life for not asking. In the worst case, you do not get it and have to settle for less. This is what negotiation is about. You have to know your number. Aka, the number that you would like to get and say yes to without any hesitation.

What are you afraid of in term of asking for what you want? He makes 1.5 million per year. He is familiar with this kind of negotiation. He would not settle for anything less either.

KlangFool

KlangFool
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Re: Help, please, on new salary negotiations

Post by KlangFool » Fri Jan 27, 2017 8:56 am

Principle of Least Regret

http://thoughtcatalog.com/fatma-salahio ... the-least/

<<Whenever you need to make a decision, make the one you will regret the least.>>

Pick a number where you will be happy to say yes to. And, if you do not get it, you will be happy to reject the offer. The worst decision is to pick a number where even if you say "yes", you are unhappy. Then, you will lose for sure.

KlangFool

Admiral
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Joined: Mon Oct 27, 2014 12:35 pm

Re: Help, please, on new salary negotiations

Post by Admiral » Fri Jan 27, 2017 10:56 am

KlangFool wrote:
Admiral wrote:
KlangFool wrote:
Admiral wrote:
I am age 45. (I expect to stop work in my mid to late 50s).



Admiral,

Let me throw a curve ball at you. This will disrupt your family life. So, will this make a difference as to when you will retire? If yes, how many years? 5 years?? 10 Years?

Please note that when you make a lot more money, you pay more tax too. Hence, you take home pay may not increase that much. There is another twist to this too. Will you have to pay state income tax for both states? Where you live and where your boss is?

Is the pay increases large enough to make a difference to you?

Once, I took a 30% pay cut to move on to the next job. I do not need the extra 30% since it would not change my FI date that much. But, I get a better working life.

KlangFool


I would prob claim residence there for tax purposes. State tax is 2.5% higher, but City tax disappears so I come out ahead. I would figure that out. It would make a material difference in the day-to-day, could be an extra $2k/mo after tax.

In terms of FI, it's hard to say. Currently the plan is to stop work when second kid is out of college.
It's likely I would continue to work until then due to tuition benefits. In terms of my projections, a salary of 175-180 would increase my portfolio by a few hundred thousand versus what I make now by date of retirement. Of course, this is all based on expected market conditions. If in five years my portfolio is not the expected $1.1m but rather 2.0m, then that might be enough. That seems unlikely,

It's important to note that this is not only about money. I am rather bored in my current job. This is a new challenge. Would I take the new job for the same money? Of course not, based on the commute.


Admiral,

So, why would you ask for 175K to 180K when it is not significantly large enough to make a difference in your life?? Would 200K to 210K be good enough?

<< It's important to note that this is not only about money. I am rather bored in my current job. This is a new challenge.>>

Just because you want to leave, it does not change the fact that it has to be worthwhile for you. Why won't you figure out the number that will be worthwhile for you and ask? You may or may not get it. But, you will not be regretting for the rest of your life for not asking. In the worst case, you do not get it and have to settle for less. This is what negotiation is about. You have to know your number. Aka, the number that you would like to get and say yes to without any hesitation.

What are you afraid of in term of asking for what you want? He makes 1.5 million per year. He is familiar with this kind of negotiation. He would not settle for anything less either.

KlangFool


You are missing my point. I said a small increase (say 20 percent) would not be worth it. A $60k increase WOULD be worth it. Anyway I plan to ask for 200k if they do not offer it up. I spoke to the head of my prof association and he felt I was currently underpaid and said I should ask for 200 without a moment's hesitation.

That said, there are things in life more important than money. Intellectual fulfillment is high on my list. This job would be a real challenge, which I enjoy. One of course must weigh the inconvenience of it...and that's what the money is paying for.
The inconvenience is not worth an extra after-tax $1500 per month for us at this point. More than $3000 per month? More? Yes, that is worth it. That is a lot of money. We have kids in private school.

I can't make a decision based on some random-ass guess on whether it will allow me to hit FI a few years earlier. That's a fool's game.

ddurrett896
Posts: 651
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Re: Help, please, on new salary negotiations

Post by ddurrett896 » Fri Jan 27, 2017 11:13 am

Admiral wrote:Background:Does this seem out of whack?


What's the estimate your current boss will continue working? My fear would be you take the new job, travel and make more $ and when 1) he leaves or 2) budget is cut, you are on the list. His replacement might not think it's financially acceptable to continue paying for the commute.

Since you just received a sizable bump in pay, I'm going to assume you didn't increase your spending by such and living a comfortable life plus some. With that and most importantly small children, I'd stay. He will understand and it sound like his door will always be open.

KlangFool
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Re: Help, please, on new salary negotiations

Post by KlangFool » Fri Jan 27, 2017 12:08 pm

Admiral wrote:
You are missing my point. I said a small increase (say 20 percent) would not be worth it. A $60k increase WOULD be worth it. Anyway I plan to ask for 200k if they do not offer it up. I spoke to the head of my prof association and he felt I was currently underpaid and said I should ask for 200 without a moment's hesitation.

That said, there are things in life more important than money. Intellectual fulfillment is high on my list. This job would be a real challenge, which I enjoy. One of course must weigh the inconvenience of it...and that's what the money is paying for.
The inconvenience is not worth an extra after-tax $1500 per month for us at this point. More than $3000 per month? More? Yes, that is worth it. That is a lot of money. We have kids in private school.

I can't make a decision based on some random-ass guess on whether it will allow me to hit FI a few years earlier. That's a fool's game.


Admiral,

1) Congratulation on finding your number,

<< That said, there are things in life more important than money. Intellectual fulfillment is high on my list. This job would be a real challenge, which I enjoy.>>

2) To each its own. Some of us do not need a job to find our intellectual fulfillment.

KlangFool

qwertyjazz
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Re: Help, please, on new salary negotiations

Post by qwertyjazz » Fri Jan 27, 2017 12:44 pm

Your salary amounts are less than a rounding error in your bosses salary or amount of money the company makes. The other issue is job security - new CEO, only point of support you have in the new company
You might want to consider how to structure the job offer for security if possible
Good luck
G.E. Box "All models are wrong, but some are useful."

edge
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Location: Great Falls VA

Re: Help, please, on new salary negotiations

Post by edge » Fri Jan 27, 2017 1:35 pm

Well ya, wouldn't you put it on a corporate card?

Admiral wrote:
czeckers wrote:Given that he is asking you to go with him and to either relocate or to do a very long commute, that makes starting the negotiation very easy.

"Boy, this is an exciting opportunity, but it would be a tremendous sacrifice for me and my family. What type of compensation do you have in mind?"

You could even add, "It would cost me at least x to relocate or y each month to commute, not to mention leaving the security of my current job"


I have made it clear--on the advice of a recruiter--that not only are they paying commuting and housing, but that it needs to be separated out from salary. Salary is salary. Ideally I would want it direct-billed to them. I don't need the reimbursement hassle.

Another friend told me to let him throw out the salary first...because, for all I know, he wants to double it, and I'd then be undercutting myself.

BW1985
Posts: 1691
Joined: Tue Mar 23, 2010 6:12 pm

Re: Help, please, on new salary negotiations

Post by BW1985 » Fri Jan 27, 2017 1:43 pm

ddurrett896 wrote:
Admiral wrote:Background:Does this seem out of whack?


What's the estimate your current boss will continue working? My fear would be you take the new job, travel and make more $ and when 1) he leaves or 2) budget is cut, you are on the list. His replacement might not think it's financially acceptable to continue paying for the commute.


This is a very good point. If you follow him, your position now somewhat depends on someone else being there.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

Admiral
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Joined: Mon Oct 27, 2014 12:35 pm

Re: Help, please, on new salary negotiations

Post by Admiral » Fri Jan 27, 2017 1:46 pm

BW1985 wrote:
ddurrett896 wrote:
Admiral wrote:Background:Does this seem out of whack?


What's the estimate your current boss will continue working? My fear would be you take the new job, travel and make more $ and when 1) he leaves or 2) budget is cut, you are on the list. His replacement might not think it's financially acceptable to continue paying for the commute.


This is a very good point. If you follow him, your position now somewhat depends on someone else being there.


Seven-year commitment. Could he leave before then? Sure. Would he? Certainly not anytime soon.

Admiral
Posts: 863
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Re: Help, please, on new salary negotiations

Post by Admiral » Fri Jan 27, 2017 1:56 pm

KlangFool wrote: Some of us do not need a job to find our intellectual fulfillment.

KlangFool


Klang,

You are smarter than this asinine comment. I did not say I needed a job to find my intellectual fulfillment. I said this job was intellectually challenging. There is a major difference.

I welcome you comments, but not your judgments. If you can't refrain from them, then please don't add to this thread.

Thank you.

kithwang
Posts: 152
Joined: Tue Jul 22, 2014 8:35 am

Re: Help, please, on new salary negotiations

Post by kithwang » Fri Jan 27, 2017 2:09 pm

Can you ask for equity in addition to money? Doesn't hurt to try.

KlangFool
Posts: 6987
Joined: Sat Oct 11, 2008 12:35 pm

Re: Help, please, on new salary negotiations

Post by KlangFool » Fri Jan 27, 2017 2:26 pm

Admiral wrote:
KlangFool wrote: Some of us do not need a job to find our intellectual fulfillment.

KlangFool


Klang,

You are smarter than this asinine comment. I did not say I needed a job to find my intellectual fulfillment. I said this job was intellectually challenging. There is a major difference.

I welcome you comments, but not your judgments. If you can't refrain from them, then please don't add to this thread.

Thank you.


Admiral,

Your old boss is starting a new job in a new environment. And, people at his level has an employment contract. Aka, he will be paid X amount of money for Y number of years regardless of his performance. People at our level has no employment contract. You are taking a risk by going with him. Besides the pay and so on, you should be compensated adequately by taking the risk. You may even ask for a sign-on bonus.

<<I said this job was intellectually challenging. >>

Yes, you may like the job and you like the challenge. But, the point that I was trying to bring out is you may not want to show your overeagerness in the negotiation. Be balanced and centered while you negotiate.

KlangFool

new2bogle
Posts: 1097
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Re: Help, please, on new salary negotiations

Post by new2bogle » Fri Jan 27, 2017 3:29 pm

KlangFool wrote:
2) To each its own. Some of us do not need a job to find our intellectual fulfillment.

KlangFool



I agree with you on that KlangFool. I enjoy your contrarian posts.

inbox788
Posts: 4142
Joined: Thu Mar 15, 2012 5:24 pm

Re: Help, please, on new salary negotiations

Post by inbox788 » Fri Jan 27, 2017 4:22 pm

You're a high performer and a known entity, so worth a big increase, but don't price yourself out of the market where they could find someone else for far less. One thing you haven't discussed is what is your move price? Is there a price where you'd move the family, say $300k/year? Or how much does your spouse make and what type of work? What if they provided $150k plus a comparable job for spouse? Or a 1 year spouse salary bonus to give her time to relocate and find a job? And if you're making a big sacrifice, see about negotiating a guarantee of 1 year salary or more if things don't work out.

skjoldur
Posts: 125
Joined: Thu Sep 25, 2014 3:11 pm

Re: Help, please, on new salary negotiations

Post by skjoldur » Fri Jan 27, 2017 4:47 pm

Admiral wrote:. . .and I don't see him coming in with some ridiculous lowball offer. No one in their right mind would make this jump for a $25k increase before tax.


I would suggest a slightly different approach to thinking about this. I think it's very likely he will give you a "lowball" offer. He already knows that you do not make a big fuss about compensation.

You are anticipating some kind of generosity from him or the notion that he will try to put himself in your shoes and think about what would be good for you. That is not negotiation, that is 'hoping.'

His mental model of what is going on is probably quite different. He wants you to come, but all things being equal, he has no incentive (yet) to offer you a lot of money, or to figure out the maximum he could get away with paying you.

Once you have the experience of hiring or employing lots of people, you quickly learn that most people are complete doormats when it comes to compensation and that a few people 'get it' and are savvy about presenting their own case. The latter type get paid more, the former get paid less. You don't randomly offer the doormats a bunch of extra money unnecessarily - not out of any malice or ill-will or nefariousness: it's just that money is always tight and if people are happily working away and not making a fuss, there is no need.

You will probably have to actively shift his view of you by making a firm (but friendly) case for your market value. If you do this properly, he will actually have to go to the compensation committee and ask for more money than he wants to pay you, and he will be a little irritated about it, and he will have to use up a tiny bit of his political capital that he could spend on other things.

Good luck

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