Negotiating executive compensation requires a strategic and professional approach to ensure that you receive the best offer from your new employer. 

Career advancement, salary increases, and the overall compensation structure are just some of the factors that can be negotiated. Additionally, understanding the components of executive compensation, such as annual base salary, stock options, and benefits, is essential to negotiating the best deal. It is also important to consider relocation and travel preferences, if applicable.

With the right mindset, preparation, and strategy, negotiating executive compensation will result in you receiving the best offer for you.

Key Components of Executive Compensation

Executive compensation comes in many forms, and each component plays a critical role in negotiating a fair compensation package. The typical components of a technology executive compensation package include:

  1. Base salary: This is the fixed amount of money that an executive receives as a regular paycheck.
  2. Annual bonus: This is a performance-based bonus that an executive receives at the end of the year, based on the company’s financial performance.
  3. Stock options: These are the rights to purchase company stock at a fixed price, which can be exercised at a later date.
  4. Restricted stock units (RSUs): These are shares of company stock that are granted to an executive but are subject to certain restrictions, such as a vesting period.
  5. Long-term incentives: These are performance-based incentives that are designed to encourage executives to achieve long-term goals.
  6. Retirement benefits: These may include a 401(k) plan, pension plan, or other retirement savings plan.
  7. Health and wellness benefits: These may include medical, dental, and vision insurance, as well as other wellness programs.
  8. Perks: These may include company cars, executive assistants, and other benefits designed to make an executive’s life easier.
  9. Sign-on bonus: These bonuses are typically a one-time payment and may be structured as a lump sum or paid out over a period of time to attract top talent and compensate executives for the risk associated with leaving their current position and joining a new company.

Overall, the components of a tech company executive compensation package are designed to attract and retain top talent while also providing incentives for performance and long-term success.

In negotiating an executive compensation plan, each component is important and relevant. Candidates should consider each piece of the compensation package independently and engage in open and honest conversations with employers about expectations and opportunities.

Avoid Being Undervalued

When it comes to executive compensation negotiation, it’s crucial to ensure that you aren’t undervalued. Being undervalued can result in loss of income and decreased job satisfaction. Fortunately, there are strategies you can use to avoid being undervalued and to negotiate a fair compensation package.

In this article, we’ll explore some of the ways in which executives can protect themselves from undervaluation and secure the compensation they deserve. Let’s dive in.

Determine your salary requirements and any must-haves.

Before entering into any negotiation, it’s important to determine your salary requirements based on market research, your skills and experience, the industry you work for, your location, etc.

To determine your salary expectations, start by researching the average pay for your role and experience level in the industry, location, and company you are applying to. Gather data on the financial stability of the company, the level of responsibility, and the required skills for the position. 

Once you have a range in mind, define your must-haves. Must-haves may include items such as stock options, sign-on bonuses, or relocation assistance. Determine the financial value of each item and prioritize them based on their importance to you.

Articulate the value you’ll bring to the company.

Prior to negotiating compensation, you need to get clear on and be able to articulate the value you’ll bring to the company. This requires a deep understanding of the company’s goals and objectives, as well as a clear plan for how you will add value. By taking a strategic approach, you can demonstrate your value to the company and position yourself for success in negotiating your compensation package.

Thoroughly consider non-salary compensation.

Executive salary negotiation is not the end of the compensation conversation. Non-salary components can significantly impact an executive’s quality of life, satisfaction, and work output.

Some common non-salary components that make up an executive compensation package include health benefits, retirement plans, stock options, bonuses, remote work options, travel perks, educational opportunities, and personal development allowances. Thoroughly considering these benefits is crucial, as they can complement your lifestyle, responsibilities, and the time you can devote to the company.

How to Ask for What You Want When Negotiating Executive Compensation

Executive salary negotiation can mean a significant boost to your financial future, as well as your satisfaction with your new role.

To help you navigate this process, I recommend a simple strategy to use when negotiating your compensation, which includes understanding the components of a fair compensation package, knowing your worth in the market, identifying negotiable components, and building rapport with your hiring manager.

By following these steps, you can increase your chances of securing a strong compensation package that aligns with your goals and responsibilities.

1. Do not accept or reject the first offer immediately.

When it comes to negotiating executive compensation, the initial offer should not be accepted or rejected outright. You should always take at least one business day to evaluate an offer, considering how the job compares to your ideal target job, as well as what you want for a compensation package. You want to evaluate the TOTAL offer.

2. Give them a timeframe for when you’ll respond.

After receiving an initial offer from the hiring manager, it is important to review it thoroughly and assess whether it’s your heart’s desire based on all the work you’ve done to find and land your right fit role. Once you have done this, it is time to ask for the offer in writing before countering. Once you have the offer in writing, state the need for time to review it and deliver a response.

When communicating your timeframe, be clear and specific about how long you will need. For example, you might say, “Thank you for this opportunity. I want to take time to consider your offer before I respond. I’ll get back to you on [give them a day or date].” This will provide the hiring manager with a clear and reasonable expectation of when they can expect to hear back from you.

3. Take a step back and ask yourself these questions.

    • Do I need more information? Whom do I need to talk to? (Hiring manager? CEO? Your potential new team? Someone else?)
    • Do I want more money? Base salary range? Bonus? Or equity? Get clear about your number.
    • Do I want something else? Training? Equipment? Options for company stock? Time off? Additional benefits? Something else?

4. Have a compensation conversation and make your decision.

NOTE: If you need more information, ask for that first.

Once you get all the information you need, THEN ask for money. You might say, “Based on my value and what I will contribute to your organization, I was hoping for $XXXK.” Pause and wait for their response. Possibly follow up with, “Is there anything you can do?” Wait for their response.

Once the money is settled (as in, you get their “this is the best we can do” offer), ask for anything else.

Weigh the financial benefits against other elements like company culture and growth opportunities. This helps you make an informed decision that meets both your short and long-term goals.

Finally, make your decision, knowing you have received the best offer for you.

This approach has worked for my clients and for me, time and again.

I’d love to hear what has worked for you. Please share below.

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