Salary negotiation is often one of the most difficult conversations to have, and having the negotiation skills to succeed is important. If you are interviewing for an executive role, you need to learn how to negotiate a job offer and compensation package at your level.
Executive compensation, also known as executive pay, refers to a comprehensive remuneration package exclusive for business leaders, c-levels roles, senior management and executives. It consists of both financial incentives and other non-financial benefits offered to attract and retain senior-level executives.
Salary and bonus are always top-of-mind when negotiating compensation packages. While this is true, there are other remuneration and benefits that you might find more valuable than having a higher salary. More often than not, your employer will be more open to discussing these types of rewards as they are more flexible and can benefit both you and your employer.
6 executive compensation packages you can negotiate for
Typically, the executive compensation package consists of four distinct components:
- base pay
- health and retirement benefits
- annual incentives
- long-term incentives
Below are some examples of a compelling executive compensation package you can ask or include in your salary negotiation with your hiring manager.
1. stock options and equity
Stock options or equity shares are a fairly common financial incentive for high-level top executives. Employee stock option is an example of what you can negotiate to include in your compensation package.
The stock options give you the right to buy shares at a set price within a specific time period. You don’t actually own the shares, but you have the right to buy them. Equity is another word for shares, which are directly allocated to you. You can start earning dividends on those shares, but may not be able to sell them immediately. Most companies have a “divesting” period that restricts you from selling the shares straight away. This measure is designed to protect the company’s finances. If you leave the company before that period, you may need to forfeit the earnings from those shares.
Stock options and equities are good rewards to negotiate as they are very flexible. You can align on the type of shares and amount that you wish to purchase or receive.
Employers tend to favour these types of locked-in incentives as they serve to retain their staff for a longer period of time, since they would need to remain an employee to keep the shares. Besides promoting company loyalty, these reward schemes can also encourage strong performance — the better you and your team perform, the better the company’s results will be. This in turn leads to higher share prices, thereby boosting the value of your equity or options.
So if you’re negotiating with your employer, have a discussion with them about how having stock options and equity in your remuneration package can drive your commitment to the business’ performance.
2. exclusive memberships
There may be some memberships for trade associations and industry bodies that your employer is willing to fund.
When negotiating, you can bring evidence to show that such memberships are needed to grow your network and make new connections. If you are in a sales-related role, this would be easier as it could lead to more sales and higher revenue.
Private members’ clubs are more likely to include those with higher incomes and in more senior roles. These clubs are very exclusive and by-invite only, which means that you’ll likely have air time with some of the most important people from government bodies or C-level executives of other companies and industries. An employer would recognise this as a good opportunity to increase inter-industry or multi-industries collaborations, which would elevate their company’s brand positioning and increase operational efficiency in the long run.
3. relocation or retirement packages
Another popular type of reward is a relocation package for senior executives, although it’s only relevant if you are moving to another country or city to take on a new job.
You can normally negotiate a lump sum payment to help cover the cost of moving your possessions to another location, and putting a deposit down on an apartment. You may even be able to negotiate travelling costs for you and your family. The further the distance is away from your current home, the easier it will be for you to negotiate.
A retirement package is most commonly known as a company pension. With increasing life expectancy, we would need more money for retirement, so this can potentially be a very useful reward. The funds for this package are usually contributed by both your company and yourself, as joint contributors. If you are close to retirement and do not have an adequate company pension in place, you could have a stronger case for negotiating a new retirement package.
4. additional leave days
A benefit that is growing in popularity is extra annual leave as people start prioritising work-life balance more, especially as they get older. Once you have been told the number of annual leave days that you’re entitled to, you can try to negotiate for additional leave.
While the objective is to get more paid leave, you may still be happy with some unpaid leave on top of your normal annual leave. This would be especially important if you live away from your family and would like to make a trip back to visit them during the summer or winter holidays. You could also ask for a sabbatical for every two years that you remain employed in the company. This can typically range anywhere between one month and six months, although in practice, only the most generous employers will pay for such a benefit.
Given the high-stress role and long hours you are expected to work, you can tell your boss the additional leave days allow you to take some time out of the office to recharge your energy.
Some executives take a sabbatical to learn new skills or gain qualifications, which not only can enhance their performance at work, but also ensure they stay relevant and competitive. Even spending the time to travel broadens the mind, and can lead to you coming back to the office with new and creative ideas. Just make sure you explain clearly to your boss why you would want a sabbatical so that they can offer the support that you need.
5. travel allowance
Commuting into the office every day costs money and it usually comes out of your pocket, unless you have a travel allowance.
This could be a fixed sum on top of your normal salary, or a lump sum to lease or buy a car. Travel allowances are fairly common for C-level executives. If you fail to agree on your salary level, a travel allowance can help make up your compensation package. You can argue that having a car for work allows you to get into the office and meetings quicker, which would allow you to do more work in the office or take more meetings.
While a more senior title has no monetary benefit. it is still a useful and meaningful reward. Adding “senior” to your title or “executive” raises your status among your colleagues and peers within the industry. In the Asian context, a more prestigious title can help you open more doors and meet new people. It is especially important during networking events or trade association meetings.
Furthermore, if you choose to leave your current role, a higher title could also help you negotiate for a higher remuneration package. For example, a senior sales executive sounds much better than a sales executive when it comes to negotiating a better package from your new employer.
When negotiating your executive remuneration package, always think creatively about how you can get more value out of it instead of just talking about the salary.
get paid what you deserve
It is important to do market research on the current salary level for your role or with similar positions before you start bringing up these compensation demands to your employer.
For example, start-ups and SMEs are more likely to offer equity as compared to multinational companies. If you’re required to travel frequently, then make sure that the company offers adequate travel allowances for meals, insurance, hotel as well as incidental expenses such as tips and gratitudes.
One proven key to a successful negotiation strategy is to know the value that you can bring to the company before you start negotiating for more benefits. Whenever you discuss added benefits with your employer, talk about how it would benefit them instead of you. This will not only help increase your chances of receiving these additional compensations but this is also viable to you having a higher lifetime earnings.
If you need help with finding out what your base salary should be, check out the Randstad Salary Calculator. In just under 2 minutes, you’ll find out how you rank against your peers with similar skills and work experience from the same industry. Your personalised report will benchmark your base pay and fringe benefits against other talent with similar remit and profiles, giving you the ammunition you’d need for your executive salary negotiation process.
Reach out to us if you need guidance on how to negotiate for a more robust remuneration package. Our specialised consultants who have the expertise in executive search solutions have first-hand insights on salary benchmarks from our clients and can help negotiate your salary on your behalf.