Evaluating Your Real Compensation Package

Knowing what you're worth can helpsecure your family's financial future

be wary of signing noncompetition agreements that will prevent you from working for competing firms, and nonsolicitation agreements that prohibit you from soliciting the company’s customers or employees. “If you do sign either of these, see what else you can get in exchange for them,” says Lanza, noting that these restrictive covenants are so important to some industries that firms should pay a price to have you sign them. He suggests asking for additional salary, increased severance, or payment during the period of the restrictive covenant.

KEEP THINGS IN PERSPECTIVE
Though Robinson-Tingue took a cut in pay when she took her new job, she calls her benefits package phenomenal: full medical, dental, life insurance, disability, flexible spending account, 403(b) employer sponsored retirement plan to which the company contributes 7% of her salary, five to six weeks of vacation, and 20 days a year for sick time. The reality is, to get a compensation package similar to Robinson-Tingue, you’ll have to search for a company that values you enough to make you happy.

“Truth is, if the company is cutting back benefits, you may not be able to do anything,” says Bayer. “But the best thing is to keep yourself marketable, keep skills up-to-date, be active in professional organizations, take classes, and attend seminars. The whole idea is to keep yourself desirable, so you can leverage your position and have more power to negotiate for what you want.”

WHAT SHOULD YOU ASK FOR?
When negotiating your real compensation package, keep the big picture in mind. Compensation is much more than a paycheck. “Some people focused on salary, and once they lost that $100,000 job, they didn’t have much else. Some didn’t have much severance either,” says Alexander B. Williams, a CFP with the Financial Network in Brookfield, Connecticut.

For your package, Williams says, “You want a foundation — major medical, disability, dental, and life insurance, plus long-term care. You need to protect what you have. Figure out what your employer can provide and what gaps exist and what you’ll need to make up the difference.”

Make certain that your severance package is clearly spelled out in your employment contract. It should guarantee you payment of salary (and anything else you can lobby for) in case your company is bought out or merges.

Second, you want to maximize wealth building. Profit sharing, 401(k), stock options, and company pensions are some vehicles to help get you there. However, if there’s one lesson to learn from the Enron debacle, your portfolio should be diversified. “Don’t load up on company stock,” says Williams.

Third, look for ways to minimize taxes. A retirement plan like a 401(k) has its tax advantages, so do 529 College Savings Plans where you can save for your child’s education.

Fourth, perk your package up with flexible benefits, like flextime or other low-cost concessions that will increase your productivity and job enjoyment.

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