“This climate is a salary negotiation game changer. Countering salary offers won’t be nearly as effective as it once was,” says Ginny Clarke, CEO of Talent Optimization Partners L.L.C. and author of Career Mapping: Charting Your Course in the New World of Work (Morgan James Publishing; $17.95). “Savvy executives now need to pursue long-term value over short-term income to achieve meaningful negotiations.”
With rising healthcare costs, uncertainty around Social Security, and continued job market volatility, Clarke says that benefits that leverage or protect income often prove more valuable than the salary itself. She advises executives to seriously consider the following:
Stock options: This benefit authorizes the purchase of stock in the employer company over a set period of time for a designated price. Research the details of the stock option grant and specific stock option plan. Request options under the most favorable exercise terms available. Vesting is the speed with which you are entitled to a larger percentage of those benefits when you leave the company. Ask for an accelerated vesting schedule (for example, vest over five years, or 20% per year).
Pensions or Retirement Plans: The 401(k) and 403(b) are standard company-offered retirement plans, and generally offer broad investment options and flexible conversion terms. Push for greater employer contributions or accelerated vesting adjustments to qualify for pension. Older professionals should give thought to early retirement options in case of a company reorganization, downsizing, merger, or acquisition.
Noncompete clauses: These can restrict an employee’s ability to work for a competitor or company in a certain industry. In lieu of a noncompete clause, ask if a less extensive nondisclosure or nonsolicitation clause can suffice. Nondisclosures prohibit an employee from divulging proprietary information to an unauthorized third party. Nonsolicitation clauses forbid an employee from soliciting customers or employees from the former employer.
“Focus on narrowing the scope of whatever you sign,” says Clarke. Seek to limit the terms of the agreement in length, geographic size, definition of industry, work role, and prohibited work responsibilities. Consider consulting an attorney to make sure you know what you are signing.
Severance packages: While most packages are issued when an employee is let go (unless terminated for cause), negotiate receiving this compensation if you resign after a certain tenure of service or after a change in management due to an acquisition, merger, or divestiture. Weigh the importance of negotiating the severance amount; extended health benefits; the payout of commissions, bonuses, and vacation time; post-employment exercise period extensions for stock; or pension-vesting modifications.