Question
I am a Product Manager at a small company with dream of going IPO. My compensation consists of base salary, bonus, and stock options, all of which is pretty standard. Recently a former manager I had worked for moved to another company to become their director. He called me and wanted me to come and help him out. All the interviews went well and I received an offer from HR. The offer was a joke. They offered me a $2,000 raise, 750 stock options, and $10K sign-on bonus. Do you think that is fair? I want to tell them, if you really want me, PAY me!
I never applied for the job, they came looking for me knowing full well how much I was making. Do you think this is a standard HR ploy to try to get you to come as cheap as they can get? I was actually offended, especially when the director told me that he will be able to make it worth my while. I have not decided to take or reject the offer. But I am inclined to reject it.
My question is, when a company comes to you asking you to work for them, shouldn’t they be prepared to make it worth your while before they waste your time? Thank you.
Nick’s Reply
Should they have been more aggressive because they came after you? Probably. But it’s entirely possible the HR department has no idea the manager approached you first. The offer you’ve been given could be a standard offer. But, you can’t think about job offers in terms of what’s “fair.” There’s no referee who slaps players with penalties for rude behavior in this game. Participants take their shots, and if they do something truly stupid, word gets around and that makes it difficult for them to keep playing the game.
Pay me!
It may help you negotiate the kind of deal you want if you can find out why they made the offer they did. Your former boss could be a big help here. Without indicating your dissatisfaction with the offer, you might ask him why it’s “structured the way it is.” (You may learn he hasn’t seen the actual terms of the offer yet.) This is a good way to open a negotiation — and that’s the only way you’re going to find out whether they’re willing to spend what you think you’re worth. This is one way to say “Pay me!”
Choose the dance.
If this company has wasted your time, you might want to consider whether you contributed to the situation. There are things people can do when they’re approached by an employer the way you were. Usually, the person being recruited is so flattered and excited that they don’t realize that the dance doesn’t change just because the other party asked you. Indicate you’ll dance but only if it’s your kind of dance — or pay. Choose the dance you step into because it’s still up to you to make yourself attractive when the music starts — and to control what happens afterwards.
Keep perspective.
Unless you’re a star, remember that exorbitant compensation packages are rare. Maybe your expectations aren’t exceptional, but if you’re going to say “Pay me!” you must indicate that up front. A company that recruits you should be ready to reward you for saying YES, but they may also just be filling headcount. An indication that they want you doesn’t imply they’re willing to pay a lot. Read on: you might have been able to find this out sooner.
Control the agenda.
Your agenda is to land a great job with great compensation. Lay down some ground rules (especially if they approach you first) before you interview. For example, when they first call you, ask for a detailed idea of the job on the phone.
- Find out what it is about you that they want so much.
- Can you meet with key members of the team that wants to hire you?
- Who would you like to meet?
- What information about their business do you need to know?
- What kind of salary do they have in mind? (For suggestions about to say “Pay me!” tactfully, see Fearless Job Hunting – Book 9: Be The Master of Job Offers.)
Set a mutually acceptable deadline for an offer/decision from them. If they’re in hot pursuit, they’ll go along with much of what you request if it’s reasonable. If this is a run-of-the-mill recruiting effort, you’ll find out soon enough. Better to know now than after you’ve invested a lot of your time.
State your requirements.
When you assume the employer has an idea of what it will take to hire you, you’re wasting your time already. It’s not uncommon for an old boss to call with an offer of a job. Usually that doesn’t mean much more than when the company’s recruiter calls.
Chances are, your old boss will not really be much in the loop when it comes to the offer itself, and especially if he’s new to the company. Set your requirements as early as possible: “Our discussion of compensation would have to start in the $90K-$100K range for the base. It would have to include a signing bonus, and any stock options would have to represent an improvement over what I’m holding now. If that’s in your range, let’s talk. If it’s not, no hard feelings.”
Do regular “level checks.”
I used to know a guy at IBM who always used that expression. It kept him out of trouble. When the interview process is under way, stop and re-state your agenda and expectations. Make sure everyone’s on the same page, or on the same level. During the hiring process, it’s common to get passed off from one department to another. Don’t assume anyone has shared your requirements with anyone else. That’s your responsibility.
Demonstrate your value.
I won’t get into this in detail here because I’ve covered it in my articles here on Ask The Headhunter. It’s still up to you to show the employer why they should hire you, and how you’re going to deliver profit to their bottom line. Being pursued to do a job is not much different from being pursued as a potential spouse: the pursuer can lose interest pretty quickly if you’re not producing sparks that will keep their interest.
My best advice: treat an employer who’s pursuing you as you would one you’re pursuing. The best matches are made when both parties are enthusiastic and candid about their goals from the start. If you kick back and trust flattery, you’ll lose.
On the other hand, some employers are really out to get what they can for less, and they count on the job seeker’s inexperience or reluctance in negotiating. Learn how to say “Pay me!” so they’ll want to — and to avoid wasting your time!
Ever get an offer that was a joke? Was it because you mishandled the negotiation, or because the employer was trying to pull a fast one? What’s the best way to avoid such a quandary?
: :
The letter writer was offered a raise, stock options and a bonus. Not every job offer includes these, so I can’t possibly see how the offer is an insult.
If the new company is doing well, those stock options could become very valuable.
I don’t know the letter writer’s current compensation. The raise and bonus may very well be barely a percent or two improvement.
Leaving a good position is difficult. It should be worth one’s while to make the change.
I see two paths forward: decline the offer or counter with what will make it worth the bother.
Being offered a raise and a bonus is no reason to feel insulted. However, if they’re not big enough you don’t have to move.
@Mike L: I agree. Without knowing more about the O.P.’s current compensation it’s hard to make a judgment. My focus is on the issues surrounding the decision. I was struck by how, despite the O.P.’s strong negative reaction, the O.P. did not immediately reject the offer. I admire the pause to consider carefully. One should only very rarely make such a decision quickly.
As for the value of stock options, I’ll offer this:
https://www.asktheheadhunter.com/12446/job-offer-stock-options
I’m not in an industry that typically offers stock options. Your article makes a lot of sense. Thank you for the education!
There are many things that one needs to look into when deciding whether to move to a new job and company or to stick with the status quo.
– Is the move a lateral one or does it include more responsibility?
– Does it provide for more growth?
– Is the company an established one? Or is it new to the industry?
– Is it in the same industry or a different one?
– Is the dream of an IPO something that is a truly achievable goal for the current company or does it appear to be a fantasy dressed up in powerpoint slides and big talk?
– What is the culture like at the current company as compared to the potential new company?
– What is the price volatility of the stock for the potential new company?
– There are many other questions that can and should be asked …
Without knowing the industry, geographical location, level of experience and current compensation it is not possible to determine if the offer on the table “is a joke” or not.
If the current salary was $100,000 then a $2000 salary bump would be a 2% increase in base pay. If the current salary was $200,000 then the increase would be a 1% increase in base pay. Some folks would say that a 1% or 2% salary bump is an insult. While others would say that in the world and economy that we are currently living in, any increase in salary should be welcome if one is able to get a new position elsewhere. Bonuses are nice to have but are not guaranteed depending on how the company calculates them. Stock options are nice to have but depending on the market, they can quickly end up underwater and worthless.
==
Way in my past, I had been offered a position which meant a pay cut if I accepted the position. Quite a number of folks I discussed the offer with told me that I should not accept the position while others said that I would make up the pay cut ove time from better growth opportunities at the new company. In the end I accepted the offer. The salary recovered. The opportunities changed and grew. Then due to market forces I ended up getting pushed out just as the great recession hit. I had been seriously thinking about moving on under my own power due to many things, but ended up out due to a RIF before I left on my own.
Only the OP can determine if the offer is correct for them at this point in time in their career.
I have found that companies with growing sales are much happier places to work than companies that are stuck in an earnings rut. If the new company is a fast grower, I would go with them for the same money if the opportunity for advancement is clear.
@Ken and John:
Good suggestions about judging a company before taking an offer. You might find this useful:
https://www.asktheheadhunter.com/16542/4-reasons-to-reject-or-accept-a-job-offer
There are indeed good reasons for taking an offer where the money isn’t the main factor!
As a retired investor and executive i can assure you that , to anyone under 50, stock options are a tool to convince you to work for less in a fools bet that you will cash out later.
Google “ preferred stock “ to understand.
Early in my career , by the Creator’s Grace , a mentor taught me ( age 33)
“ If you think you are in the plan , you aren’t in the plan. If you are in the plan, you KNOW you are in the plan”
A lottery ticket is a better bet ( hyperbole )