15 Rules for Negotiating a Job Offer

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How to Negotiate A Job Offer

Mod Note: Throwback Thursday: this post originally went up on 3/18/14.

Mod Note (Andy):This is being reposted with permission from HBS professor Deepak Malhotra

Hi Andrew, In case this is of value to WSO, my HBR article on "15 Rules for Negotiating a Job Offer" just went online. I thought it may be of interest to your readers/members/visitors.

Job-offer negotiations are rarely easy. Consider three typical scenarios:

  • You're in a third-round interview for a job at a company you like, but a firm you admire even more just invited you in. Suddenly the first hiring manager cuts to the chase: "As you know, we're considering many candidates. We like you, and we hope the feeling is mutual. If we make you a competitive offer, will you accept it?"
  • You've received an offer for a job you'll enjoy, but the salary is lower than you think you deserve. You ask your potential boss whether she has any flexibility. "We typically don't hire people with your background, and we have a different culture here," she responds. "This job isn't just about the money. Are you saying you won't take it unless we increase the pay?"
  • You've been working happily at your company for three years, but a recruiter has been calling, insisting that you could earn much more elsewhere. You don't want to quit, but you expect to be compensated fairly, so you'd like to ask for a raise. Unfortunately, budgets are tight, and your boss doesn't react well when people try to leverage outside offers. What do you do?

Each of these situations is difficult in its own way--and emblematic of how complex job negotiations can be. At many companies, compensation increasingly comes in the form of stock, options, and bonuses linked to both personal and group performance. In MBA recruitment, more companies are using "exploding" offers or sliding-scale signing bonuses based on when a candidate accepts the job, complicating attempts to compare offers. With executive mobility on the rise, people vying for similar positions often have vastly different backgrounds, strengths, and salary histories, making it hard for employers to set benchmarks or create standard packages.

In some industries a weak labor market has also left candidates with fewer options and less leverage, and employers better positioned to dictate terms. Those who are unemployed, or whose current job seems shaky, have seen their bargaining power further reduced.

But job market complexity creates opportunities for people who can skillfully negotiate the terms and conditions of employment. After all, negotiation matters most when there is a broad range of possible outcomes.

As a professor who studies and teaches the subject, I frequently advise current and former students on navigating this terrain. For several years I have been offering a presentation on the topic to current students. (To see a video of this talk, go to www.NegotiateYourOffer.com.) Every situation is unique, but some strategies, tactics, and principles can help you address many of the issues people face in negotiating with employers. Here are 15 rules to guide you in these discussions.

The Rules of Negotiation

Don't underestimate the importance of likability. This sounds basic, but it's crucial: People are going to fight for you only if they like you. Anything you do in a negotiation that makes you less likable reduces the chances that the other side will work to get you a better offer. This is about more than being polite; it's about managing some inevitable tensions in negotiation, such as asking for what you deserve without seeming greedy, pointing out deficiencies in the offer without seeming petty, and being persistent without being a nuisance. Negotiators can typically avoid these pitfalls by evaluating (for example, in practice interviews with friends) how others are likely to perceive their approach.

Help them understand why you deserve what you're requesting. It's not enough for them to like you. They also have to believe you're worth the offer you want. Never let your proposal speak for itself--always tell the story that goes with it. Don't just state your desire (a 15% higher salary, say, or permission to work from home one day a week); explain precisely why it's justified (the reasons you deserve more money than others they may have hired, or that your children come home from school early on Fridays). If you have no justification for a demand, it may be unwise to make it. Again, keep in mind the inherent tension between being likable and explaining why you deserve more: Suggesting that you're especially valuable can make you sound arrogant if you haven't thought through how best to communicate the message.

Make it clear they can get you. People won't want to expend political or social capital to get approval for a strong or improved offer if they suspect that at the end of the day, you're still going to say, "No, thanks." Who wants to be the stalking horse for another company? If you intend to negotiate for a better package, make it clear that you're serious about working for this employer. Sometimes you get people to want you by explaining that everybody wants you. But the more strongly you play that hand, the more they may think that they're not going to get you anyway, so why bother jumping through hoops? If you're planning to mention all the options you have as leverage, you should balance that by saying why--or under what conditions--you would be happy to forgo those options and accept an offer.

Understand the person across the table. Companies don't negotiate; people do. And before you can influence the person sitting opposite you, you have to understand her. What are her interests and individual concerns? For example, negotiating with a prospective boss is very different from negotiating with an HR representative. You can perhaps afford to pepper the latter with questions regarding details of the offer, but you don't want to annoy someone who may become your manager with seemingly petty demands. On the flip side, HR may be responsible for hiring 10 people and therefore reluctant to break precedent, whereas the boss, who will benefit more directly from your joining the company, may go to bat for you with a special request.

Understand their constraints. They may like you. They may think you deserve everything you want. But they still may not give it to you. Why? Because they may have certain ironclad constraints, such as salary caps, that no amount of negotiation can loosen. Your job is to figure out where they're flexible and where they're not. If, for example, you're talking to a large company that's hiring 20 similar people at the same time, it probably can't give you a higher salary than everyone else. But it may be flexible on start dates, vacation time, and signing bonuses. On the other hand, if you're negotiating with a smaller company that has never hired someone in your role, there may be room to adjust the initial salary offer or job title but not other things. The better you understand the constraints, the more likely it is that you'll be able to propose options that solve both sides' problems.

Be prepared for tough questions. Many job candidates have been hit with difficult questions they were hoping not to face: Do you have any other offers? If we make you an offer tomorrow, will you say yes? Are we your top choice? If you're unprepared, you might say something inelegantly evasive or, worse, untrue. My advice is to never lie in a negotiation. It frequently comes back to harm you, but even if it doesn't, it's unethical. The other risk is that, faced with a tough question, you may try too hard to please and end up losing leverage. The point is this: You need to prepare for questions and issues that would put you on the defensive, make you feel uncomfortable, or expose your weaknesses. Your goal is to answer honestly without looking like an unattractive candidate--and without giving up too much bargaining power. If you have thought in advance about how to answer difficult questions, you probably won't forfeit one of those objectives.

Focus on the questioner's intent, not on the question. If, despite your preparation, someone comes at you from an angle you didn't expect, remember this simple rule: It's not the question that matters but the questioner's intent. Often the question is challenging but the questioner's intent is benign. An employer who asks whether you would immediately accept an offer tomorrow may simply be interested in knowing if you are genuinely excited about the job, not trying to box you into a corner. A question about whether you have other offers may be designed not to expose your weak alternatives but simply to learn what type of job search you're conducting and whether this company has a chance of getting you. If you don't like the question, don't assume the worst. Rather, answer in a way that addresses what you think is the intent, or ask for a clarification of the problem the interviewer is trying to solve. If you engage in a genuine conversation about what he's after, and show a willingness to help him resolve whatever issue he has, both of you will be better off.

Consider the whole deal. Sadly, to many people, "negotiating a job offer" and "negotiating a salary" are synonymous. But much of your satisfaction from the job will come from other factors you can negotiate--perhaps even more easily than salary. Don't get fixated on money. Focus on the value of the entire deal: responsibilities, location, travel, flexibility in work hours, opportunities for growth and promotion, perks, support for continued education, and so forth. Think not just about how you're willing to be rewarded but also when. You may decide to chart a course that pays less handsomely now but will put you in a stronger position later.

Negotiate multiple issues simultaneously, not serially. If someone makes you an offer and you're legitimately concerned about parts of it, you're usually better off proposing all your changes at once. Don't say, "The salary is a bit low. Could you do something about it?" and then, once she's worked on it, come back with "Thanks. Now here are two other things I'd like..." If you ask for only one thing initially, she may assume that getting it will make you ready to accept the offer (or at least to make a decision). If you keep saying "and one more thing...," she is unlikely to remain in a generous or understanding mood. Furthermore, if you have more than one request, don't simply mention all the things you want--A, B, C, and D; also signal the relative importance of each to you. Otherwise, she may pick the two things you value least, because they're pretty easy to give you, and feel she's met you halfway. Then you'll have an offer that's not much better and a negotiating partner who thinks her job is done.

Don't negotiate just to negotiate. Resist the temptation to prove that you are a great negotiator. MBA students who have just taken a class on negotiation are plagued by this problem: They go bargaining berserk the first chance they get, which is with a prospective employer. My advice: If something is important to you, absolutely negotiate. But don't haggle over every little thing. Fighting to get just a bit more can rub people the wrong way--and can limit your ability to negotiate with the company later in your career, when it may matter more.

Think through the timing of offers. At the beginning of a job hunt, you often want to get at least one offer in order to feel secure. This is especially true for people finishing a degree program, when everyone is interviewing and some are celebrating early victories. Ironically, getting an early offer can be problematic: Once a company has made an offer, it will expect an answer reasonably soon. If you want to consider multiple jobs, it's useful to have all your offers arrive close together. So don't be afraid to slow down the process with one potential employer or to speed it up with another, in order to have all your options laid out at one time. This, too, is a balancing act: If you pull back too much--or push too hard--a company may lose interest and hire someone else. But there are subtle ways to solve such problems. For example, if you want to delay an offer, you might ask for a later second- or third-round interview.

Avoid, ignore, or downplay ultimatums of any kind. People don't like being told "Do this or else." So avoid giving ultimatums. Sometimes we do so inadvertently--we're just trying to show strength, or we're frustrated, and it comes off the wrong way. Your counterpart may do the same. My personal approach when at the receiving end of an ultimatum is to simply ignore it, because at some point the person who gave it might realize that it could scuttle the deal and will want to take it back. He can do that much more easily without losing face if it's never been discussed. If someone tells you, "We'll never do this," don't dwell on it or make her repeat it. Instead you might say, "I can see how that might be difficult, given where we are today. Perhaps we can talk about X, Y, and Z." Pretend the ultimatum was never given and keep her from becoming wedded to it. If it's real, she'll make that clear over time.

Remember, they're not out to get you. Tough salary negotiations or long delays in the confirmation of a formal offer can make it seem that potential employers have it in for you. But if you're far enough along in the process, these people like you and want to continue liking you. Unwillingness to move on a particular issue may simply reflect constraints that you don't fully appreciate. A delay in getting an offer letter may just mean that you're not the only concern the hiring manager has in life. Stay in touch, but be patient. And if you can't be patient, don't call up in frustration or anger; better to start by asking for a clarification on timing and whether there's anything you can do to help move things along.

Stay at the table. Remember: What's not negotiable today may be negotiable tomorrow. Over time, interests and constraints change. When someone says no, what he's saying is "No--given how I see the world today." A month later that same person may be able to do something he couldn't do before, whether it's extending an offer deadline or increasing your salary. Suppose a potential boss denies your request to work from home on Fridays. Maybe that's because he has no flexibility on the issue. But it's also possible that you haven't yet built up the trust required to make him feel comfortable with that arrangement. Six months in, you'll probably be in a better position to persuade him that you'll work conscientiously away from the office. Be willing to continue the conversation and to encourage others to revisit issues that were left unaddressed or unresolved.

Maintain a sense of perspective. This is the final and most important point. You can negotiate like a pro and still lose out if the negotiation you're in is the wrong one. Ultimately, your satisfaction hinges less on getting the negotiation right and more on getting the job right. Experience and research demonstrate that the industry and function in which you choose to work, your career trajectory, and the day-to-day influences on you (such as bosses and coworkers) can be vastly more important to satisfaction than the particulars of an offer. These guidelines should help you negotiate effectively and get the offer you deserve, but they should come into play only after a thoughtful, holistic job hunt designed to ensure that the path you're choosing will lead you where you want to go.

http://hbr.org/2014/04/15-rules-for-negotiating-a-...

How to Negotiate a Higher Salary?

You can also check out a good clip sharing tips for how to negotiate an offer.


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Comments (86)

Mar 18, 2014

Hot damn, what a great article. Understanding a person and their constraints and intent is definitely the trickiest part and where varying levels of social intelligence probably make the biggest difference.

Mar 18, 2014

Thank you!

Mar 18, 2014

Much needed, thanks

Chaos is a ladder and the climb is real

Mar 19, 2014

Remember: What's not negotiable today may be negotiable tomorrow.

Can't stress this enough.

Mar 21, 2014

Very helpful

Mar 21, 2014

All great advice, especially emphasis on "don't negotiate just to negotiate."

Mar 21, 2014

Avid HBR reader and this is a gem even for them.

Mar 22, 2014

Great advice, thanks for sharing!

    • 1
Mar 22, 2014

I found it was also easy to negotiate "soft" things that mattered a lot, because they are non-cash, for example non-competes are oftentimes easier to negotiate than salary. Also companies are oftentimes scared of having to put down a large increase in base salary, but are much more at ease with doi a larger signing or other guaranteed comp. it's often easier than base, which they see as a recurring proposition.

    • 1
Jan 29, 2015

This is a great breakdown on how to go into a negotiation! Thanks.

Jan 29, 2015

Great article with simple facts to apply. Thanks!

Si Vis Pacem Para Bellum

Jan 31, 2015

Great stuff, thanks for posting this. +1

Feb 17, 2015

Thanks for the tips. This is especially helpful for women and minorities who tend to still be extremely grateful about landing the job and don't necessarily worry so much about salary.
+1

Feb 17, 2015

Will echo the comment about staying silent. It does wonders when the other person rushes in and you appear in control. Would also add to not accept the first "no" (within reason). Most always they'll try to change your mind and tell you why they can't give you a higher pay but you can get some success if you push back a little

    • 1
Feb 17, 2015

#6 is spot on.

#4 is dead wrong. The first person that throws out the number sets the anchor that most discussions will revolve around from that point on. As long as you have some idea of your value, throwing out the first number is usually a good idea.

Feb 17, 2015
DickFuld:

#6 is spot on.

#4 is dead wrong. The first person that throws out the number sets the anchor that most discussions will revolve around from that point on. As long as you have some idea of your value, throwing out the first number is usually a good idea.

I agree. Always be the first to put out a number as that is what all future numbers will be compared to.

Feb 17, 2015

know your pay history. So when they ask you "how much last year? and the year before? and your place before here?" you know it dead.

Feb 17, 2015
300 Hours:

One of the cardinal rules of negotiation is that you should never be the first to name a number.

Please elaborate, as there is substantial evidence that anchoring can significantly affect the outcome of a negotiation.

http://en.wikipedia.org/wiki/Anchoring#Anchoring_i...

Feb 17, 2015

Good point by @Tar Heel Blue, but thanks for posting this @300 Hours. Its guys like you that'll make guys like me guys like you one day :)

If we blame others for our failure then we should also give them credit for our successes.

Feb 17, 2015

Even before the interview, you should clearly know the range. There should be close to zero haggling over numbers [or less than 5%]. Salary negotiations is an area where the surprise factor shouldn't even be there, or be minimum at worst. Otherwise it shows poor preparation on both sides.

Feb 17, 2015

Great point by @Tar Heel Blue and great post by OP.

I have also read that leveraging for a promotion/raise with an external offer, makes you more expendable when job cuts or downsizing rolls around, as it shows that (on the surface at least) you are/were not happy with your role at the company.

Progress is impossible without change...

Feb 17, 2015

Good article. I think the most debatable one is not being first to name a number, since I assume there is always some "anchoring" bias at play with regards to the first number mentioned.

Feb 17, 2015

2 cents: Anchoring is more effective and useful in a 'greenfield' negotiation. So when you're talking about a consulting fee for a contract, or the value of a house - something where the range could be quite big.

In a salary negotiation, chances are you and your boss know approximately what you're worth. Say within 5-10k for junior guys or 15-25K for more senior guys. (?) If you can't agree on that, then there either is a disconnect in the confidence of your boss in you to do the job vs. your ability and/or the research you've done to determine what is market value for the role.

Generally, I'd let the employer make the first offer, numerically.

Feb 17, 2015
NiuShi:

2 cents: Anchoring is more effective and useful in a 'greenfield' negotiation. So when you're talking about a consulting fee for a contract, or the value of a house - something where the range could be quite big.

In a salary negotiation, chances are you and your boss know approximately what you're worth. Say within 5-10k for junior guys or 15-25K for more senior guys. (?) If you can't agree on that, then there either is a disconnect in the confidence of your boss in you to do the job vs. your ability and/or the research you've done to determine what is market value for the role.

Generally, I'd let the employer make the first offer, numerically.

So given that you both are aware of the range wouldn't you be better off throwing out a number on the higher end first which might skew the negotiation a few thousand into your direction when it's all said and done?

Feb 17, 2015

Yes, agree. The suggestion not to make the first offer is nonsense.

Prominent research in experimental social psychology shows that you should absolutely make the first offer. It also shows how you can de-bias yourself if you are the "victim" of a first offer by the opponent negotiator (see Galinsky & Mussweiler, 2001, in Journal of Personality and Social Psychology).

But you should be careful not to make too aggressive first offers as that can offend the other negotiator (see Schweinsberg et al. 2012, in Journal of Experimental Social Psychology).

Interesting discussion!

Feb 17, 2015

I have suggested that I get a raise a couple times, including when I originally got hired. I kind of got this look -______- from my boss. Didn't get a raise or an increase, but certainly didn't get fired over it, and ultimately took the job anyhow.

Then just randomly, I got a 15% raise and a bonus structure. Perhaps it was my work? Perhaps it was because I pestered them about it just enough to make them think either "maybe I should pay him more" or "maybe he's thinking about leaving"

I can't imagine you just outright getting your offer renegged because you ask for a little extra.

Feb 17, 2015

.

Feb 17, 2015

Don't ask don't get. But don't ask without supporting facts as that makes you look bad.

Feb 17, 2015

Well, it matters how well you drive and support your argument, if you sit there dopey as hell and plainly lay out "I need a raise" you'll get the -_________- CFE was talking about (not that CFE did the aforementioned), it's proper to back yourself up some numbers; averages, living costs, parallel growth/pay comparison firm to firm, anything you can bite into really man. Plus, if you negotiate right, you might even have them impressed and have an easier time fetching work where that skill will be crucial (ex. negotiating fees)

Feb 17, 2015
watchitburn:

Has anyone ruined their chances epically for a new job during a salary negotiations? I hate the idea of messing up a good opportunity during the last leg of the race after all the pain of rounds and rounds of interviews just because I was greedy and wanted a few extra $ $ bills.

On the flip slide, did anyone masterfully handle two job offers and raised their salary like a pro?

If you're talking about a job right out of undergrad at a company that hires multiple people at the same level, your chances are essentially zero. However, if you're working at a smaller firm or are an experienced hire, you should definitely spend some time negotiating pay before signing on.

Feb 17, 2015

IMO, don't ask unless you 1) have leverage/something to offer and 2) are willing to walk. People can and will lose their offers and if you are a junior guy you have no leverage or skills to really demand more money.

Feb 17, 2015
TNA:

IMO, don't ask unless you 1) have leverage/something to offer and 2) are willing to walk. People can and will lose their offers and if you are a junior guy you have no leverage or skills to really demand more money.

Seconded. I'm presuming that you have something to fall back on or already have a job that you are reasonably satisfied with. Definitely not worth blowing your offer for a few thousand extra bucks.

Feb 17, 2015

My last job at a BB (i was hired into this position in 2010) was my first time negotiating my salary. I've had 3-4 jobs prior over about 6-8 years...and each time, i just took what was offered. My logic at the time was always "i'm lucky to be getting the offer in the first place." So, after about 6 years of real experience, my last years pay was 300k. I was a flow trader who had not made real $$ trading...but i was smart and knew my stuff..and i had some "other skills" that i knew this potential employer needed / valued. The head of the desk / hiring manager offered me the same pay as my previous job (300k). They prefaced their offer by saying that it was not their policy to give additional guaranteed pay to new employees who were lateraling (i suppose i error'd by telling the truth here..i should have lied and said my last years pay was 500k). I argued that my skillset was worth more than what they were offering. This was a little cocky, however, they really needed somebody with my skills...and there aren't that many people with my specific experience. This all happened while chatting over coffee at starucks @ 7:30am on a market day, i asked for 500k. The guy (also a trader) said, "lets split the difference - 400k - done?" At this point, i realized i had made an error. If i had asked for 1mm...he would have laughed and said "try again." If i had asked for 600k, his response would have probably been the same..."lets split the diff." Cost me 50-100k.

My point is that...it really depends on who you are negotiating with. HR, CFO, anybody in a management type job...they are sticklers and tight with money. A trader? If you are not too far apart...a trader will often say, "lets meet in the middle."

The most important point is that you must have something unique to offer. You are not a special flower...nobody cares about how "special" you are because you just aren't. If you are not a "hot commodity" then in this market you are lucky to get any offer at all.

Just my $0.02

Feb 17, 2015

Follow-up to my story:

I interview for two jobs back to back days and got both of them. Nailed it. It feels great to make my options for the future vs. taking what my company gives me.

The first offer is in corporate finance for a division withing a division with a giant broadcasting company. The typical budgeting on a monthly basis. My current job is very similar but done at a higher level with a lot more senior interaction, presentations, and ad-hoc analysis. This job feels like a bit of a 'step down' from what I'm currently doing. I know that understanding products at a business unit level is important, but the 10,000 ft. view is exciting and has interesting analysis. The people are nice, the company is known for promoting quickly from within, the reputation of the company is great, and (superficially) the offices are gorgeous - and yet, I'm"meh" about this offer.

The second offer is in Corporate Strategy at the companies top location. This is more of a 'step up' in terms of division and who I am reporting to. I don't have a lot of market research or competitive intelligence in my background, so this role will definitely expand my skill set. Currently, I do the financial portion of the strat plan for the outyears so I am comfortable from that perspective, as well some ad-BC analysis for the strategy team. My would-be boss is a very impressive guy and almost the entire team has a consulting background. This job is EXACTLY what I've been looking for! Perfect mesh of my skills + interest + opportunities to grow.

I'll finish up the final part in a later post...

Feb 17, 2015

I think it's the feeling of not being content with the fact they accepted the number without putting much of a fight. By no means am I an expert in negotiations, but it sounds like the deal is done,

Feb 17, 2015

Why would you ever put an upper range on a salary number? That's essentially saying, "I won't take less than X, but I know I'm not worth more than X."

You set the table for negotiations by saying the number. If you go back on your word, there are consequences and I'm not sure how that's how I would want to start a new job.

In interviews, I typically state that the number is flexible, and if I find the right opportunity than that's the most important part. After all, regarding comp in PE, your lifestyle isn't drastically altered by a little change.

If anything, inquire about the management changes. It would be good to make sure everything is still ok with the fund you had agreed to join.

Feb 17, 2015

I was in a very similar position which, in the end, I ended up just taking their high offer.

I was happy with the salary increase, but it was frustrating knowing I could have received more. Like EightAceTres said, I didn't want to start off a new position fighting over a few thousand dollars.

Live and learn... I'll never give a range again!

Feb 17, 2015

Not to nitpick, but this is more of a checklist of things you should have, rather than a 'how-to' on negotiations, not that there's anything wrong with that.

Feb 17, 2015
DickFuld:

Not to nitpick,

what are you trying to micromanage his blog post? go fly a kite or something... :)

WSO's COO (Chief Operating Orangutan) | My Linkedin

Feb 17, 2015

1.) Most banks don't negotiate with first year analysts. Most first year analysts aren't worth negotiating with.
2.) Most hedge funds pay a lot of comp in the form of bonus, so anything you negotiate on salary won't necessarily change your total comp.

Feb 17, 2015
IlliniProgrammer:

1.) Most banks don't negotiate with first year analysts. Most first year analysts aren't worth negotiating with.

2.) Most hedge funds pay a lot of comp in the form of bonus, so anything you negotiate on salary won't necessarily change your total comp.

1) For sure. That's why I prefaced the piece with the comment this is perhaps more suitable for start-up guys.
2) I think there may be room to be creative there. Maybe negotiate your the wavelength of your promotion cycle after the first 18 months if you are looking for a management role. Or request an 'on-going education' or gym membership payback program of X per month for language classes.

Feb 17, 2015

OP, some firms are hiring for EIRs (Entrepreneurs in Residence). Do you have any additional suggestions for someone in that position ? Thank you.

Feb 17, 2015

Would you mind explaining a little further about your situation. I'm happy to offer any insights if I'm able.

Off the top of my head - it seems most important for that person to take an equity stake in the projects he/she creates, or at least have primary investing rights once the project reaches seeding/funding rounds. Strikes me as a solid way to align incentives across the board.

But again, please provide more color and I'm happy to answer.

Feb 17, 2015

Many thanks

Feb 17, 2015

Anyone have advice on HOW to structure a request for equity in a startup? I work at a startup and equity was mentioned (along with pay raises) as forms of compensation upon my hire. Coming up on my one year anniversary and neither have materialized. What are some of the reasonable and feasible ways to ask for an equity share?

Make opportunities. Not excuses.

Feb 17, 2015

An important distinction to make when requesting for equity is between restricted stock and stock options. At the risk of oversimplification, the former is pretty much 'a gift' to early employees while the latter gives you an opportunity to buy in after a vesting period.

While getting restricted stock may be preferable because it's automatic and you own X% of company from day 1 of the agreement, proposing stock options to your boss with a vesting period of X years/months could be a more compelling proposition from their perspective. It also incentivizes you to work harder to raise the value of the company so you eventually have 'in the money' options.

WSR, I might begin by professionally reminding your boss of the contributions you've made thus far and then moving on to the meat and potatoes of your request. Something like this:

"Thanks for taking the time to speak with me today (add cursory pleasantries here...)"

I'd like to discuss briefly with you some of my accomplishments over the past year and how we can work together to ensure my ongoing success at _________. A few key achievements come to mind:

-I've done X, resulting in X1
-I've done Y, resulting in Y2
-and I've done Z, resulting in Z3,
-Furthermore, I've already begin projects A and B, which will ultimately result in A4 and B5, generating C in top-line growth for the company.

Looking forward, I would like to make sure that over the long term, the company's and my interests are aligned. As we had discussed upon my hire, I was told equity would be a form of compensation for my position. I've been with (company name) for nearly a year and would really like to maintain my involvement with this organization. It's growth prospects are great, I thoroughly enjoy working with my colleagues and supervisors, and I'm learning new things every day.

I'm ready to step up and take on even more responsibility. Do you think we can reach an agreement in which I can earn (restricted stock/stock options) and an increased level of responsibility at the firm?"

I might recommend something like the above...

-Remind boss of your previous accomplishments and those you've planned for going forward.
-Re-iterate your long term interest in helping the business succeed
-Volunteer to make your boss's job easier by taking on more responsibility and get that equity stake. Make it easy for him to say yes. I'd also be specific by saying 'stock options,' for instance. Don't just say 'equity.' It's lazy and it makes it easier for the boss to say no. Giving someone equity in the business means less money for him. Giving someone stock options just sounds like a reward for hard work.
-Phrase it such a form as you are working together "Do you think we can reach an agreement...?" He'll sound like a prick if he says you can't reach an agreement, right?
-Lastly, I'm a believer in asking for a lot, because it demonstrates confidence as long as you're not arrogant when you do it. So go ahead and basically ask for a promotion at the same time with that 'increased level of responsibility.' It's the perfect time to bump yourself up a level...

PM me if you have further thoughts. Hope this helps, mate. Good luck.

    • 1
Feb 17, 2015

Also, before anybody mentions, I can NOT leave this blank.

Feb 17, 2015

anybody??

Feb 17, 2015

I would probably stick with something like $100k and not budge much.

Feb 17, 2015

put 110. from my interviewing experience, firms focus on getting the right candidate, and then discuss salary with them. so unless you're asking for something wayyy outside of range, no one is going to get an interview over you just because they're "cheaper."

Feb 17, 2015

Purely anecdotal but the first time I moved I asked for 20% over (base + bonus) but granted this was not a finance style 30-100% bonus.

I'd say factor in total (including bonus, or at least discuss bonus potential) + 10-20% depending on how low your COL is compared to NY. Just come in with solid numbers and be willing to negotiate. If you've made it far enough to talk money then they truly want you as much as you want to be there.

Feb 17, 2015

Nope. All BA/A/AC's get the same salary by policy. I'm guessing you're coming in as an A1/AC1/BA1? The only way you're going to get a higher salary is by coming in as a second year, but I doubt they'll do that with someone with just one year of work experience elsewhere.

Feb 17, 2015

That's totally expected, and unfortunately part of the downside of coming into MBB after only one year elsewhere. You'll be treated essentially as a brand new first-year.

Feb 17, 2015

yay_consulting, could you comment more on how you went about the lateral hire process? I am working on doing the same thing (though I've been working for a niche consulting firm for about 2.5 years), and it seems many recruiters at top firms won't even glance at my resume since I'm not coming straight out of undergrad. Any feedback is appreciated.

Feb 17, 2015

+1 for lateral info - thanks.

Feb 17, 2015

pnb2002 and NoName, do you think I should still ask, or is there a downside to asking?

bugeishaAD and skipper, to be honest, luck was a major factor. I went to a target school. I wanted to be in a specific city and that MBB office needed staffing. I applied to a couple firms in that city, most flat out rejected my application and another one said they would consider me during the regular recruiting cycle. Another lateral candidate that was interviewing with me said he got the interview through networking. Feel free to pm me if you want more details.

Feb 17, 2015
yay_consulting:

pnb2002 and NoName, do you think I should still ask, or is there a downside to asking?

There is likely no downside to asking, but the answer is going to be no so I don't know why you'd bother.

Feb 17, 2015
yay_consulting:

pnb2002 and NoName, do you think I should still ask, or is there a downside to asking?

I don't think there's necessarily a downside besides creating a little friction between yourself and the person you ask (but depending on the person, that might not happen). But yes, I'm pretty confident the answer will be no.

Feb 17, 2015

Not in consulting so it may not apply but I recently applied for a lateral in IB and I just hit 2 years of experience, the person I talked to said it would be possible for me to come in as a 2nd year. It sounds like until you hit two years you don't really get any credit for the previous experience. Same thing when I looked at lateraling at the 1.5 year point, they basically told me that I'd come in as 1st.

Feb 17, 2015

No downside to asking, subject to any usual admonitions about being tactful. I think there's some upside, but likely $5k max.

Feb 17, 2015

Take it or leave it. There's a global compensation committee for every MBB that decides the salaries of Analysts.

Feb 17, 2015

NO!

Feb 17, 2015

I've only heard of one BA that was able to negotiate his pay, but that guy had serious connections. In general, salaries for MBB are standardized and non-negotiable.

Feb 17, 2015

i'm glad i chose a location with a low cost of living.

Feb 17, 2015

Salary at non-MBB is open for discussion for the most part.

MBB does not budge - they all know where all the other firms are at.

AudiChow

Feb 17, 2015

Highly unlikely. You should know, however, that there's been a $10k increase in the signing bonus as of a couple of weeks ago. I think MS kicked it off, and it's now spread to nearly all the BBs.

Feb 17, 2015

Do banks make more offers than there are positions knowing some offers would be rejected?

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-

Feb 17, 2015

Of course. Just like college admissions.

Feb 17, 2015

Everyone matches everyone it appears. I do not really know how negotiable things are.

Feb 17, 2015

It's non-negotiable, since if you f it up, there are a billion other candidates waiting to take your spot.

Feb 17, 2015
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Feb 17, 2015
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"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-

Feb 17, 2015
Feb 17, 2015
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"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.