Negotiating compensation and benefits is an absolutely crucial part of the hiring process. To achieve a successful hire, it’s in the best interest of both the hiring team and the candidate to make sure that compensation is fair and in line with both the market and the role’s expected contributions.
Senior executives are expected to take on significant responsibility and add substantive value to the organization. Leadership roles customarily come with more substantial compensation packages than those of other employees, but getting the complete package just right can take some work. Achieving “total rewards” is as much about the alignment of values as it is about size. This article is intended for executive candidates who want to learn more about what benefits an executive compensation package can include and how to maximize the personal impact of their benefits.
What is encompassed by executive compensation?
Executive compensation is the sum of all benefits, salaries, and perks that an executive receives in their employee package, material or otherwise. Most hiring managers will pay their high-impact executives generously because they add significant value to the company and actively represent the organization to the public.
Executive Compensation: Key Components
These are just a few aspects of executive compensation that you might consider when negotiating your package.
- Base Salary: This is the annual base salary that an executive receives for a calendar year. While it does not make up the entirety of the compensation package, it is often the most important and flexible component.
- Incentive Structure: Also called a bonus structure, this additional payment is made to an executive in cash, stock, or investment options based on measurable KPIs.
- Membership fees to associations: Executive compensation packages may include professional association memberships that signal credibility or support career advancement.
- Stock options for company stock: Many executives believe it is important to have equity in the company where they work. Compensation packages for large companies often include incentives for hiring teams.
- Travel & Transportation: Depending upon the size of an organization, they might have cars or planes for executive use. Companies provide designated luxury vehicles to executives who travel frequently. Some companies offer a corporate plan for air travel, first-class tickets, or stipends.
- Education benefits: Many organizations offer education financing for executives and their children, if necessary. Many businesses will reimburse or pay tuition fees for family members who are enrolled in higher education.
- Financial services Executive compensation packages may include accounting, investing, and financial advising services.
- Insurance coverage: Insurance plans are typically offered to employees at all employment levels. For executives, insurance packages can be more generous and include options such as life, disability, and vision insurance.
- Legal representation: To mitigate the risk taken on by executives, some companies offer legal counsel to their leadership teams.
- Loan forgiveness Some executives can get help paying off student loans and mortgages as part of their executive compensation package.
- Relocation Compensation: If a candidate has to relocate to start work for the company, the hiring team may offer them relocation stipends or packages to make the transition easier.
- Signing Bonus: A one-time payment that a company offers to a candidate to encourage them to work with the company.
- Wardrobe Stipend: Executives are often seen as public figures who represent the company they work for. Many hiring managers offer generous stipends to executives for clothes and accessories.
- Severance Package: If the company has to terminate an executive for any reason they offer a generous severance plan that gives them ample time to search for a new job.
How to Negotiate Executive Compensation
These best practices can be used to negotiate your next executive compensation plan. Following these steps can increase your chances of getting a compensation package that makes you feel valued, while also maximizing your marketability as an executive candidate.
1. Determine your upper and lower salary limits and any must-haves.
Before you start the negotiation process, you should determine what your base salary range is. A range is better than one figure. This allows for more flexibility. Include certain aspects of executive compensation, such as first-class airfares or education assistance, in your required extras.
2. Consider professional support.
Here at CCY, we have recruited hundreds of executives over our 40+ year history and negotiated as many packages. Our expert headhunters consider it mission-critical to ensure that every executive we place gets the opportunity, the team, and the compensation that supports his or her optimal performance. If you haven’t yet had the recruitment experience that makes working with an executive headhunter a no-brainer, we’d really appreciate the opportunity to deliver that experience. Candidates never incur a fee for our career support.
3. Do not negotiate for your compensation until you are ready.
Instead of mentioning your salary in an interview, discuss other aspects of your candidacy. Before discussing compensation and benefits, discuss your skills, experience, and potential. Go into the compensation conversation feeling confident that the leadership team feels that you are the right candidate.
4. Get an offer before you express your limits.
After you have begun compensation negotiations, let the company make an initial offer. You can counter them by asking for their first offer. Avoid asking for their salary range or benefits.
5. Quantify the value you’ll deliver to the company.
Focus on your abilities, experience, and cross-functional skills when negotiating compensation with the hiring manager. Talk to people politely and confidently assert the best fit for the job. The hiring team might be more inclined to raise your salary if you are able to focus on your value.
6. Thoroughly consider non-salary compensation.
When negotiating your salary, remember the benefits that executives often receive are diverse and creative. You might call this package “Total Reward.” Think about your lifestyle and how much time you might give to the company. Consider how additional benefits could help you with other responsibilities and let you focus on the work.
7. Document the compensation plan.
After you have reached an agreement with the hiring team on fair compensation and benefits, you will need to sign a document detailing what your compensation is. Before signing, make sure you read the entire document. If you have any questions, it is a good idea to ask for a copy of this document.
Don’t be undervalued.
If you could use professional support in negotiation or any other area of career development, get in touch with CCY. It’s the surest way to connect with an executive headhunter who won’t waste your time and will get you the comp you deserve. Submit your CV, connect with us on LinkedIn, or call us today at (585) 420-8422.
Senior Consultant & Client Partner
With a background in leadership and sports management, Tim Coykendall is exceptionally driven to help individuals and organizations reach their most ambitious professional goals. He has a unique ability to pinpoint cultural alignment as he evaluates talent for critical executive leadership positions across the country.