NEGOTIATION

How to Maximize Your Lifetime Earning Potential

Your most significant salary jumps typically occur when you accept a new job at another company.

Once you’re inside a system, the policies for raises and promotions aren’t very flexible. Your manager has a little wiggle room, but not much.

That new job offer is your chance to make the most significant impact on your lifetime earning potential.

Bonus

The bonus (i.e., signing bonus) is where the manager has the most flexibility to sweeten the deal. Just saying “No” to a job offer resulted in a crazy bonus increase for one job I was considering.

The size of the bonus does depend on your level and job title (more on this below). Some entry-level positions may not have a bonus at all.

You may also qualify for reimbursement of your moving expenses (i.e., relo) if you will be moving to accept the job. Do not confuse this with a “bonus.” Also, don’t let them try to refer to this as a bonus. It is not.

One thing to keep in mind, most bonuses (and relo) require repayment if you quit the job before the amount of time specified in your employment agreement. This time can range from one to five years.

Stock

Stock options can be another way to sweeten the deal. But there is a maximum based on the level of the job. Execs will receive more options than an entry-level employee, for example.

The stock also will vary depending on the maturity of the company and the perceived “risk” in taking the job. Early-stage startups will give you more equity (i.e., stock) than a public company, often because the other compensation isn’t as competitive (e.g., salary, benefits).

Even with early-stage startups, the amount of equity you receive depends on how early you join the company and your level. For example, a Seed stage startup will give you more ownership than a startup that has raised their series A.

Remember that stock options are “funny money.” Sometimes they pay off, sometimes not so much. I remember watching my stock options at one company start at a value that meant “New House!” and then slowly drop to end at $0.70/share before they vested. 😞

Salary

There is some flexibility in your base salary within the offered level. However, no manager wants to bring you in too high within the salary band where you’ll be stuck until you’re eligible for a promotion. It’s much harder to get a promotion vs. a raise.

But, an increase in salary is the gift that keeps on giving for the rest of your career. Fight for it!

Salary is one of the most robust components of your lifetime earning potential. Your next employer will use your prior income as their base of negotiations. It’s why they often ask what you’re currently making.

The hiring manager and HR do expect some level of negotiation (e.g., a couple of times back and forth). They won’t be offended if you’re reasonable, but you have to know when the negotiation is over and stop.

Also, don’t negotiate on one component of the comp (e.g., base salary), accept their counter, and then move on to argue the next element in the comp (e.g., stock). This behavior frustrates the hiring manager.

He or she feels like you’ve agreed, only to have you say; “Ok, I accept the salary. Now, I want more stock.”

Level

The level is the real golden opportunity, and your total compensation is based on it. Stock, bonuses, base salary, and some other perks. The offer level is where you’ll get the biggest bang for your negotiation buck.

If you are on the cusp between two levels (e.g., Director vs. Sr. Director), make a case for the next level up. Support your proposal with data and examples of why you are performing at that next level.

Warning: don’t expect a chance to “prove yourself” at this next level. The hiring manager is not going to hire someone who isn’t qualified for a given level, hoping that he or she will work out. The cost is too high.

If you don’t work out and can’t perform at that level, the manager isn’t usually going to bump you down a level. You are going to get fired.

I’m not trying to scare you off from making a case for a level bump if you are indeed qualified for it. You can easily demonstrate that you are qualified for that level if you know that you are a Sr. Manager.

Negotiate hard because a level bump impacts your lifetime earning potential, as well as myriad other opportunities and doors it will open for you later.

I can’t emphasize this enough. Getting bumped up into that next level will make a massive difference in how quickly your career advances over the years.

Take Charge of Your Career

Don’t be shy about negotiating for what you know you are worth. As hard as it may seem to do during the offer process, it’s even harder once you take the job. Asking for a raise or promotion later will be more challenging.

You should always ask for a raise or promotion when you deserve one. But, it is a different experience when you are already an employee sitting across the desk from your boss.

I know that it can be hard to judge the quality of a job offer. It’s also not easy to compare offers from different companies when there are myriad factors involved. I created some spreadsheets that do make that process easier, though.

It helps to involve someone who has a fresh and unbiased perspective. That can be a trusted friend or loved one. Or, it can be a trusted advisor. As always, let me know if I can help.

Note: an earlier version of this article originally appeared on Brilliant Forge.

Check out my Invincible Career newsletter where you can receive more stories and advice that help you plan your own invincible career and life! You can also learn more about my services on Brilliant Forge.

Larry Cornett is a Leadership Coach and Career Advisor. He lives in Northern California near Lake Tahoe with his wife and children, two Great Danes, two chickens, and a stubborn old cat. He does his best to share advice that can help others take full control of their work and life. He’s also on Twitter and Instagram @cornett.