How to Negotiate Compensation

You've read the writing on the wall. Your current job has about as much life left in it as your old 286 PC. Your successor - handpicked and groomed by you - is already in possession of your key to the executive washroom. Clearly, it's time to move on and find a new gig. And while for CIOs the boom times of multiple job offers and stock options that would make King Midas jealous are over, that doesn't mean you can't land a new job with a swell compensation package.

Beverly Lieberman, president of Halbrecht Lieberman Associates, an executive search company in Stamford, Conn., specialises in recruiting senior IT executives. Her main advice for CIOs - besides working with someone who knows how to hammer out lucrative compensation deals (someone like herself, for example) - is to do your homework.

Before sitting down to negotiate, page through the company's annual report or other public documents to see what senior-level executives are getting. For private companies, a bit more legwork is required. Try to talk to executives at the company. You can also research compensation at a public company in the same industry. (Be prepared, however, to provide some facts of your own. Lieberman says that it's not unusual for job candidates to be asked for their three most recent W-2s. So forget about padding your salary by $100K.) With the economy sagging, Lieberman expects CIO job candidates to get about two-thirds of what they ask for, provided, of course, that their concept of what they're worth is grounded in reality. With this in mind, make a wish list and prioritise. If money is what you want, a salary that's 25 percent higher than your current one is achievable. So is a bonus that's about 40 percent of the base salary.

But what about the other stuff? What about the country club membership and relocation expenses, perks you couldn't uncover from the annual report? How do you ask your potential new employer about them? You don't want to come across as a self-absorbed, status-seeking greed-pod, so saying "I expect a signing bonus, a country club membership and reimbursement for all my moving expenses" isn't smart. Instead, say that you're looking forward to being a member of the executive team and, of course, you're anticipating being treated as such. In order to be viewed as a teammate, in order to be a fully vested team player, you'll need to be able to socialise with the other executives outside the office. On the golf course, for example.

Judy B. Homer, president and principal of J.B. Homer Associates, an executive search firm in New York City, offers more pointed advice. "If you want a bonus, put faith in your ability by suggesting that the money be tied to performance milestones," she says. In this way, you're demonstrating your eagerness to roll up your sleeves and get to work while at the same time supplying the organisation with an incentive for giving you a bonus. As for other perks, such as a company-paid MBA or that country club membership, you may have to engage in a bit of salesmanship. "Try to make a case as to how this might be beneficial to the company," Homer says. "You might argue that an MBA will make you a more qualified business-oriented executive and that golf will promote business contacts."

Your chances of getting what you want are greatly improved if you understand the company's official policies or unwritten practices. And Lieberman contends that the best way to unearth this information is to ask. To get a complete picture of what other executives get, however, don't come right out and say "Does this position include a bonus?" Instead, ask what benefits are normally included in executive compensation.

Lieberman admits that such questions may put your potential employer on the spot, but most companies will be forthcoming. And by asking for relevant information in a diplomatic way, Lieberman believes that you're sending your prospective employer a good message. "The company should recognise that you're doing due diligence in getting the whole set of facts," she says.

By collecting all the information you can, you put yourself in a great spot to negotiate. "Many CIOs get hung up on the salary to the point where they could miss out on a potentially great opportunity," Lieberman says. If you have complete information about bonuses, medical benefits, relocation expenses and other perks, you can trade bucks for benefits. And benefits can be more valuable than bucks; benefits aren't taxed.

Two final pieces of advice: If you're happy with the deal, get it in writing. And before you resign from your current job, make sure you pass any drug tests or physicals your new employer requires. If you fail, the only thing your excellent negotiation adventure will have gained you is a trip to the outplacement office.

Opinion and Knowledge Management Editor Megan Santosus can be reached at


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