As discussed in my last post, there are several critical steps to take in the negotiation of an employment package. Let’s move on to steps #2 and 3.
- Show Me the Money. In evaluating the salary component of a compensation package, it is essential that the executive be realistic not only about his or her financial requirements but also about the value he or she brings to the employer and what the market will bear. The executive should gather his or her own market intelligence and be an informed participant in the negotiation. Knowing the “going rate” for executives with similar skills, talents and experience is the best way to gauge the strength of the compensation offer.
- Spell out the Equity. The employment package should specify the level of equity grants, how they will vest and their forfeiture provisions. The equity grant provision(s) must take into consideration the terms and conditions of the governing plan documents, and relevant IRS requirements, federal securities laws, and other applicable rules and regulations.
Please subscribe and return for future posts on other critical steps.