42 Minutes of $10m Salary Negotiation Advice (From A Sr. Director In Tech) 

• Importance of Negotiation:

  • Significant career payoff.
  • Difficult to adjust compensation once in a role, especially in big tech.
  • Promotions can take 2-4 years.
  • Annual raises and bonuses are based on starting salary.
  • Greatest leverage is at the time of the initial job offer.
  • Negotiation skills improve over time.

• Common Misconceptions:

  • Failed negotiations often stem from not understanding the process.
  • Successful negotiation requires the other side to:
    • Like you.
    • Think you deserve the money.
    • Justify the decision internally.
    • Believe you are winnable.

• Key Elements for Successful Negotiation:

  • Likeability: Avoid being a jerk.
  • Deservedness: Justify your worth.
  • Internal Justification: Assist the company in justifying your salary internally.
  • Winnability: Don’t push too hard or present excessively high counteroffers.

• Deepak Malhotra’s Negotiation Formula:

  • Balancing likeability and questioning valuation.
  • Hiring managers value a well-negotiated hire more.

• Stakeholders in the Negotiation Process:

  • Recruiter: communicator, not decision-maker.
  • Hiring Manager: Future boss, potential advocate.
  • Skip Manager: Boss’s boss, can approve exceptions.
  • Compensation Committee/Finance: Approves compensation.

• Preparation Before Interviews:

  • Develop a strategy.
  • Research companies and set anchor and target numbers.
  • Create and practice a negotiation script.

• Leverage in Negotiation:

  • Types of Leverage:
    • Multiple offers.
    • Willingness to walk away.
    • Internal framing and advocacy.
  • Avoiding Desperation: Control emotions even in difficult situations.

• Psychological Aspect of Negotiation:

  • Expectations influence negotiation outcomes.
  • Confidence in your worth impacts behavior and results.

• Research and Data Gathering:

  • Use sources like Levels FYI and Blind for accurate data.
  • Consider competitor data if direct data is unavailable.
  • Consult recruiting firms and venture capital firms for market data.

• Developing Key Numbers:

  • Anchor: High but realistic number.
  • Target: Desired number, ideally at the top of the range.
  • Walkaway: Minimum acceptable number.

• Components of Total Compensation:

  • Base Salary: Monthly paycheck.
  • Equity: Stock options or RSUs.
  • Performance Bonus: Based on personal and company performance.
  • Sign-on Bonus: One-time payment upon joining.

• Evaluating Job Offers:

  • Total Compensation: Base salary, equity, bonuses.
  • Career Value: Future career impact and skill development.
  • Lifestyle Factors: Remote work, location, PTO, and work-life balance.

• Strategic Planning:

  • Consider long-term career goals and how the offer aligns with them.
  • Ensure the role fills skill gaps for future promotions.

Negotiation Timeline Key Points:

• Application and Initial Planning:

  • Determine which companies to apply to and when.
  • Set expectations for level and title.

• First Recruiter Call:

  • Understand company and role.
  • Avoid discussing salary expectations.
  • Do not negotiate at this stage.

• Interview Stage:

  • Boost perceived value by performing well in interviews.
  • Gain more leverage through additional offers or demonstrating high value.

• Offer Stage:

  • Pre-offer stage: Build advocates within the company.
  • Offer call: Prepare to counter if multiple offers are on the table.
  • Ensure proper internal justification for salary demands.

First Recruiter Screen Tips:

• Avoid Early Negotiation:

  • Do not discuss expected or past salary.
  • The recruiter wants to settle on a number to make their job easier.
  • Early negotiation reduces leverage as perceived value is lowest.

• Responding to Salary Questions:

  • Do not give a specific number.
  • Flip the question: Ask about their budget and band for the role.
  • Avoid weeding yourself out by mentioning a too-high or too-low number.

• Understanding Company Leverage:

  • Investigate how long they’ve been looking for the role.
  • Determine the importance and uniqueness of the role.
  • Learn about their financial situation (e.g., cash constraints, equity raises).

• Negotiating the Process:

  • Identify decision-makers and stages in the hiring process.
  • Ensure the level and scope of the role match your expectations.

Handling Specific Salary Questions:

• Common Responses:

  • “It’s too early in the process to discuss salary. Let’s revisit this after I learn more about the role and the company.”
  • “What is the budget and salary band for this role?”
  • “How does your company value equity, and how is it currently priced?”

• Additional Questions:

  • “What is your compensation philosophy?”
  • “How do your levels compare to those at top-paying companies like Meta or Google?”

Importance of Levels:

• Impact on Compensation:

  • Different levels can significantly affect salary (e.g., E5 vs. E6 at Meta).
  • Justify why you should interview for a higher level if necessary.

• Understanding Company Philosophies:

  • Companies vary in their compensation strategies (e.g., bottom 25% vs. top 80%).

Documentation and Communication:

• Get Everything in Writing:
  • Avoid miscommunication by documenting all negotiations.
  • Confirm discussions via email to prevent surprises later.

Interview Stage Strategy:

• Build Rapport:

  • Connect with the hiring manager, recruiter, skip manager, and team.
  • Ensure they believe you deserve the role and can justify the salary internally.

• Show Unique Value:

  • Highlight what sets you apart.
  • Demonstrate strong interest in the company.

• Manage Timelines:

  • Align interview and offer timelines to maximize leverage.
  • Prepare for potential promotion or other leverage points at your current job.

Showcasing Unique Value:

• Outcome-Oriented Value: Companies value the outcomes you can produce, not just your personal attributes.

  • Sales: Ability to hit quotas.
  • Engineering: Upgrading infrastructure, avoiding downtime, rapid experimentation, building tricky features.
  • Success Probability: Demonstrate a high probability of achieving desired outcomes.

• Effort and Risk Considerations:

  • Effort required for training and monitoring.
  • Risk of not delivering as expected or leaving the company.

• Ways to Improve Perceived Value:

  • Highlight past successes and impacts.
  • Showcase relevant market, industry, and technical experience.
  • Present a six-month plan for job performance.

Offer Stage:

• Pre-Offer Tough Questions:

  • Understand why tough questions are asked to gauge winnability and genuine interest.
  • Respond by probing the reasons behind their questions.

• Handling Salary Expectation Questions:

  • Do not disclose specific numbers.
  • Reassure commitment to finding a mutually agreeable solution.

• Interest and Justification:

  • Demonstrate excitement about the company and relevant experience.
  • Mention other interviews subtly to signal value without detailed counteroffers.

Receiving the Offer:

• Neutral Reaction:

  • Avoid showing excitement or disappointment.
  • Request offer details in writing for clarity and confirmation.

• Buying Time:

  • Request time to review the offer and consult with mentors or significant others.
  • Ask clarifying questions about offer details.

• Using New Information:

  • Leverage new information to justify counteroffers.
  • Discuss discrepancies in valuations or terms for further negotiation.

Counteroffer Strategy:

• Preparation:

  • Reiterate unique value and success probability.
  • Set up calls with internal advocates to gain their support.

• Submitting the Counter:

  • Send the counter to the recruiter with clear justification.
  • Engage internal advocates to push for higher compensation.

• Handling Multiple Offers:

  • Negotiate the top offer up first, then use it to leverage higher offers from other companies.
  • Frame offers appropriately to prevent companies from feeling outcompeted.

• Communication Method:

  • Prefer phone calls for rapport and real-time adjustments, followed by email confirmation.
  • Use email if nervous or prone to emotional responses, ensuring prior rapport-building calls.

Dealing with Lowball Offers:

• Investigate Reasons:

  • Ask if the low offer is due to the role’s value or personal assessment.
  • Address any specific concerns raised.

• Breaking Their Frame:

  • Highlight the impact and market value of the role.
  • Suggest taking on more scope if the role’s value is the issue.

• Using Mirroring and Labeling:

  • Employ techniques from Chris Voss’s “Never Split the Difference” to uncover team concerns and negotiate better terms.
  • Mirror key phrases and label concerns to prompt further explanation.

Final Tips:

• Documentation:

  • Ensure all terms are documented to prevent misunderstandings.
  • Confirm discussions via email to maintain a record.

• Building Internal Advocacy:

  • Maintain strong relationships with hiring managers and executives.
  • Clearly communicate your value and plans to succeed in the role.

First Counter Offer:

1. Thank Them for the Offer:

   • Express appreciation for the offer.

2. Identify the Gap:

   • Acknowledge the difference between the offer and your expectations.

3. Unique Value Pitch:

   • Reiterate the value you bring to the company.
   • Emphasize low risk and high probability of success.

4. Total Compensation Anchor:

   • Optionally provide a specific total compensation figure.
   • Indicate preference for cash or equity based on personal priorities.
   • Mention any potential bonuses or vesting from your current company.

5. Market Data and Comparisons:

   • Use market data if available.
   • Discuss the risks and benefits of different types of companies (e.g., startups vs. FAANG).

Second Counter Offer:

1. Thank Them Again:

   • Maintain a positive and appreciative tone.

2. Advocate Support:

   • Engage advocates within the company to support your request for higher compensation.

3. Alternative Compensation Elements:

   • Suggest a sign-on bonus.
   • Propose a one-time equity boost or guaranteed refresher.
   • Mention other relevant benefits.

Avoiding Ultimatums:

• Graceful Departure:
  • If walking away, do so respectfully to maintain a positive relationship for potential future opportunities.

Effective Use of Pre-Agreements:

1. When to Use:

   • Consider using if there’s a market downturn or hiring freeze.
   • Effective for closing deals when the company makes a significant exception for you.

2. Phrase Carefully:

   • State willingness to sign if certain conditions are met.

Company Tactics to Watch For:

1. Exhaustion:

   • Don’t rush into accepting an offer due to fatigue from the process.
   • Invest time in final negotiations.

2. Urgency:

   • Companies may pressure you to decide quickly.
   • Buy time by involving mentors or family in the decision-making process.

3. Desperation:

   • Avoid revealing desperation, which can lead to lower offers.
   • Be prepared to walk away if necessary.

Final Steps:

1. Accept the Best Offer:

   • Choose the offer with the highest overall value, considering both compensation and personal priorities.

2. Reflect and Learn:

   • Review the negotiation process and identify lessons for future negotiations.