Studying for an MBA degree can be the first step on your journey to the C-suite. The comprehensive business education that the degree program provides will equip you for careers across an array of industries and for roles in upper management and at the executive level.
If your professional trajectory is geared toward the C-suite, there will be multiple steps on the career ladder that you need to climb before you get there. One essential and unavoidable component of this process is negotiating compensation, which, as an article published by careers website Monster pointed out, can become more complicated at the upper management and executive level. This can be attributed to the fact that benefits and bonuses can comprise a more significant portion of your compensation.
If you are eager to learn more about this potentially delicate process and ensure that your negotiations are successful, review the effective tips below:
1. Find the right time
This first tip is crucial and applies across the board: Be sure not to initiate compensation negotiations too early in the hiring process. Joann S. Lublin, writing in The Wall Street Journal, interviewed a number of executives about the negotiation process, many of whom reported that bold assertions and demands regarding pay too early could signify to employers that your desire for compensation outweighs your dedication to the work. In fact, any discussion about money, whether it is your current compensation package or expectations for the future, should not be a feature of the first meeting. Lublin interviewed the CEO of DHR International, Geoff Hoffman, who recounted a time that a candidate boasted about his current pay within minutes of arriving for his interview. Hoffman explained that the moment essentially ruined the candidate’s chances of success and the hiring committee decided to employ another individual.
The “right” time for negotiation is typically after an initial job offer has been extended.
However, as Bartie Scott explained in Inc., you may find that the employer you are interviewing for asks what you are expecting in terms of salary, benefits, bonuses and stock options within the first interview. The key to navigate this potentially tricky question is to explain that you are eager to discuss more about the role before discussions about money begin. Scott noted that it is acceptable to explain to the employer what you currently make, but it is wise not to elaborate any further than that. Remaining somewhat guarded at this stage is important because even if the employer asks you about money, making early demands can reflect poorly on you.
2. Take a critical look at the compensation offer
When an initial compensation offer has been given to you, it is important to take the time to examine it with a critical eye, an article published by Monster explained. Salaries at the executive level are not always composed entirely of base compensation. Some benefit packages may have a smaller base salary but with additional compensation provided via stock or ownership options. Once you have ascertained the sources of your income, it is crucial to research, ideally with the help of a financial planner, how much everything translates to in terms of tangible worth—monetary or otherwise. This is particularly important if a significant portion of the compensation offer is in the form of stocks and shares. Andrew Avellan, a financial planner and founding partner of Philadelphia Wealth Management Co., elaborated on the importance of financial research when it comes to your compensation offer:
“Calculate what each package might be worth using several predictable outcomes,” he explained, “such as stock price with good growth, no growth or loss, as a way to attempt to put some math around a decision.”
3. Be cognizant of your language and tone
After an opening offer has been extended by the employer, and once you have scrutinized the offer, it is time to begin the negotiation process, which must be handled with care. Amy Gallo, writing in the Harvard Business Review, advised ensuring that the language you use is upbeat and solutions-oriented. Do not simply state what you want without being open to suggestions and revisions. The key is to strike a balance of tone—be courteous, yet firm, especially if you feel that the hiring managers are being unfair.
4. Provide room for negotiation
The negotiation process involves compromise, and it is unlikely that you will be successful if you refuse to negotiate. Bartie Scott, writing in Inc., advised conducting research and having a clear idea in mind of the lowest amount you could possibly accept and then creating a compensation range with that as the base minimum. As with salary negotiations at any level, always begin by suggesting a figure that is above what you will likely receive and then negotiate down, being sure not to accept a figure below your determined base minimum. Scott also explained that, at the executive level, it is important to negotiate on benefits and perks that may be overlooked in the initial compensation package, such as a company car and expenses-paid travel.
Consider Villanova University
Before you are able to begin negotiating salaries at the executive level, there are a number of career steps you will need to take to get there. An important first step on this professional journey could be returning to the classroom to study for your MBA. If you are eager to take this step but are unsure if you will be able to accommodate study in your busy schedule, consider applying to Villanova University’s online MBA program. Led by renowned faculty, the online program offers you the same high-level education offered on campus, but with the ease and flexibility of working at a time that suits you best. Learn more about Villanova University’s online MBA program.