Career Negotiations Podcast

Product Manager Salary Negotiation - How to Negotiate a Product Manager Salary

• Brandon Bramley

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Do you know how to negotiate a product manager salary? In this episode, I cover product manager compensation, my proven step-by-step product manager salary negotiation strategy, and some common mistakes to avoid during a PM salary negotiation.

That way you have negotiation advice that is based on hundreds of salary negotiations and actually work for product managers.

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WHO AM I

I'm Brandon, the Founder and Lead Negotiator at TheSalaryNegotiator.com. As a former corporate negotiator, I now help employees increase their compensation. Through hundreds of salary negotiations, I've helped career professionals secure over $175 million in additional compensation. My expertise is backed by more than 150 five-star reviews from career professionals on Google and Trustpilot.

Brandon Bramley:

Product managers typically receive competitive compensation and perks, but how do you know if your job offer is actually competitive before you accept it? In this episode, my goal is to cover everything you're going to need to confidently navigate a product manager's salary negotiation (https://www. thesalarynegotiator. com/resource-center/how-to-negotiate-a-product-manager-job-offer) and ensure you get a competitive offer. I'm first going to cover the compensation package structure for most product management roles so you know more about the product manager's base salary, the bonus, equity package and sign-up bonuses you might get. That way, you know exactly what to expect in the offer. Then I'm gonna walk you through my five recommended steps for negotiating a product manager job offer that are proven through real product manager salary negotiations that I've actually led for my clients. That way, you're gonna be able to filter out some of the bad advice out there and use salary negotiation strategies that are actually gonna work. And at the end of the episode, my goal is to highlight three common mistakes that I see in a lot of product manager salary negotiations that you can avoid. That way, you don't risk the opportunity and you do actually secure competitive compensation. So let's go ahead and get into the negotiation. Hey everyone, welcome back to the channel. If you're new here, my name is Brandon Bramley and I'm the founder and lead negotiator at thesalarynegotiator. com (https://www. thesalarynegotiator. com/). I provide professional Java for negotiation, coaching, salary negotiation courses (https://www. thesalarynegotiator. com/courses) and tools (https://www. thesalarynegotiator. com/salary-negotiation-templates) to help professionals like you navigate the negotiation process and secure competitive compensation. I'm not just one of those career coaches or recruiters out there giving out generic salary negotiation advice. There's already enough bad advice floating around online. Instead, I personally led hundreds of salary negotiations across various roles, helping my clients secure hundreds of millions more in compensation. My background is actually in strategic negotiations, and my goal is to debunk some of the bad advice out there and give you proven salary negotiation strategies that are actually going to help you earn more. So, if you're a career professional looking to earn competitive pay, subscribe here below for actionable tips and, when you are ready to take your negotiations to the next level, visit us at thesalarynegotiatorcom for coaching courses, tools that are designed to help you get the best offer possible.

Brandon Bramley:

Now, before we dive into how to negotiate a product manager salary, let's talk about the compensation components (https://www. thesalarynegotiator. com/product-manager-salary), because it's really important to understand the differences between base salary and total compensation before you enter a negotiation. Too many product managers that I work with focus only on the base salary for a role, but that's honestly just one piece of the puzzle when it comes to pay as a product manager. So when you're considering a new company, you really need to look at the whole picture, which is your total monetary take on pay right. This is also known as your total compensation. This is going to include base salary, any bonuses, annual bonus, the value of your vesting equity each year if you're getting equity and any sign-on bonuses. Now you might find four compensation components in a product manager offer package. First, there's going to be your product manager base salary. This is your consistent, guaranteed pay that you're going to see in every paycheck and it's really only going to change with promotions or merit increases, since it's a set rate. I'm not going to spend too much time here, since most of you should receive this in a salaried role, but the other items I want to highlight is, second, that you're hopefully going to get an annual performance bonus as a product manager, which is a percentage of your base salary. Typically and this is going to range depending on the product management level of the role right it can be 10 to 50, it can even be higher. It is specific to the level and the company. It can be based on either your personal performance or the company performance, and it's typically paid out annually, so it can fluctuate. While the product manager bonus is tied to your base salary, we've found that it's generally not negotiable, but if you do negotiate a higher base salary, the bonus is going to increase along with that as well, so keep that in mind.

Brandon Bramley:

Third, you'll hopefully receive equity as a product manager. It usually is going to come into the form of either restricted stock units, which are RSUs, or employee stock options. Rsus are going to represent actual stock in that company, which means you're going to receive shares of the company's stock outright once it vests. Stock options are actually going to give you the right to purchase the company's stock at a predetermined price. For example, you have to pay an exercise price or a cost to actually own these options and convert them into shares. So completely different from RSUs and those are going to be a lot more common at startups and items like that, where RSUs are usually at more well-established public companies Product manager equity grants, though, are also going to come with a stock vesting schedule, which means you're going to need to actually wait for this equity to best according that schedule before you actually own the shares or options.

Brandon Bramley:

Most stock vesting periods that we see are either three to four years, with the equity vesting increments over that time. The stock vesting schedule may be evenly distributed or staggered. So, for example, let's take a look at the Meta's RSU vesting schedule. It's a four year period with equal annual vesting, meaning 25% best each year. So 25% of year one, 25% at the end of the year two, 25% at the end of the year three and 25% at the end of year four, right? However, if we take a look at the Amazon RSU vesting schedule, it's a staggered approach where, instead of it being equal, it's staggered, with 5% vesting at the end of the year one, 15% at the end of year two and then 40% in year three and the remaining 40% in year four. So companies are always gonna have their own specific vesting schedules for product managers. So keep that in mind when you're reviewing the package.

Brandon Bramley:

And one thing I do wanna call out specifically about equity is that you do not receive the full equity value upfront, but you do share in the value fluctuations over that period. So the good thing is, if the stock price goes up, so does the value of your equity as a product manager. However, the flip side is, if that stock price drops, your equity value and your total compensation decreases as well. So there are risks with equity and it's also important to note that if you do leave before the equity fully vests, then you'll forfeit the unvested portion of your product manager equity.

Brandon Bramley:

Finally, there are sign-on bonuses. For most product management roles, this is going to be a one-time cash payment, typically paid out 30 days after you start. It's often designed to offset lost incentives or equity from your previous company, or even just as an incentive to join the new company. So we've found that product manager sign-on bonuses aren't always included in the initial offer, so they're usually going to require negotiation. Luckily, I've had great success securing these for my clients and the product managers I work with, so if you use the right strategies, you should be able to get one. Another item I want to call out is some companies that do offer equity to product managers might also provide annual equity freshers, which are essentially additional equity grants that you get each year that have their own stock vesting schedules. However, I do want to call out that stock refreshers aren't always guaranteed and they can vary significantly, so I typically don't include them in the total compensation calculations, but it's definitely worth asking your recruiter about stock refreshes and if these exist, but just note that they sometimes withhold specifics about those perks.

Brandon Bramley:

Now these four main product manager salary components your base salary, your bonus, your equity and your signup bonus are gonna make up your total compensation as a product manager. To help you visualize this, we have a total compensation calculator on our site. It lets you input your base salary, your bonus, percentage, equity grant and signup bonus. Then it's gonna show estimated compensation over that vesting period, both in total and on an annual basis. You can find our free total compensation calculator at thesalarynegotiatorcom and I'll also link it to in the episode notes below so you can use this free tool and find out realistically what your total compensation looks like in your new offer package.

Brandon Bramley:

All right, now that we've covered how product manager's compensation works, let's discuss the product manager salary negotiation steps. This is where the fun part begins and these are the strategies I've used to successfully negotiate many product manager job offers, and I'm going to recommend that you follow them to navigate any type of product manager salary negotiation once you have an offer in hand. So once you have a product manager job offer, the first step to negotiating is to make sure you fully understand the compensation components and benefits in the product manager offer package. The biggest takeaway from this is that understanding the product manager total comp before negotiating is very important. That's also why I spent the first part of this episode covering those details. That way, you know exactly how to value the product manager offer and what to negotiate, including everything from not only your base salary but also your bonus, your equity and your sign-on bonus incentives as well.

Brandon Bramley:

The second step is what I call doing your due diligence and asking strategic questions. This is where you're going to review the pm offer and come back with a list of questions for the recruiting team. This not only helps you clarify any questions you might have about the offer, but it also allows you to strategically ask questions that are actually going to build salary negotiation leverage. In these discussions, you can call out things that might not be as competitive as your current company or what competitors offer, and if you need some ideas, you can go ahead and grab our list of strategic questions to ask from our templates page or from our salary negotiation course. But as a PM, I highly recommend don't skip this step, even if you think you understand the offer, which I experienced a lot with product managers. This step is important for building negotiation leverage by showing you're doing your due diligence and research on the offer. That way, when you do send a product manager counteroffer, you're not coming out of left field saying, hey, I just want more money. Instead, it shows a hey, I've done the research, I pulled in the data and, after meeting with other colleagues and professionals and doing my research data, and after meeting with other colleagues and professionals and doing my research, I should be paid more in this role. All right, so it's very important.

Brandon Bramley:

Now the third step is to do the product manager compensation research and find not only the base salary range but also the total compensation ranges for the specific role, location and level at the new company. You can honestly use various online resources to find this data, but make sure you use multiple services and you average results. We're trying to identify the compensation ranges so we can see where your initial product manager offer sits and how much room there is for improvement, because what we found is most companies try to hire PMs in the lower to mid end of the pay bands, but I always suggest pushing towards the top end of the product manager pay ranges for your role Because at the end of the day, you should be paid the same as anyone else in that position because the company is going to expect you to do the same level of work. But just remember, if you are using publicly reported data, it might not always be accurate. Product managers might report higher equity than a new hire would get due to stock appreciation, or they have not uploaded the compensation correctly. We're all error prone. So if you want help with this, you can use our compensation research comparison tool on our template page or in our course to help organize this data and build a counteroffer and your ask before you send something over.

Brandon Bramley:

Okay, so once you have a product manager compensation research done and you've gotten the answers to all your questions, you're finally ready to send over a product manager counteroffer to the recruiting team. This is where we take a database approach and we craft a product manager counteroffer to send to the recruiting team. This is where we take a database approach and we craft a product manager counteroffer to send to the recruiting team. We'll present the top end of the range you're targeting based on your research, and we're going to call it any items that weren't competitive based on your due diligence questions. I am going to highly suggest that you do this by email, because it gives the recruiter everything they need to advocate for you and they can simply send your points back to the comp team Instead of hoping that you cover everything correctly. Plus, if you end up on a call, recruiters negotiate offers every single day and they're going to be ready with tactics to cut you off or steer you in a different direction if you try to counter verbally. So my recommendation is don't do it. Stick to an email and be prepared for a follow-up conversation. That's also why the final step after sending a product manager counter offer (https://www. thesalarynegotiator. com/store/counteroffer-examples) is being prepared to handle recruiter pushback.

Brandon Bramley:

It's almost always guaranteed that you're going to get pushback from the recruiting team. So tech recruiters that we found are trained to deter you from negotiating salary and get you to accept the initial offer. They usually also need to do this before they actually take something back to the compensation team. So you need to be prepared for that pushback and know exactly what to say to overcome those objections, to get them to take back your concerns. So essentially, what you want to do is say that you understand their concerns, but nicely reiterate yours and ask them to take back to the comp team for one more look. It might take overcoming a few objections, but if you do this correctly, once they agree to take it back for another look, nine times out of ten they're going to come back with a better product manager offer package and you're going to get an increase in pay. If you need help with us on exactly how to overcome an objection, we have a full list of objection handling responses on our templates page and in our course for download. That way you know exactly how to handle this recruiter pushback. So, one, you don't jeopardize the opportunity, but two, you do strategically overcome this in this step.

Brandon Bramley:

From here, the recruiter will either come back with a better offer that fits your needs or is lower than your ass. At that point you can decide on if you want to send another product manager counter offer to push again or if you're ready to accept the updated offer. Just note that negotiating salary is not like how you negotiate with a car salesman. All right, there really isn't that much back and forth and it's not aggressive. So you really don't want to send more than two product manager salary counters, otherwise you are going to risk coming off as too aggressive and you could jeopardize the relationship, so keep that in mind. All right For you product managers out there.

Brandon Bramley:

The last thing I want to cover is a few salary negotiation mistakes before you decide to negotiate a product manager offer letter. The reason I call this out is because I see a lot of mistakes happen that actually jeopardize not only the relationship but also the negotiation, so I want to make sure you understand some of these before you go into a negotiation. The main item I want to make sure you understand some of these before you go into a negotiation the main item I want to recommend against is sharing salary expectations with the recruiting team. Okay, and I highly recommend you don't do this because, if you think about it, if you throw out a number that's lower than what they offer, maybe you're basing that off what you're currently making or you're just thinking in terms of base salary instead of total compensation, you're likely to actually get a less competitive compensation package at the low end of the range. Or, if this isn't tech, it's very possible you actually get down level, which is very common for product managers. Okay, if you'll take a less salary and that falls into a lower pay range for a lower level, they're probably going to down level and push you into those. The other side, if you think it's a good idea to throw out a high number, thinking it's going to give you a competitive offer that actually could jeopardize even getting the package right, they could say shoot. Honestly, I don't think we can afford this PM, so let's go with a different candidate instead. So it's also not a good strategy. And also, if you think about it, the recruiter knows exactly how much they can pay for this product management role. So you're going to want to always turn that question back on them to learn more about the base salary and total compensation ranges for the role throughout the interview process.

Brandon Bramley:

The second mistake I want to recommend you avoiding is making sure that you're realistic about what you should ask for in your product manager counter offer. Too often I see PMs that ask for way too much. That just doesn't make sense, right. They either get laughed at or it comes off as too aggressive, and in some cases, they can actually get the offer or send it right. So you're going to want to avoid that and you should always take a data-based approach when you're going through the product manager salary negotiation to make sure they're asking for realistic compensation that the company can actually provide. At the end of the day, each company has set compensation bands for every level and they're only going to pay within those bands for specific pm roles and levels. So don't jeopardize the offer by coming off as too aggressive and asking for unrealistic numbers that just don't make sense. And finally, don't be worried about a product manager salary negotiation. You might feel nervous, but as long as you follow proven strategies and keep the negotiation professional, there's no reason you should risk the product manager job offer right. So if you actually do it correctly, you should secure a better product manager offer package before starting the new role. So have confidence in this, but make sure you're following proven strategies or get the support you need to help strategically navigate a product manager offer negotiation.

Brandon Bramley:

This wraps up this episode on product manager salary negotiation. I hope this breakdown of a product manager's compensation structures, our proven product manager salary negotiation strategies and the negotiation mistakes you should avoid as a PM helps you feel more confident in these discussions. If you are serious about getting the best possible offer and paying your new role, I highly suggest you don't go into the salary negotiation alone. Head over to thesalarynegotiator. com to either work with me directly as your salary negotiation coach, or check out my salary negotiation courses (https://www. thesalarynegotiator. com/job-offer-negotiation-course) and tools (https://www. thesalarynegotiator. com/salary-negotiation-course) on our webpage. You will find all the links in the episode notes below. That way, you have the strategies and tools you need to make better pay. And if you did find this episode helpful, make sure you subscribe, leave a comment and share it with someone who could actually use this advice in their career. Thanks for tuning in and happy negotiating. See you next time.

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