Career Negotiations Podcast

Engineering Manager Salary Negotiation - How to Negotiate an Engineering Manager Salary

• Brandon Bramley

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Do you know how to negotiate an engineering manager salary? In this episode, I cover engineering manager compensation, my proven step-by-step engineering manager salary negotiation strategies, and some common mistakes to avoid during an EM salary negotiation.

That way you have negotiation advice that is based on hundreds of salary negotiations and actually work for engineering 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:

Engineering managers typically receive competitive compensation perks, and that makes sense, since they lead big engineering teams. But how are you going to know if your job offer is actually competitive before you accept it? In this episode, my goal is to cover everything you need to confidently navigate an engineering manager salary negotiation and know exactly how much you should make. I'm first going to cover the compensation package structure for most engineering management roles, so you're going to know more about an EM's base salary, bonus, equity package and any sign-on bonuses you might get. That way, you know exactly what to expect in an EM offer package. Then I'm going to walk you through my five recommended steps for negotiating an engineering manager job offer that are proven through real engineering manager salary negotiations that I've actually led for my clients. That way you can filter out some of the banded ice out there floating online and use salary negotiation strategies that are actually going to work in these discussions. And then I'm going to close out the episode by highlighting three common mistakes you can avoid in your EM salary negotiation. That way you don't risk the opportunity and you do actually secure competitive compensation. So let's go ahead and get into it.

Brandon Bramley:

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. I provide professional job offer negotiation coaching, salary negotiation courses and tools to help professionals like you navigate the negotiation process and secure competitive pay. I'm not just a career coach or recruiter 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 millions more in compensation. My background is actually in strategic negotiation and my goal is to debunk some of the bad advice out there and give you strategies that are actually going to help you earn more. So if you're a career professional looking to earn competitive pay, subscribe here for actionable tips and, when you're ready to take your negotiations to the next level, visit thesalarynegotiatorcom for coaching, courses and tools designed to help you negotiate competitive packages.

Brandon Bramley:

Okay, so before we dive into how to negotiate an engineering manager salary (https://www. thesalarynegotiator. com/resource-center/engineering-manager-salary-negotiation), let's talk about the compensation components, because it's really important to understand the differences between base salary and total compensation. Too many engineering managers focus only on the base salary for a role, but when it comes to that, it's just one piece of the puzzle and it doesn't actually cover the whole comp. As you'll see as an EM. So when considering a new company, you need to actually take a look at the whole picture, which is your monetary take-home pay, also known as total compensation. This is going to include base salary, any bonuses you might get the value of your investing equity each year and any sign-out bonuses. Now you might find these four compensation components in an engineering manager offer package.

Brandon Bramley:

First, there's your engineering manager base salary. This is your consistent guaranteed pay that you're going to see in every paycheck. I'm not going to spend too much time here, because most people receive a base salary in their salaried role and it's honestly only going to change with promotions or merit increases, since it's a set rate. But it's also one of the items that is the most negotiable. Second, you might have an annual performance bonus as an engineering manager, which is a percentage of the base salary. Typically, this is going to range on the engineering management level of the role you might be in and it can be based on personal or company performance, and it's going to be paid out annually or quarterly or another time frame, so it can fluctuate, while the engineering manager bonus is tied to your base salary. I've found that it's really not negotiable. But the cool thing is, if you actually negotiate a better base salary, since your bonus is a percentage of that it's actually going to increase along with that. So keep that in mind as you navigate the negotiations.

Brandon Bramley:

Third, you're hopefully going to receive equity as an engineering manager. At most companies it usually comes in the form of either restricted stock units or employee stock options. Restricted stock units, which are RSUs, represent actual stock, which means you receive shares of the company stock outright once vested Stock options give you the right to purchase a company stock at a predetermined price, for example, you have to pay to exercise these options before you actually own and receive the shares. So two big differences Engineering manager equity grants are going to come with a stock vesting schedule, which means you'll need to wait for the equity to the best according to that schedule before you actually own the shares or options. Most stock vesting periods that we see are either three to four years, with equity vesting in increments. Over that time the stock vesting schedule may be evenly distributed or staggered at different companies. So to explain this, for example, at Apple's RSU's vesting schedule is going to be a four-year period with equal annually vesting. So that means 25% is vesting each year 25% in year one, 25% year two, 25% year three and 25% year four. However, you're going to find a staggered approach for the Google RSU vesting schedule right. So that's 38% vests at the end of the year one, 32% at the end of the year two, 20% a year four and then only 10% a year four. So companies are going to have their own specific vesting schedule for engineering managers. So keep that in mind as you're reviewing the offer package and the compensation components.

Brandon Bramley:

The other thing to call out with equity is you're not going to get the value of the equity upfront, but you do share in the value fluctuations over that period. So if the stock price goes up, so does the value of your equity as an engineering manager. The bad thing is is the flip side is, if the stock price drops, so does the value of your equity and your total compensation. So there are risks with equity. It's also good to note that if you leave before your equity vest, then you're actually going to forfeit that unvested portion of your engineering manager equity. So keep that in mind when you're starting to think about when you're going to transition and when you should depart a company.

Brandon Bramley:

Finally, there are sign-on bonuses for engineering managers. This is usually a one-time cash payment, typically paid out 30 days after you start. It's often designed to offset loss incentives or equity from your previous company or just as an incentive to join the new company. Em sign-on bonuses aren't always included in the initial offer, so please note that it does usually require negotiation, but the good thing is I've had great success in securing them for engineering managers I work with, so it can be done. It just does take a little bit of strategy to get you there, and especially if you're trying to secure a large one. Another item I want to call out is that some companies that offer equity engineering managers might also provide annual equity refreshes or stock refreshes, which are essentially additional equity grants each year. However, these stock refreshes aren't always guaranteed and they can vary significantly, so I don't usually include them in my total compensation calculations, but it is worth it for you to ask the recruiter about these to see if you can get any details of how you'll get more equity in the company going forward.

Brandon Bramley:

Okay, so these four main engineering manager salary components your base salary, any bonuses, equity and sign-on bonuses are going to make up your total compensation as an engineering 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 sign-on bonus. Then it shows you your estimated compensation over that vesting period, both in total and on an annual basis. You can find our free compensation calculator at thes negotiatorcom and I'll link to it in the episode notes below so you can use this free tool and find out exactly what your total compensation is in your new offer package.

Brandon Bramley:

All right, now that we've covered how engineering managers compensation structure works, let's discuss the engineering manager salary negotiation steps. Right, this is the fun part. These are going to be the strategies I've used to successfully negotiate many engineering manager job offers, and I recommend you follow them to navigate your own engineering manager salary negotiation once you actually have an offer in hand. So once you do have an engineering manager job offer, the first step to negotiate it is to make sure you fully understand the compensation components and the benefits in your engineering manager offer package before you start negotiating. The biggest takeaway here is that understanding EM's total compensation before negotiating is very important. That's also why I spend a lot of time chatting through it, so you know exactly how to value the engineering manager offer and what to negotiate right. So you don't only focus on the base salary, but you also focus on the bonus, the equity and the sign on bonus as well, to make sure you are negotiating the entire package. So keep that in mind.

Brandon Bramley:

The second step is what I call doing your due diligence and asking strategic questions. This is where you review the engineering manager offer and you're going to come back with a list of questions for the recruiter. This not only helps you clarify any questions you might have about the offer before you move forward, but it also allows you to strategically ask questions that are actually going to build salary negotiation leverage, if worded correctly, right, so you can call out things that might not be as competitive as your current company or competitors offer or some other ideas. So if you need those ideas, feel free to grab our list of strategic questions on our templates page or in our course. That way, you know exactly what to ask to build this negotiation leverage before you send a counteroffer, and I highly want to recommend as an EM, don't skip this step Right, even if you're confident you think you understand everything about the offer. This step is important for building negotiation leverage. Ok, it shows you're doing your research and your due diligence on the offer before you send an engineering manager counteroffer. That way, your counteroffer doesn't come out of left field right and say, hey, I just want more money. It's hey, I've done my research, I've talked with colleagues, I found out what the pay should be and this is why you should increase it. Right, it's going to build the leverage in your negotiation. So very important and don't skip it.

Brandon Bramley:

The third step is to do engineering manager compensation research and find not only the base salary but also the total compensation ranges for the specific role, location and level at the new company. Okay, you can use various online resources to find this data, but make sure you use multiple sources and you average the results. What we're trying to do here is find the compensation ranges of what they should be, both on a base salary basis and a total compensation basis, so we can see where your initial engineering manager offer sits and how much more room there is for improvement, so can take a data-based approach. Most companies are honestly going to try to hire engineering managers at the lower to the mid-end of the pay bands, so I'm always going to suggest that you push towards the top end of the engineering manager pay bands for your role. That way, you're paid the same as anyone else that's in that position, because, at the end of the day, doesn't matter who they hire. They're hiring you for specific projects and they're gonna expect you to do the exact same amount of work.

Brandon Bramley:

Just remember, though this is publicly reported data might not always be accurate if you are using those sites, because engineering managers might report either higher equity than the new, higher get due to stock appreciation, or they might not have uploaded the compensation correctly. So if you do want help with this and you want to know how to do it correctly, feel free to pick up our compensation research comparison tool on our templates page or it's included in our course, where I actually talk through in a lot more detail of actually how to do the compensation research. So you have the data you need for your engineering manager counteroffer. All right for the fun part. So once you have the engineering manager compensation research done, this is where we want to take a database approach and craft an engineer manager counteroffer (https://www. thesalarynegotiator. com/store/counteroffer-examples) to send to the recruiting team. We're going to present the top end of the range you're targeting, based on your research, and call out any items that weren't competitive based on your due diligence, questions Right, and I'm highly going to suggest you do this by email, because it's going to give the recruiter everything they need to advocate for you and they can simply send your points to the comp team instead of hoping that if you make a call, they're going to sit there and listen, take your comments down and share those correctly, because I can assure you on that call that recruiters are prepared to negotiate because they handle offers every day. So they're a lot more prepared to you and they're going to be prepared with tactics to cut you off and steer you in a different direction if you try to counter verbally. So I usually recommend sending an email first and then being prepared for pushback, which is also why the final step in the negotiation process is being prepared for pushback.

Brandon Bramley:

After you send an injury manager counter offer right, it's almost guaranteed that you're going to get pushback from the recruiter. They're going to give you a wide variety of reasons of why they can increase it and tech recruiters, as I mentioned, are trained to deter you from negotiating okay. So you need to be prepared for this pushback and know exactly what to say to get them to actually take your concerns back to the comp team Very important To handle an objection. You're essentially going to want to go ahead and say that you understand their concerns, but nicely reiterate your ask and ask them to take it back for another look. It's going to take some getting used to, because you're going to possibly need to handle a few objections, but if you are able to overcome these effectively and get them to take another look, nine times out of 10, they're actually going to come back with a better engineering manager offer package. So, if you need help with these discussions, I talk through this a lot in my course, but then I also have our objection handling responses on our templates page, so feel free to download those and pick those up. That way, you know exactly what to say when you encounter recruiter pushback after sending a counter offer. The good news, though, is, once they do take it back from here, you're either going to come back with a better offer, or they might come back with something that's lower than your ass or not move. At that point, you can decide if you're ready to go ahead and accept or if you should send a second engineering manager counter offer.

Brandon Bramley:

The only thing I want to highlight about sending multiple counter offers is remember that negotiating salary is not like how you negotiate a car dealership, right, so it's not aggressive. There's not that much back and forth. You're usually not going to want to send more than two engineering manager salary counters. Okay, because if you start to do more than that, it could be aggressive. It could jeopardize the relationship. So try to get the most movement you can in the first one and then evaluate if it makes sense sending a second counter offer.

Brandon Bramley:

Now the last thing I want to cover is a few engineering manager salary negotiation mistakes. Before you decide to negotiate an engineering manager offer letter. Okay, there's a lot of mistakes that people make that I want you to avoid. That way, your salary negotiation comes off as professional and you actually secure better pay. So the main thing I recommend against is do not share your salary expectations or your current pay with the recruiting team at any point. Right, this is only going to work against you because if you think about it, if you throw out a number that's lower than what they could offer, or maybe you just share a base salary, it's likely going to get you a less competitive compensation package at the low end of their pay range.

Brandon Bramley:

Or if you're in tech, which most engineering managers are, it's very possible you get down leveled, right. If the compensation falls into a lower level and they know they can pay you that, they're gonna down level you and bring you in as an engineering manager, say, instead of a senior manager or a director. Okay, so don't do that. Stay away from it. And if you're one of those people that says, hey, I'm just going to throw out crazy numbers that are inflated because I think that's going to help, don't do that either. Right On the flip side, if you think it's best to throw out an inflated high number, thinking that's going to help, they'll honestly think, hey, shoot, I'm not sure if we can afford this manager, so let's go with a different candidate instead. And you's not a good strategy and stay away from that. And I also want you to remember that the recruiter knows exactly what they can pay for the role, right? They're not going to not know how much we can pay and what's budgeted for this, so why do you need to tell them? Instead, you're going to want to turn this question back on them to learn more about not only the base salary but also the total compensation range for this role. So you have that in mind as you go through the interview process and then go through the salary negotiation steps to make sure you have a competitive offer once you get it.

Brandon Bramley:

The next step I would avoid is making sure that you're realistic about what you should ask for in your engineering manager counter offer. Way too often do I see engineers ask for way too much. That just doesn't make sense, right? You're either going to get laughed at, unfortunately, or it might come off as too aggressive and it could even get the offer rescinded. So make sure you're taking a database approach as an engineering manager and you're asking for realistic compensation that the company can actually provide. Right at the end of the day, every company is going to have a set compensation band and they're only going to pay within those bands for each engineering role and level. So don't jeopardize jeopardize an em job offer by coming off as too aggressive and asking for numbers that they can never really provide. And the last thing I'll leave you with is don't be worried about an engineering manager salary negotiation, right, you might feel nervous, you may have never done this before, but as long as you're following proven strategies and you keep the negotiation professional, there's no reason you'd risk the engineering manager offer Right. If you do it right, you should hopefully secure a better engineering manager offer package before starting the new role. So have confidence at this, but make sure you're following proven strategies or get the support you need if you need help negotiating an engineering manager offer.

Brandon Bramley:

That wraps up this episode on engineering manager salary negotiation. So I hope the breakdown of an engineering manager's compensation structure, my proven engineering manager salary negotiation strategies and the negotiation mistakes to avoid as an EM are going to help you feel more confident in these discussions, because if you are serious about getting the best possible offer, I really do highly suggest that you don't go into the salary negotiation alone. Feel free to head over to the salarynegotiator. com (https://www. 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-templates). You're going to find the links in the episode notes below. That way you have exactly what you need to negotiate better pay. And if you found this episode helpful, go ahead and subscribe, leave a comment and share it with someone that could use this advice in their engineering career. Thanks for tuning in and happy negotiating. Good luck out there. https://www. thesalarynegotiator. com/meta-engineering-manager-salary https://www. thesalarynegotiator. com/google-engineering-manager-salary

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