Career Negotiations Podcast

Director Salary Negotiation - How to Negotiate a Director Salary

• Brandon Bramley

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

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

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WHO AM I

I'm Brandon, the Founder and Lead Negotiator at The Salary Negotiator®. As a former corporate negotiator, I now help employees increase their compensation. Through hundreds of salary negotiations, I've helped career professionals secure over $200 million in additional compensation. My expertise is backed by more than 150 five-star reviews from career professionals on Google and Trustpilot.

Brandon:

Directors typically receive competitive compensation at perks, but how do you know if your job offers competitive before you accept it? Right? In this episode, my goal is to cover everything you need to confidently navigate a director level salary negotiation. I'm first going to cover the compensation package and structure for most director level roles so you know more about director's base salary, bonus, equity package, and sign-up bonuses that you might found in your package. That way you're gonna know exactly what to expect before you get an offer. I'm then gonna walk you through my five recommended steps for negotiating a director level job offer that are proven through real director's salary negotiations that I've led for my clients. That way you can filter out the bad advice out there and use salary negotiation strategies that are actually gonna work in these discussions. And I'm gonna close out the episode by highlighting three common mistakes you should definitely avoid in a director's salary negotiation (https://www.thesalarynegotiator.com/resource-center/director-salary-negotiation). That way you don't risk the opportunity and you do actually secure competitive compensation. So let's go ahead and get right into it. 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 the salarynegotiator.com. I provide professional job work negotiation coaching, salary negotiation courses, and tools to help professionals like you navigate the negotiation process and secure competitive compensation. 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've actually personally led hundreds of salary negotiations across various roles, helping my clients secure hundreds of millions more in compensation. My background is in strategic negotiations and my goal is to debunk the bad advice out there and give you proven negotiation strategies that are actually gonna work and 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 thesalarynegotier.com for coaching (https://www.thesalarynegotiator.com/) courses (https://www.thesalarynegotiator.com/courses) and tools (https://www.thesalarynegotiator.com/salary-negotiation-templates) that are designed to help you negotiate the best possible offer. Okay, so before we dive into how to negotiate a director's salary, let's talk about the compensation components because it's really important to understand the difference between base salary and total compensation when you get to the director level. Too many directors focus on only the base salary for the role, but that's just one piece of the puzzle when it comes to the pay at the director level. When considering a new company, you should look at the whole picture, which is your total monetary take-home pay, also known as your total compensation. This is gonna include, as a director, your base salary, any bonuses, the value of your investing equity each year, and any sign-on bonuses right from the start. Now you might find four compensation components in a director's offer package, and I'm gonna talk through all of them right now. Starting with the first one, which is your director's base salary. This is your consistent guaranteed pay that you'll see in every paycheck, and it's really only gonna change with a promotion or merit increases since it's a set rate. This shouldn't be new since you should have received a salary or a base salary throughout your entire career. So I don't want to spend that much time there. But second, you're gonna have some type of annual, quarterly, or other performance bonus as a director, which is usually a percentage of your base salary, and the range is depending on the director level of the role, can be anywhere as low as 10%, but upwards of 50% or more. So it's really gonna depend on the company, but it's usually gonna be either personal or company performance based, and it's gonna be paid out either monthly, which isn't very common, quarterly, which is sometimes, and usually annually. Okay. Um and the one thing I want to call out about it is the bonus is not gonna be negotiable, but the cool thing is it's tied to your base salary. So if you do negotiate a higher base salary in the negotiation, your bonus should go up as well. So keep that in mind for this component. Third, now that you're higher up in the company, you're also hopefully gonna receive an equity incentive as a director. This is huge, but to learn more about it is it usually comes in the form of either restricted stock units, which are called RSUs at most companies, or employee stock options. RSUs are gonna represent actual stock, which means you're gonna receive shares of the company stock outright once at best. Stock options, on the other hand, are gonna give you the right to purchase company stock at a predetermined price. For example, you have to pay or exercise these options to receive the actual shares. So keep those in mind. Director equity grants, though, are gonna come with what's called a stock vesting schedule, which means you'll need to wait for the equity to vest according to that schedule before you actually own those shares or options. Most stock vesting periods that you're gonna see are gonna be three to four years with the equity vesting increments over that time. It is either gonna be an evenly distributed or a staggered vesting schedule. So, for example, if you take a look at Meta's RSU vesting schedule for directors, it's a four-year period with equal annual vesting. So that's 25 best each year or 25% best each year. However, you'll find a staggered approach for, say, a director at Amazon on their RSU vesting schedule, where 5% best at the end of year one, 15% best at the end of year two, 40% at the end of year three, and the remaining 40% in year four. So companies are gonna have their own specific vesting schedules for directors. So keep that in mind and make sure you understand it. And one big thing to note about equity is you don't get that value up front with that vesting schedule. But the cool thing is you are gonna share in the value fluctuations over that period, which is why it's so big, right? So if your company is crushing it and that stock price continues to go up, so is your total compensation and your equity as a director. The only bad thing is if that stock price drops and the company is not doing well, your equity value and your total compensation goes down as well. So there are a lot of risks with equity. And one of the big important things to note is if you decide to leave the company before any of your equity invest, you are gonna forfeit portion of unvested equity at the direct level. So keep that in mind when you're evaluating future job transitions. Finally, the last component you should all get as a director is a sign-on bonus at a new company. Okay, this is a one-time cash payment that's typically paid out with your first paycheck or 30 days after you start. And it's usually designed to offset any loss incentives or equity from your previous company or just as an incentive to join the new company. Okay, so directors' sign-on bonuses aren't always gonna include it in the initial offer, so they are usually gonna require negotiation, so don't be surprised by that. But instead, I've been very successful in securing it for the directors I work with. So if you go through the proper strategies and you're effective in these discussions, you should receive one in your offer package and the company is expecting you to ask for one. Okay, and one of the last perks that I'll call out for compensation is gonna be that a lot of companies are gonna that offer equity to directors might also provide an annual equity refresh, which is additional equity grants each year you work for them. However, stock refreshes are not always guaranteed with most companies and they can vary significantly. So I don't personally include them in our total compensation calculation, but it is worth asking the recruiter when you go through these discussions if they do offer stock refreshes, how you get additional equity and how much those might be and how they work. That way you're aware of this future compensation component to see how your comp's gonna grow at that company over the years. Now, the four main director salary components, your base salary, any bonuses, equity, and a sign-on bonus are gonna make up your total compensation as a director. To help you visualize this, we have a total compensation calculator on our site (https://www.thesalarynegotiator.com/total-compensation-calculator). It lets you input your base salary, your bonus percentage, your equity grant, and your sign up bonus. Then it's gonna show your estimated compensation over the vesting period, both in total and on an annual basis. You can find our free total compensation calculator at thesalarynegotior.com. And I'm also gonna link to it in the episode notes so that you can access this free tool and understand how much you're making with your new package. All right, now that we've covered how director's compensation structure works, let's discuss this director's salary negotiation steps. At a higher level role, like a director, companies are gonna expect you to negotiate. Okay, so sitting back, just accepting the offer as is, is really not the best strategy because there's more money on the table, there's better benefits, and there's the opportunity online. So it's very important to make sure that you secure the best package possible by negotiating strategically. And the company's also gonna expect you to negotiate. So I don't want you to sit back on this one, okay? Now these are salary negotiation strategies that I've actually used to successfully negotiate many director level job offers. And I'm gonna recommend that you all follow them to navigate your director level salary negotiation once you actually have an offer in hand and not during the interview process. Okay, wait till you have an offer. Now, once you do have a director level job offer, the first step to negotiating is to make sure you fully understand the comp components and benefits in the offer package. The biggest takeaway from this is that understanding the director level total compensation before negotiating is super important. That way you know exactly how to value the offer and what to negotiate with looking at the main components, right? Your base salary, your annual bonus, your equity, and your sign-on bonus. The second step is what I call doing your due diligence and asking strategic questions. This is honestly where you're gonna stand out to the recruiting team and it's actually where you're gonna review the director level offer package and come back with a list of questions for the recruiting team. It not only helps you clarify any questions you might have about the offer benefits, but it allows you to strategically ask questions that are gonna build negotiation leverage in the future. Okay, so you can call out things that might not be as competitive as your current comp package or current company or something that you might see on the market, right? And if you need some ideas, feel free to go ahead and grab my list of strategic questions on my templates page or go through my course (https://www.thesalarynegotiator.com/job-offer-negotiation-course) to actually learn a little bit more and get those questions there. Because I don't want you to skip the step. Even if you think you know you're a director, you know everything, you understand the offer. It's very important in building negotiation leverage by showing you're doing the research and your due diligence before you send a director counter offer. It's also gonna let you secure any freebies or items you didn't even know were on the table. So you're gonna find a whole host of additional negotiable perks as you climb the ladder. So you don't want to miss out on those and what might be on the table just because you asked for a bunch of things that you didn't think were there to find out that they would have given you anyways just by asking some street cheek questions. So don't skip it. And the third step is to do your director level compensation research, right? I want you to find the base salary and the total compensation ranges for your specific role, location, and level at the new company. And you can use various online resources to find this data. But make sure you're using multiple resources and you're averaging across those results because what we're trying to find is we're trying to identify the compensation ranges so we can see exactly where your initial direct offer sits on that range and how much more room there is for improvement depending on how competitive it is out the gate. Because most companies are gonna try to hire directors in at the lower to mid end of the pay bands because they do expect negotiation, but I'm always gonna suggest that you push to the top end of that pay range so you're paid the same as anyone else in that role. But I do want to caveat that most of the data you're gonna be pulling is publicly reported data and it's not always gonna be as accurate. So directors report higher equity than a new hire might get due to stock appreciation, or they may not have uploaded the comp correctly. So if you want help with this, I highly suggest that you grab my compensation research comparison tool on my templates page, or you go through my course so I can actually show you in a lot more detail of exactly how to do your compensation research and prepare you for the director counteroffer. Once you have the director compensation research done and you've gotten the answers to your questions, now you're ready to discuss and draft a director counteroffer. Okay, this is where you're gonna take a database approach and craft a counteroffer to send to the recruiting team. We're gonna present the top end of the range you're targeting based off your research and call it any items that weren't competitive on your due diligence questions. I'm gonna, even though you're a director and you think you should be having these conversations and you built a great relationship with a recruiter, I still highly suggest doing this by email because it's gonna give the recruiter everything they need to advocate for you and can simply send your points to the comp team. Instead of hoping that on your call, they're gonna note down your concerns and your comments and take it back, because instead that recruiter is trained and they know you're gonna negotiate. So when you try to give your pitch, they're gonna cut you off on the phone, they're gonna steer you in a different direction, and their goal is to deter you from negotiating and getting you to accept the offer as is. Okay, so you wanna avoid that. But it also leads into my final step is after you send a director's counteroffer, you need to be prepared to handle a recruiter and the hiring team's pushback or objections because they know you're gonna negotiate, so it's guaranteed you're gonna get pushback from the recruiter, and their recruiters are trained to deter you from negotiating. Okay, so be prepared for that pushback and know what to say to overcome those objections and get them to take your concerns back to the comp team in a friendly and professional manner. Because essentially you're gonna wanna say that you understand their concerns, but nicely reiterate yours and ask them to take back your concerns to the comp team for one last look. It's honestly gonna probably take overcoming a few objections or no's. But once they do agree to take it back for another look, nine times out of ten, they're gonna come back with a better package. That way you can hopefully sit pretty and accept the role. Um but if you need a list or you want my scripts on exactly how to handle objection handling responses, feel free to grab them on our templates page or check out my course where I go into a lot more detail so you know exactly what to say when you encounter this pushback throughout your negotiation. But from here, as long as you ace those steps correctly, they're either going to come back with a better offer that meets your needs or it'll be slightly lower than your ass. And at either point, you can either be ready to accept the director level comp or you can go ahead and send one last director counter offer to push one last time. But I know you're all directors, you all are great at negotiating, maybe business-to-business deals, but this is not like how you negotiate in a boardroom. This is not how you negotiate a car dealership, okay? These are not aggressive negotiations and there really isn't much back and forth. So you really don't want to send more than two salary counters, otherwise, you're gonna risk coming off as aggressive and jeopardizing the relationship. So always keep that in mind when you navigate these discussions. Now, the last thing I want to cover is a few director salary negotiation mistakes before you decide to negotiate your offer package. Okay, because the main item I'm gonna recommend against, and a lot of people make mistakes, is sharing your salary expectations or your current pay with the recruiting team. Okay, this is only gonna work against you, and this is not negotiating. Because if you think about it, right, if you throw out a number that's lower than what they could offer, or if your current comp that you share is lower than what they could offer, you're likely gonna get a less than competitive compensation package to flow in, and it's a lot harder to negotiate up from that position. Okay, and as a director, a lot of you are looking at higher levels, you could even get down leveled to a different team from senior to um regular director. So don't make that mistake by saying you'll accept less comp. On the flip side, right, thinking this is gonna be a big step up in your career, you might think it's a good idea to throw out a big number, but we don't want them to say, shoot, I'm not sure if I can afford this director, so let's go with a different candidate instead. So it's not a good strategy and keep the negotiations till after you get the offer package and you have a chance to review it holistically. And remember, because the recruiting team knows exactly what they can pay for this role, so you're always gonna want to turn that question back on them and learn more rather than giving out these random ranges that you think might sound good. Okay. The second mistake to avoid is making sure that you're realistic what they should pay for your role. Okay, you don't want to put in your director counteroffer a salary or a comp package that just doesn't make sense and is much higher than they would ever approve. Okay, you're either gonna get laughed at, you're not gonna think you're um professional, or they might come off as aggressive and you could even get the offer ascended. So instead, I want you to take a database approach as a director and look at realistic compensation that they might actually be able to provide. Because at the end of the day, it doesn't matter your level role, they're only gonna pay within the pay bans that they're approved for on a base salary and a total curve basis. So don't jeopardize your director level role by coming off as too aggressive and asking for unrealistic numbers. Never a good strategy. And finally, don't be worried about a director's salary negotiation. Okay, you might feel nervous, but they are expecting this. And at your level, as long as you're following proven strategies and keep the negotiation professional, there's no reason you'd risk the director offer. Instead, if you do it right, you're gonna secure a much better package and you're gonna be a lot happier throughout your career with that new company knowing that you're making competitive pay. So don't skip it. That wraps up this episode on director salary negotiation. I hope this breakdown of a director's compensation structure, our proven director's salary negotiation strategies, and negotiation mistakes to avoid in your negotiation are gonna help you feel much more confident in these discussions. If you are serious though about having the best possible offer as a director, I highly suggest you don't go into the salary negotiation alone. Head over to thesalarynegotiator.com to either connect with me and work with me directly as your salary negotiation coach, or check out my salary negotiation course and tools. You're gonna find all the links in the episode notes below, and they're all designed to help you negotiate better pay. And if you found this episode helpful, make sure you subscribe, leave a comment, and share with someone who can use this advice in their career. So I really appreciate you tuning in and good luck negotiating that next package.

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Brandon Bramley

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