Career Negotiations Podcast

Vice President Salary Negotiation - How to Negotiate Vice President Salary

• Brandon Bramley

Share episode

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

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

SALARY NEGOTIATION TOOLS MENTIONED

VP SALARY NEGOTIATION RESOURCES

Like and subscribe!

CONNECT WITH ME

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:

Those at the vice president level typically receive competitive comp packages and perks, but how do you know if your VP level job offer is competitive before accepting? In this episode, my goal is to cover everything you're gonna need to confidently navigate a VP's salary negotiation (https://www.thesalarynegotiator.com/resource-center/vice-president-salary-negotiation). I'm first gonna cover the compensation package structure for most VP level roles so you know more about VP's base salary, bonus, equity package, and sign-up bonuses. That way you're gonna know exactly what to expect when you get an offer. Then I'm gonna walk through my five recommended steps for negotiating a vice president's job offer that are proven through real vice president salary negotiations that I've led for my clients. That way you can filter out some of the bad advice out there and use salary negotiation strategies that are actually gonna work and make you look good. And finally, I'm gonna close out the episode by highlighting three common mistakes that you should definitely avoid in a VP's salary negotiation. That way you don't risk the opportunity to actually secure a competitive comp. So let's 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 thesalarynegotiator.com (https://www.thesalarynegotiator.com/). I provide professional job offer negotiation coaching, salary negotiation courses (https://www.thesalarynegotiator.com/job-offer-negotiation-course), and tools to help professionals like you navigate the negotiation process and secure a competitive comp. I'm not just a career coach or recruiter giving out generic salary negotiation advice. Trust me, there's enough bad advice floating around online already. Instead, I've actually led hundreds of salary negotiations across various roles, helping my clients secure hundreds of millions more in compensation. And my background is actually in strategic negotiations. So my goal is to debunk some of the bad advice out there and give you proven 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 for actionable tips. And when you're ready to take your negotiations to the next level, visit the salarynegotiator.com for coaching courses, tools that are designed to help you negotiate the best package possible. Now, before we dive into how to negotiate a vice president's salary, let's talk through the compensation components first. Because it's really important to understand the difference between your base salary and your total comp at the VP level. Because way too many VPs that I met with focus only on their guaranteed pay or the base pay for a role, but that's really one piece of the puzzle when it comes to pay at the vice president level. Okay, so when considering a new company, you need to look at the whole picture, which is your total monetary take-home pay, also known as your total compensation. This includes your base salary, bonuses, the value of your vesting equity each year, and any sign-on bonuses from the get-go. Now, you're typically going to find these four core compensation components in a VP's offer package. So first, there's gonna be your vice president base salary. This is your consistent guaranteed pay that you'll see in every paycheck. It's really only gonna change if you get promoted or if you see a merit increase throughout your tour. Okay, this shouldn't be new since you should have all received this in every role during your career. So I don't want to waste our time there. But second, you might have some type of performance bonus as a VP, which is usually a percentage of your base salary. And this range is really gonna depend on your vice president level as well as the company, because it's gonna be based on personal or company perform permits, and it's gonna be paid out either annually, quarterly, or even monthly sometimes. But since it's a percentage and a target, usually it can fluctuate. So while it might be tied to your base salary, it's not usually negotiable unless it's a small company. But the cool thing is if you negotiate a higher base salary, this bonus is usually gonna increase along with it. So keep that in mind. Third, now that you're higher up in the company and you're at the VP level, you're hopefully gonna receive an equity incentive as a VP if you don't get one currently. It's usually kind of come in the form of either restricted stock units or employee stock options. RCUs represent actual stock, which means you receive shares of the company stock outright once vested. Stock options, on the other hand, give you the right to purchase company stock at a predetermined price in the future. So you have to pay or exercise these options to actually receive those actual shares. VP equity grants are typically gonna come with a stock vesting schedule, which means you'll need to actually wait for the equity to vest according to that schedule before you actually own the shares or the options. Most stock vesting periods that you're gonna see is gonna be three to four years with the equity vesting and increments over that time. The stock vesting schedule may be evenly distributed or staggered throughout that period. So, for example, and what I see it with VPs, say at Microsoft's, their RSU vesting schedule is a four-year period where they're gonna best 25% vesting annually. Okay. However, you'll find a staggered approach for Google RSU vesting schedule at the VP level, where 38% vest at the end of year one, 32% at the end of year two, 20% at the end of year three, and the remaining 10% in year four. So all companies are gonna have their own specific vesting schedule for VPs. You don't get the full value of equity up front, so keep that in mind. But the cool thing is you're always gonna share in the value fluctuations over that period. So if you're crushing it and the stock price keeps going up at your company, so does your total compensation and your equity as a vice president. However, the flip side is if your stock price drops, the company's not doing well, so does your equity value and total compensation as well. So there are definitely a risk and it's gonna be a higher portion of your salary at the VP level. Um and the last thing is it's important to note that if you do leave before the equity fully vs. You're unfortunately gonna forfeit that unvested portion of your VP equity when you depart the company. So keep that in mind for future transitions. Finally, there are sign-on bonuses for VPs, and you should all get one. Okay. This is a one-time cash payment, typically paid out 30 days after you start with a new company or with your first paycheck. And it's usually designed to offset any loss incentives or equity from your previous company, but also as an incentive to join. So even though you're not always going to see this in your initial offer, it's very important that you negotiate one because you should get one as a VP because you're taking on a higher level role and a lot of risk. And I've had a ton of success negotiating large ones for the VPs I work with, so keep that in mind. Um, and the final item I'll call out in relation to VPs is you might go ahead and see at some companies annual equity refreshers. Okay, these are really cool, and they're additional equity grants that you'll usually get each year, and they'll have their own vesting schedule with them. However, at most companies, these stock refreshers aren't always guaranteed and they can vary significantly. So I don't typically include them in the total compensation calculations, but it is worth asking your recruiter about any stock refreshes. That way you know the amount of these if they have them, so you can start to understand what your future compensation might look like at that company. Now, these four main VP salary components, okay? Your base salary, your bonuses, your equity, and your sign-on bonuses make up your total compensation at the VP level. To help you visualize this, we have a total compensation calculator (https://www.thesalarynegotiator.com/total-compensation-calculator) on our site. It'll let you input your base salary, your bonus percentage, your equity grant, and your sign-on bonus, then shows your estimated compensation over the vesting period, both in total and on an annual basis. You can find our free total compensation calculator at thesalarynegotiator.com, and I'll also link to it in the episode notes so you can utilize this freeze tool when you're evaluating your offer package. All right, now that we've covered how vice president compensation structures typically work, let's discuss the VP salary negotiation. At a higher level role, like a VP, companies do expect you to negotiate because there's more money on the table, there's more benefits, and it's a larger opportunity. So it's very important to secure the best package possible, negotiating strategically right from the get-go, but also be professional in these discussions since they're expecting it and it is part of the interview process. All right. So these salary negotiation strategies that I'm sharing with you are the ones that I've successfully used to negotiate many vice president offers, and I'm all gonna recommend you to follow them when you navigate these VP salary negotiations once you actually have an offer in hand. Now, once you have a VP job offer, the first step to negotiating this package is to make sure you fully understand the comp components and benefits in your package. The biggest takeaway from this is understanding the VP total compensation before negotiating is important. That way you know exactly how to value the vice president offer and what to negotiate, including your base salary, your annual bonus, equity, and the sign-up bonus. The second step, which I cannot share how important this is, is what I call doing your due diligence and asking strategic questions. This is where you're actually going to review the VP offer package and come back with a list of questions for the recruiting team. This not only helps clarify any questions you might have about the offer, but it allows you to actually build negotiation leverage and pull out any freebies as well as other items that might already be on the table just by asking questions. You can call out items that are not as competitive as your current company or what you may have heard competitors have. And if you need any ideas, you can go ahead and grab the list of my strategic questions on my templates page or my course. But don't skip this step, right? It's very easy to fall in line and say, hey, I'm a VP, I know everything, and just go for it. But instead, at the VP level, there's a lot of extra items on the table that they might not have include everything from car stipends to travel perks to stuff like that. And without asking about them and pulling those items out, what's gonna happen is when you go into the counteroffer (https://www.thesalarynegotiator.com/store/counteroffer-examples) and ask for more money, they're gonna throw those freebies in and not give you as much money and use them as trader trade-offs later on. So be careful with that. The third step is to do your VP compensation research specifically to this role on a base salary basis and a total compensation basis. Okay, you can use a lot of online resources to find this data, but make sure you're using multiple, multiple, and you're averaging across those to get a realistic snap shot. Because what we're trying to do is find out where your initial offer package sits on those ranges and how much more we should ask for. Because most companies are gonna try to hire VPs at the lower to mid end of the payments because they do expect you to negotiate as well as you're making more. So they're trying to get an effective pay rate. So remember though that the data you're most likely using is publicly reported. So you want to make sure you're averaging that because VPs might be reporting higher equity online than what a new hire would get as well due to stock appreciation, or they may not have uploaded the compensation correctly and said miss the equity, the bonus, or items like that in there. So make sure you're using multiple resources. And if you need help comparing those and pulling them together, feel free to grab our compensation research comparison tool on our templates page, or go through my course where I actually dive into exactly how to do this for your package. So you know actually how to find the rate ranges before you actually accept an offer and go into negotiate. So once you have the VP compensation research done and you've gotten all the answers to your questions back, it's now time to go ahead and send over a VP counter offer, right? This is where we want to take that database approach and craft the counter offer to send to the recruiting team. We're gonna present the top end of the range that you're targeting based off your research on a base seller basis and a total compensation basis and call out some of the items that weren't competitive during your due diligence questions. I know you're a VP, you like having conversations, and you've probably built a great relationship with a recruiter, but I highly recommend you do this by email because it's gonna give your recruiter everything they need to advocate for you and simply can share your points with the comp team instead of hoping that they're gonna be on that call writing down all your notes. Because unfortunately, recruiters at this level negotiate offers every day and they're gonna be ready with tactics to cut you off and steer you in a completely different direction that you weren't expecting if you counter verbally. But once you actually do get a counteroffer out the door, whether you go ahead and send it via email or send it verbally, is the final step is to be prepared for recruiter pushback. I'm guaranteed that you're gonna get pushback from the recruiting team. They're gonna try to talk you down in your ass, get you to accept the offer as is, and deter you from negotiating it overall. So you need to be prepared to overcome that pushback in a kind of professional way to not jeopardize the relationship, but also get them to take it back for another look. So essentially to handle an objection, you want to let them know that you understand their constraints and their concerns, but nicely reiterate yours and ask them to take it back to the comp team for another look. It's probably gonna take overcoming a few objections with a recruiter because they do this all day. 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 VP offer package. So keep that in mind. And if you need help with this, because this is where most people fall short, feel free to grab our objection handling responses on my templates page or see how I do this in the course. So you have a full list of scripts (https://www.thesalarynegotiator.com/resource-center/salary-negotiation-script-strategies-for-job-offer-negotiations) of exactly what to say when you encounter recruiter pushback throughout your negotiation. From here, hopefully the recruiter is either gonna come back with a better offer that fits your needs or one that's lower than your ass. So at this point, you can go ahead and decide if it's worth a second VP counter offer to push again, or if you're ready to lock on the updated offer with an acceptance email. Just note that negotiating salary is not like what you VPs might do in the business-to-business negotiations or say at a car dealership. Okay, it's not aggressive, there's not much back and forth, and you really don't want to send more than two VP salary counters. Otherwise, you're gonna risk coming off as aggressive and possibly jeopardize the relationship by them thinking you're not the best person to work with. So keep that in mind. Now, the last thing I want to cover is a few VP salary negotiation mistakes before you decide to negotiate a VP offer letter. Okay, because with most roles, the main item I recommend against is sharing your salary expectations or your current pay with the recruiting team. It's only gonna work against you. Because if you think about it, right, if you throw out a number or your current comp that might be lower than what they're gonna offer, you're likely gonna get a less competitive compensation package at the low end of their pay range and they're not gonna move from that. Okay, so and you also run the risk if this is for a say a senior VP level role, they might actually downlevel you to just the VP level role if your comp request falls within that range. So it's a big no-no. And on the flip side, if you throw out a number that's too high thinking that's gonna help, we don't want them saying, shoot, I'm not sure if we can afford this person, let's go with a different candidate instead. And you don't even end up with the offer. So it's also not a good strategy. And you should also remember there's no company that doesn't know how much they can pay for a role. All right, they have this information, they know how much they can pay. The only reason they ask those items is to see how competitively they can get a hire at. So keep those items to yourself, but feel free to always turn that question back on them to understand what the base salary range is and what the total compensation range is for the position that they're recruiting for. The second mistake to avoid is making sure that you're being realistic about what you should ask for the VP counteroffer. Way too often do I see vice presidents ask for way too much that just doesn't make sense. You're either gonna get laughed at, it comes off as aggressive, or in some cases it could even get the offer rescinded if it's not realistic. Okay, so you want to avoid that and you should always take a data-based approach as a VP to ensure you're asking for realistic compensation that they're actually gonna be able to provide. Because at the end of the day, even though you're at a higher level, companies still have specific comp bans on a base salary basis and a total compensation basis. So they're only gonna pay within that level or those bans. So don't jeopardize your VP job offer by just coming off as aggressive and asking for unrealistic numbers. Keep it realistic. And finally, don't be worried about a vice president's salary negotiation. All right, I get it, you might feel nervous, you might be ready to accept, but at this level, you are expected to negotiate, you're at a higher level, and they are expecting it. Okay, there's no reason you'd risk the VP offer as long as you're following our strategies, keep in a kind of professional manner and using strategies that actually work. Because if you do it right, you are gonna receive a better VP offer package before you start the role, and this is gonna pay you dividends over the course of your career. I hope you captured everything because that does wrap up this episode on VP salary negotiation. So I really hope that this breakdown of vice president's comp structure, our proven VP salary negotiation strategies, and negotiation mistakes avoid helps you feel more confident in these discussions. So if you are serious about getting the best possible offer, I highly suggest you don't go into the salary negotiation alone. So go ahead and 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/courses) and tools (https://www.thesalarynegotiator.com/salary-negotiation-templates). You're gonna find all the links in the episode notes below, and they're all designed to help you earn more and navigate these discussions correctly. And if you found this episode helpful, make sure you subscribe, right? Leave a comment and share it with someone who could use this advice in this career. So good luck with your negotiating and keep me posted.

Head Shot

Brandon Bramley

Host