Ask HN: Salary negotiation?

[Dimidium-07]

Co-founder of a SaaS startup that is currently being acquired. How should I negotiate my future salary as an employee? Any tips or best practices?

[recursivenature]

First start with what you want, because there are multiple variables at play in an acquisition:

- Cash Comp - What you are actually paid every 2/4 weeks.

- Sign On Bonus / Retention Bonus - Paid lump sum (or over time) for joining the acquirer.

- Benefits - 401K / HSA / Health / Medical / Dental, individual or dependents.

- Equity - Assuming your equity will be bought out (cash) or rolled into new equity or both.

- Equity Vesting Schedule (AKA Golden Handcuffs) - On what terms does it vest? What are the strike prices for options?

- Non-Compete - May be part of the acquisition for a period of time.

- Termination - Golden parachute or termination without cause and you lose your equity?

Next, figure out what they can give you on each of these compensation areas. This is the negotiation part.

- Maybe they are in a cash crunch and they can give you really generous stock grants?

- Maybe they are out of options in the pool and need to refresh it, so they'd rather give you cash.

Objective of negotiating is finding a solution that works for both parties. You will have a much better time if you focus on what works for them, and toy around with your preferences.

Every negotiation that starts with "Take them for all they are worth" sets the wrong tone.

[Dimidium-07]

Some very good point! Thanks a lot. We already covered a lot of these points but some need to be addressed. I hope we will discuss the base salary with decision makers and not only HR who is not that much involved in the whole acquisition process.

[mytailorisrich]

I have no experience of your situation but I think you should perhaps start by negotiating your level and title as an employee as part of the acquisition. I suppose that what's achievable is correlated to the size of your startup.

Whether you join as, say, Director or VP will have a direct consequential impact on your salary (you'll automatically fall within different compensation bands) but also on your standing within the company.

[Dimidium-07]

Thanks for the advice! Very helpful. Do you have any general tips for negotiating a salary?

[derekja]

If it is a large company they have pay bands that limit their flexibility. I would start by negotiating level and research those pay bands. Might be easier to negotiate a one time payment or something that a deviation from their pay structure.

[Dimidium-07]

It is indeed a big company. Definitely a good point, but they should have a little scope. I should start with the pay bands and find some good arguments why I want to move up in the payroll.

[refurb]

This.

And gather some intel while you can. Get a sense of where you might land in terms of position, pay bands, etc.

Then argue for level first (it tends to be less contentious than money) and if they agree, you've locked in a pay band.

[mattcdrake]

This post helped me (and many others here, I'm sure) learn about salary negotiation: https://www.kalzumeus.com/2012/01/23/salary-negotiation/

[Dimidium-07]

Appreciate it! Thanks.

[utahcon]

Ask for double what you want, to start.

[viraptor]

You'll have a good chance of getting "we can't pay that, sorry, see you" back. Then if you actually want that job you'll have to walk it back and negotiate down. Not always possible, so it may not be the greatest idea to start at x2.

[Dimidium-07]

I don't want to be cheeky with them, but at the same time I expect something more than industry standard. The problem is that I have never worked as an employee before and salary negotiations are new territory for me.

[blamestross]

Negotiations boil down to "are you actually willing to walk away if you don't get X". Power goes to the most willing to walk.

[Dimidium-07]

But leaving would mean that the entire deal would fall through, which is no longer an option.

[mdcds]

don't bluff if your hand is complete crap

[closeparen]

Base salary is in general less negotiable than stocks.