This is the third in a series of four letters.
In order to evaluate David's job offer correctly, CareerLab conducted an executive compensation study which told us what comparable salaries, bonuses, benefits, and relocation packages were being offered by similar size companies, in similar industries, in the same geographic area. Our analysis revealed that the offer was somewhat low. In addition, there was no severance in the package—a negative, since the job was risky. Equity opportunities were not spelled out clearly, nor was the relocation package. And David had not seen a copy of the non-compete agreement.
We told him we thought we could negotiate this offer—in other words, get more. One of the things one can determine by negotiating is how the other side responds when pushed. Do they clam up? Get hostile? Become aggressive? Withdraw and pout? Or do they come back in a business-like way trying to reach agreement.
What is their style? If it's hostile and beligerent, look out. Working for them might not be such a breeze. The honeymoon might end quickly. As one of our clients, Ed Tauer said, "They never treat you better than when they're trying to hire you."
Since David had another potential job offer developing in the background—albeit somewhat slowly—he decided to counter by asking for everything he wanted. The football reference at the end of the letter derives from the fact that the Super Bowl was only a week away—and "going to the Super Bowl" implies making it big.
I generally recommend accepting a job offer first, and then negotiating key points second, not the other way around. "I'm accepting the offer, and looking forward to getting started, but I have some concerns about the relocation," is far different that, "I need $65,000 for relocation or I won't accept your offer."
DAVID R. WILLFORD
2200 N. Forsythe Rd. | Los Angeles, CA 89900
H: 213-575-8245 | C: 213-744-2158 | willford@aol.com
January 13, 20––
Ronald Lando
President/CEO ABC Manufacturing, Inc.
1298 Pine Hills Road Orlando, FL 22781
Dear Mr. Lando:
I am very excited about the offer you extended on January 13, 20––, and look forward to accepting it. I feel very confident I will make a very significant contribution to the growth and profitability of ABC Manufacturing over the short and long term. The terms you have described are acceptable, with a few minor changes.
First of all, your offer mentions a confidentiality and non-compete agreement. I would like to see a copy of the actual agreement. In consideration for signing the agreement, I propose a one year severance package to be implemented if my employment is terminated for any reason other than cause. The reason for the severance is twofold: (1) as compensation for signing the non-compete, and (2) because of the inherently risky nature of the job.
In performing due diligence on this offer, I talked with a compensation consultant about comparable salaries in similar businesses in Orlando. Companies the size of ABC Manufacturing typically pay $115K base, plus $30K bonus, plus $30K potential bonus. Based on this, I'd like you to consider a $100K base salary. The bonus you have extended, while not a guarantee, is still workable-and I believe we can reach ambitious goals. If you have questions about the market study, I'll be glad to have you talk to Michele Tabor, the compensation expert.
As far as relocation is concerned, the $1000 per month for up to six months works fine. We agreed that if I move my family to Florida, ABC Manufacturing will pay 50% of my relocation costs, including real estate commissions and closing costs, and I will pay the other 50%.
During my interviews we discussed stock or other equity participation in the company, and with your agreement—assuming the results are there—I would like to put a stock plan in place that is acceptable to everyone over the course of the next year.
Mr. Ronald Lando
January 15, 20––
Page Two
In exchange for these concessions, I'm prepared to deliver results quickly:
First of all, I would depend heavily upon the Board of Directors and utilize their wisdom and experience.
In the aftermath of the loss of your Director of Marketing—and the potential loss of a major customer—I would immediately establish a personal relationship with each key customer and supplier of raw materials, and develop a profile to understand customers' and suppliers' current and future needs.
Working with the Plant Manager and his team, I would establish key metrics for volume, efficiency, delivery, and employee turnover. It wouldn't be unrealistic to expect a 20% improvement in productivity.
This would lead to a long-term vision, mission, and business plan for a highly profitable, fast-growing business.
In other words, I'd quickly achieve the results we've discussed, and free up Devon Stephens to pursue his other business ventures. I'm excited about the results we can achieve together. Let's go to the Super Bowl with ABC Manufacturing.
Sincerely yours,
David R. Willford
David put this on the fax and held his breath. Was it too aggressive? Even though he was working on a second opportunity, it was developing slowly. He didn't want to lose this offer
. Walk this way to see what ABC Manufacturing came back with.