A lot of CMOs do a fantastic job of marketing themselves into a great position and then stumble when it comes to negotiating their compensation package. Worse yet some are not even aware of the perks on which they are missing out.
I became aware of this gap when a CMO traveling companion happened to be in the last row of a plane on my trip to the CMO Club summit. I was surprised and asked her if she knew that most executives have company sponsored airline programs for their executives. She had not even heard of the program, did some checking, and was shocked to find that everyone of the CEO’s direct reports except her had the Global Services United Airline perk. I’ve noticed upon further inspection there seems to be a secret code when it comes what can actually even be considered in an executive package. Let it be secret no longer. It falls on the executive to push for each items inclusion and knowledge is your friend.
Before I get to a checklist, let me first make a few points worth noting. You should always negotiate. Always. At the executive level negotiation is in fact expected. Never feel like you are in a take it or leave it situation. It’s not just about salary and benefits. In fact, it is usually the other parts of the package that truly make the difference in the long run.
Below is a quick but important checklist of the items that can be in your executive compensation package. I recommend (1) that you are aware of what each of the terms means before you have a compensation discussion and (2) identify which items are near and dear to what is meaningful to you versus items that you can potentially leverage as negotiation points.
√ Salary (check out public company listings to see what your peers are making)
√ Performance bonus (short-term and long-term)
√ Retention Bonus
√ Starting bonus
√ Equity compensation (phantom stock, private equity)
√ Stock options and stock grants (inquire about them both and vesting schedules are negotiable)
√ Supplemental executive retirement plans
√ Supplemental 401(k) (these are special executive suite only provisions)
√ Golden parachutes (negotiable change in control provisions are negotiable)
√ Severance package (walk away pay guaranteed in all scenarios)
√ Benefits (special executive healthcare, daycare, long-term leave add-ons, life insurance)
√ Secret executive luxury perks (travel clubs, airport services, limos services, car allowance, travel and entertainment budgets)
√ Tax deferral or reporting allowances (i.e., gross ups for relocation expenses)
Be familiar with each of these and know upfront what you care about. Feel secure in that most executives have this discussion and don’t feel timid about your ask. Again its never a take it or leave it situation — they want you. Not every one of these items will be on your checklist but its important to be aware and inquire into them. I have found in general CMOs are not primed in their negotiations and a lot are losing out of things they should be entitled to simply because they didn’t know to even ask.
Finally, while you will want to handle the compensation negotiation upfront, I think an employment lawyer is always a must even if it is simply to check the final contract. I am always happy to help advise any CMO club members on negotiating their packages and can also recommend some good lawyers who can do actual package reviews.