Negotiating a CMO job offer is quite challenging. Little has been written and so it is usually through word of mouth or trial and error that CMOs figure it out. To demystify the process, I consulted with an expert in the field…
Negotiating a CMO job offer is quite challenging. Little has been written and so it is usually through word of mouth or trial and error that CMOs figure it out. To demystify the process, I consulted with an expert in the field, Richard Sanderson, leader of the Marketing Officers executive search practice at Russell Reynolds Associates. Below, he shares the common mistakes CMOs make when negotiating job offers and how not make them.
Kimberly Whitler: Across your career, you’ve been involved with placing dozens of CMOs and hundreds of marketers. Through this experience, what are the biggest mistakes you see CMOs make during negotiations?
1. Not understanding when to bring up the compensation conversation with either the recruiter or the client. This is a really delicate topic. Too early, and the candidate is perceived as overly focused on compensation rather than the opportunity itself. Too late, and there is a risk of missing each other’s expectations and wasting time. Typically, a skilled recruiter will address this very early in a search, often touching on the subject in the preliminary conversation.
The fix: When a candidate is asked about their compensation expectations, that is also an appropriate moment to ask about the company’s compensation range or parameters for the role.
2. Not knowing about the new compensation laws. With compensation laws now changing in some cities and states, candidates are arguably in a stronger negotiating position as recruiters and clients cannot ask about compensation history.
The fix: First, do a quick search to find out what the laws are in your city or state. Oregon, New York City, Delaware and California have enacted compensation history laws and Massachusetts will join them in July 2018. Importantly, the law applies to the location of the role, not the location of the company HQ or the residence of a candidate. Consequently, recruiters are now trained to structure the conversation around expectations. The risk is that bringing material compensation information late into a conversation can cause a lot of tension. This typically centers around the disclosure of equity information, strike prices and vesting dates. Non-compete and non-solicitation agreements should also be disclosed as soon as possible. Quite simply, the more information that can be shared at the earliest moment is the best approach. Candidates can still of course volunteer their compensation history. I’m finding that when I ask the expectation question, 90% of the time the candidate will revert to sharing their compensation history anyway.
3. Providing too low or high of a compensation expectation. With the new laws taking place, candidates should be prepared to discuss compensation expectations early on in a search process. However, this conversation is also fraught with risk. Candidates are now effectively making the first bid and setting the anchor for the negotiation. If the candidate expresses an aspirational compensation range that is out of line with the role, then they may inadvertently price themselves out of an opportunity or communicate that they aren’t prepared for the opportunity. As these new laws roll out, we will see a new dynamic in compensation conversations. Candidates must be very thoughtful in expressing their expectations.
The fix: Do your due diligence and understand what your market value is. If you have relationships with recruiters, you can use them as a sounding board. If you have relationships with other CMOs in similar positions within a similar industry, they can provide some perspective. Also, some CMO compensation is listed in proxy statements (when the CMO is one of the top paid individuals). Finally, you can see what the top people at the hiring firm are being paid by looking in the proxy (if a public firm). While the CMO might not be included, you will get a sense of what the CFO and other key C-suite players are making. Doing a little research can be quite helpful.
4. Being difficult in the negotiation process. Some candidates can become inflexible during negotiations. This can send the wrong signal to both the recruiter and to the hiring companies. I have seen a number of instances where a client almost entirely withdrew an offer when a candidate’s attorney was pushing too hard.
The fix: At one level, you have to trust your recruiter. They have a sense of the market value and are trying to create a win-win. For very senior CMO searches, the candidate may choose to work with a labor attorney to negotiate their compensation terms and aspects of their employment agreement. While expensive, this can often pay off although it can send mixed signals to a client. In particular, knowing how far to push a client on compensation or other terms and conditions is an extremely delicate and sensitive issue. Lawyers often don’t have this sensitivity and so you want to be careful when working with a lawyer.
5. Not negotiating the more flexible aspects of the job offer. Many CMOs think about base pay first and forget that there are other negotiable aspects: 1) severance, 2) bonus, 3) long-term compensation, 4) moving expenses, 5) up front bonus, 6) travel allowances, 7) starting date, 8) work location, etc. I’ve even had individuals negotiate the cost of restabling their horses.
The fix: In general, my advice to candidates is to negotiate as much as possible – including severance if a company will offer it – before accepting a role. You are in your strongest negotiating position before you formally join a company. Make sure that you ask but have a sense of what the company is most likely to be flexible on and be willing to give up on areas where there isn’t flexibility.
Join the Discussion: @KimWhitler
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