A higher starting salary can lead to thousands (or millions) more dollars over the course of a career. Meanwhile, salary negotiation is often approached without the intention and thought it deserves.

In this piece, we take a deep dive into the art of compensation negotiation. We’ve drawn on research and feedback from recruiters, hiring managers, and employees.

Keep in mind that you have the ability to negotiate for more than just your starting salary - equity, bonus, title, vacation, remote work, start date, and team assignment may also be negotiable.

COMPENSATION NEGOTIATION CONSISTS OF THREE STAGES:

Pre-Interview
During the Interview
Job Offer

STAGE ONE: PRE-INTERVIEW

The main goal for the pre-interview phase is gaining information and leverage.

Gaining Information

For obvious reasons, you want to be as prepared as possible when interviewing with any company. This applies to the actual role (culture, responsibilities, hours, expectations), but we will focus specifically on the portions related to compensation negotiation.

We suggest taking advantage of resources available to you such as:

People in your network that are employees or former employees.
Online forums or websites like Glassdoor, Angel List, Comparably, Levels.fyi or Blind.

Each company has its own quirks, and the more informed you are, the better. In your research you may discover that certain companies offer more salary and less stock, while other companies offer less salary and more stock. Some companies won’t budge on much, while other companies allow almost everything to be negotiable. This information allows your negotiations to be specific, which allows the company to feel like you will sign if they meet your demands.

In addition to company specific research, many states have begun passing pay-transparency laws where employers are required to disclose a salary range for roles. Though the language as to what a reasonable range in the posting is up for debate, it is worth it to check if there is a range listed, or to inquire with the recruiter.

How to Gain Leverage

To the best of your ability, try to line up coinciding interviews with other companies. The more companies bidding for your services, the better. You don’t fully control the timing, but you can try your best. Some companies may have longer hiring practices that either drag on or allow you to stretch it out. Other companies have quicker hiring processes. Generally, a startup will move faster than a massive corporation.

Simultaneously interviewing with multiple companies helps for 3 primary reasons:

1) You can speed up or slow down the process. If you have an offer in hand from Company A, then Company B is incentivized to accelerate the process. They like you, they have invested time and money into you, they don’t want to lose you simply due to timing. We’ve seen cost estimates of $20,000 to $30,000 to hire an engineer so they won’t want this to go down the drain.

2) You look more desirable. Having conversations with, or offers from, competitors or other companies confirms their belief that you’re a good candidate. And it motivates them to not lose you.

3) It is likely that the company's ‘first offer’ will be better than initially planned since there is less time for back and forth. If they know you’re interviewing at a comparable company and they really want you, they are going to need to come in with their best shot.

How to Lose Leverage

Speaking negatively about your current employer is one sure fire way to lose leverage, so be sure to avoid it.

In general, the most important tool in any negotiation is your willingness to walk away. Being desperate for a job offer is unlikely to result in you being in a strong negotiating position. If you have other offers in hand from companies that you’re willing to work for, then you’re in a much stronger position. The company is more likely to budge on stock compensation, salary, or a higher bonus during a negotiation if they know you can potentially walk away. Coinciding interviews is the best way to put you in a stronger position.

STAGE TWO: DURING THE INTERVIEW

Most of the interview portion of the recruiting process is about the actual role, but there are three main things you can do in relation to the negotiation during this period.

- Be Kind and Respectful

- Be Winnable

- Be Prepared for the Salary Expectations Question

Be Kind and Respectful: This one seems obvious, but evidently it isn't based on how much it popped up during our conversations with recruiters and managers. You want the recruiter/manager to go to bat for you, and fight for you. You are more likely to be supported by them if you are well liked. This does not mean you should be a “pushover.” During these somewhat serious interactions, being kind and respectful can go a long way.

In addition to the immediate benefit of being kind, keep the long term horizon in mind. The recruiter and hiring manager will likely be at a different company within 5 years trying to build another team. The better rapport and relationship that you build with them, the more likely you are to benefit from that relationship in the future.

Be Winnable: This will particularly make sense if you’ve ever tried to negotiate when buying a car. On a car lot, it is common to receive a response like this after you ask for a lower price: “If I can do that for you, will you buy the car today?” The sales team does not want to spend time negotiating and seeking manager approval on certain price-breaks if you’re not serious about buying the car. Salary negotiations can run similarly.

Acting “out of their league” may push the recruiter and hiring manager away as you will be perceived as not winnable. Similarly, in a negotiation, if they are going to try to fight for you to get more equity or a higher signing bonus, you need to be willing to play ball. If you make a request, they may ask for your verbal commitment that you will sign on the dotted line. If they meet a demand and you follow up with an additional demand, that may end up being a deal-breaker.

Be Prepared for the “Salary Expectations” Question, especially during casual moments or conversations.

Don’t give a number first. It is illegal in many states to ask about salary history, but asking what your salary “expectations” are is a work around. Though you can and should respond, avoid stating a number if asked about “expectations” or any other question designed to get you to name the starting price.

Here is one potential answer to the salary expectations question: “Right now I am more interested in the company and the fit. For compensation, I’m looking for a fair and competitive package. I work very closely with my financial planner - if you could give me a range, then that will allow us to have a productive conversation when we meet next week.”

If you try to fight it off but are still “forced” to state a number, be prepared, present an objective measure, and emphasize that it is a good place to start. For example "an average total package for an Engineering Manager with my level of experience in San Francisco is around $350,000, so that would be a good place to start the conversation.”

General tip: It can be helpful in a negotiation to not be the “decision maker.” Stating a need to discuss certain aspects with your accountant, planner/advisor, or spouse/family can put more pressure on the company to provide you with specific information.

STAGE THREE: JOB OFFER

Get it in Writing: After they call you with the offer, email them to confirm all the details in writing. Remember, be winnable and don’t be the decision maker. You can state that you’re excited and just want to confirm all of the details for when you discuss this with your team/family.

Bidding War: Let other companies know that you received an offer. Be sure to let them know you’re still excited about their company and ask “is there anything you can do to expedite the process?” This gives the company a sense of urgency.

A Few Notes on Equity (RSUs and Options): Equity compensation is one area where numbers can be overstated or misinterpreted in job offers.

RSUs are often presented in their total 4-year value versus an annual number, so they end up looking larger. For example: $100,000 of Restricted Stock Units looks a lot better than ~$15,000 per year, net of tax, for 4 years
It is important to learn whether refresh grants are expected in future years. Many companies give out new equity grants every year or so, but some do not. You should find out if equity is going to be a part of your annual compensation adjustments moving forward or if it was just a one-time event at hiring.

If the company is publicly traded, you are likely to receive RSUs which will have some value whether the share price goes up or down (as long as it is above $0.00).
If the company is private, any option (ISOs or NSOs) grants aren’t worth anything unless the value increases and you’re able to realize the value via sale. In other words, if the value decreases below the grant price then the options are “underwater” and have no value.
All else equal, public company equity where you’re able to realize the value via selling shares should be valued higher than equivalent private company equity with no, or limited, liquidity.
Private company RSUs can be the ultimate “golden handcuffs” as you are somewhat forced to stay at the company until a liquidity event, unless the grant paperwork says otherwise. At hiring, they may tell you the IPO is expected in 1 or 2 years, but it could turn out to be 5 or 6.
RSUs should be viewed as additional compensation, while private company stock options can cost you money in the short-run if you decide to start exercising the options (paying for the shares). RSUs are more like an extra cash-bonus, while options are an “option to purchase” shares with your own money. The higher the option price, the more shares exercised, the more expensive it can become. A lower salary and more options are OK in theory, until you may need the funds to pay for your exercises.

For private companies, pay more attention to what the actual fair market value of the shares are versus what they tell you it’s worth, what the preferred price is, or what the stock is going for on the secondary market. It is not uncommon for new employees to get shares with say a $5 value on them while being told that they’re really worth about $15 on the secondary market. The secondary-market pricing can be useful to know, but you might want to take that number with a grain of salt when calculating the total value of the offer.
For private company stock options, be aware of the PTE (post-termination exercise) window. This is the period of time, usually 90 days, after you terminate employment that you’re able to exercise your options. For most, this is too tight of a time period to make potential life-changing financial decisions that can involve large sums of money, major tax bills, and potential borrowing of funds. The 90 days is an IRS standard for ISOs, but not NSOs. For ISOs, companies are able to convert them to NSOs in order to provide you more time. According to Carta, over 90% of companies stick to 90-days but more companies are extending the PTE window. This is an area you may be able to negotiate up-front, or while you’re planning your exit if you’re a key employee. Here is a list of companies that are known to have extended PTE windows.

Play Some on their Turf: E-mail is the preferred communication channel for you, the prospective hire, as it gives you time to think and strategize. You’re a bit less familiar with salary discussions versus the recruiter. Phone is the preferred channel for the recruiter. Get as much as you can in email, but under the “Be Kind and Respectful” umbrella, have at least some of your conversations over the phone. Since it is not your ideal turf, just be prepared with certain “outs” such as the “not being the decision maker” technique.

Broach the Topic: Hi Recruiter, Thanks again for confirming the offer details via email. If you have time this week, I would love to connect to further discuss the details of the offer. (Don’t say “negotiate.”)

More Information: Before making an ask, it may make sense to find out more information on the calculation of the offer. Is there a formula behind it? Is there a salary range for the role? Where do you fall in that range? Larger companies usually have a formula when it comes to “levels” and “bands.” Being armed with this knowledge will not only help in this discussion, but will also assist in navigating your career at this company.

As an example, if you know that your role is a Level 6, and the salary offer is towards the top of the Level 6 band, asking for more salary may not be the best move. Instead it may better suit you to negotiate on equity or the signing bonus.

The Ask: Since you are well informed (see Stage One), you should have a good idea of what to ask for. Don’t ask for more vacation days if they have an unlimited PTO policy. Don’t ask for more stock if you know they are stingy on stock.

What to Say: “The offer and overall package look really good. Right now I’m deciding between you and one other company. I think there are two adjustments to the offer which would make this decision a lot easier for me.”

Be Specific: Recruiters don’t like it if you ask for everything, so avoid the laundry list request. Focus on just one or two items and put down exact numbers. The more you jump around categories (especially after a NO) trying to get at least something, the less likely they are to give in on anything.

Have a Reason: It helps your case, and frankly makes it easier to ask, if you have a reason. “Is there a way you can increase the salary by X, because...”

Potential reasons include:

You’re giving up equity or bonus at current employer.
They need to match or beat existing offer from another company.
They need to match or beat your current compensation.
The offer is not in line with what market rate is for the role/your experience.
You want to buy a new home.
You need a new car to commute.
You need to support your family.
You would like to pay off student loans.

Commitment: If you ask for more, they may seek a verbal commitment. You can either give it to them, or try to hold them off. It’s important to give them a positive sign. An example of this is could be:

“I’m very excited about the opportunity and I am looking forward to reviewing the offer with my family this weekend. I’m not 100% comfortable making a commitment prior to those discussions. I take my commitments very seriously. I know that having the additional $15,000 signing bonus would really help in the discussions especially considering our goal to start a family soon.”

If they push for a Commitment: “Like we discussed, I’m not making a final decision until I meet with my family this weekend. I really like the company and the team, and am excited about this possibility. If you’re not comfortable asking for approval on the additional equity before you receive a commitment from me, I completely understand. Just so my expectations are in line – how confident are you that you’ll be able to secure the additional equity?”

Signing Bonus: Generally, among salary, equity, and bonuses, the easiest chip to knock down is the signing bonus. This is due to the one-time component of a signing bonus, versus the recurring nature of a salary.

Note: Don’t ignore the other aspects of the job: hours, commute, perks, travel, etc. Sometimes we can be so focused on the compensation package while ignoring the dreadful commute, or the personal/family time that will need to be sacrificed.

Additional Notes from Corporate Recruiters:

Managers don’t want to max you out at the top of a “salary band” since they’re also thinking about future raises and promotions. They want to hire you and keep you happy. If the absolute top of the band is $100K, they may try to get you at $90-95K. That way they can give you a raise for 1-2 years prior to a promotion that launches you into the next “band.” If they give you $100K and don’t expect to promote you, then you probably aren’t going to be too happy if you don’t get a pay raise.

They’re usually expecting you to come back for more, so they typically factor that into their initial offer. If they want you at $150K, they may offer you $140K or $145K. A rare exception is a company that explicitly does not negotiate on offers, but you are likely to be made aware of that policy when you receive the offer, if not earlier.
Recruiters generally do not get bonuses on how much they’ve saved the company, e.g. hiring someone for $3,000 less than expected. Similarly, they don’t get penalized for hiring a software engineer with an extra $5,000 signing bonus. Recruiters can have a lot of pressure from hiring managers and their goal is to hire good employees.
Be mindful of industry conditions when measuring how aggressive to be with your negotiation. For example: During the good times, like 2021, you likely had more leeway than 2022 when layoffs were affecting most major tech companies. Having job offers pulled is rare, but it can be more common during times of contraction.

in closing

To create this guide, we’ve pulled from many different experiences, sources, and opinions. Prior to hitting publish, we had already seen great outcomes using this guide as a tool.

Though it cannot be all encompassing, we aimed for maximum value per word. Many negotiations are similar, but they’re all a little different. To account for any and all situations would have required a book. Please use this guide, use your best judgment, and we wish you the best of luck.

If you have any experiences to share or wins from using this guide, we would love to hear from you. Our hope is that we can refine this over time.