As you move up the corporate ladder, compensation packages change. Knowing how to navigate a job offer at the CMO level gives you the ability to create a win-win for you and your new employer.
If you are fortunate enough to be working with a top marketing executive search firm, let them manage the direct negotiation for you. They have access to information on salary range, bonus structure, long-term incentives, etc. that you won’t have. If they are good at what they do and/or have previously worked with the client, they will understand which aspects of the negotiation to push for more.
If you are relocating, make sure to do your research online to determine any changes to your cost of living. This is a good time to use multiple data points. But as with anything else, you cannot believe everything you read on the internet.
Generally, the elements of the package are relatively consistent; although they can be weighted differently from company to company. Typically, the components of the package we work with include: base salary, annual performance bonus and long-term incentives (most likely in the form of stock).
How negotiable these items tend to be are very different. As you are negotiating, remember a few simple concepts:
- Typically, the first person to offer a number in a negotiation loses.
- Going back and forth too many times and putting undue stress into the process can have a carryover effect as you begin your first day.
- Be careful not to win the battle, but lose the war.
CMO executive recruiters know you typically get one chance to go back and ask for more once you are presented with an offer. Some organizations will tell you that they like to put their best offer on the table, so you have a choice to take it or leave it. Although this is unusual, they are pretty serious about this. Is it possible for you to ask for a little more under this circumstance? If so, make sure you have data to support your case.
You may like: 3 Resources to Help You Calculate Competitive Compensation for Your Next Marketing Executive
How to Negotiate Your Salary, Signing Bonus & More
Negotiating the Compensation Package with CMO Executive Recruiters
In addition to understanding the client really well, working with experienced CMO executive recruiters gives you an additional edge as they will have a better understanding than you do about your current market value based on your experience, skills, and expertise.
So, which of the following common components of an executive job offer are the key areas you should consider negotiating before you officially sign on the dotted line as a CMO?
This component will vary from company to company but on average, it will make up 55-75% of your total compensation. Not only is it the largest share of an annual compensation package, but it is also the most negotiable and thus should be your primary focus during compensation talks.
Annual bonuses are usually set by levels or grades of positions in an organization. However, if you push for an increase in your base compensation, your bonus will also increase (if it is structured as a percentage of the base salary).
Use the one chance you get to ask for more than the employer offers wisely. Take time to think through your response to the initial offer as you want to deliver a complete reply. It is not strategic to keep going back and asking for one more thing when all items could have been addressed the first time.
Pressing for a base compensation that aligns with your expertise and the value you’ll add to an organization sets the framework for other elements in the job offer. So, make sure you push for what you believe is fair – a win for you and a win for the employer based on the value you add to the role and company.
Short-Term Cash Bonuses
Short-term bonuses based on company and/or personal performance might be quarterly or monthly, but are typically done on an annual basis. These bonuses are based on a variety of performance-based metrics – from individual KPI’s to sales to profit increase or to a pre-determined percentage of profits.
Since most organizations have a fixed bonus percentage, executives receive a set bonus target based on their level in the organization, making little room for negotiation. However, as the Head of Marketing, you want to understand how your bonus will be calculated and how those performance measurements will be determined – is the bonus based on individual performance, company performance, or a mix of the two?
In some cases, you might have input in what the performance benchmarks are that you will be measured on. In this case, don’t rush in setting these up. If you have extra time to learn about your new employer, it will help in setting your own realistic goals. In order to successfully reach incentivized goals, you must be prepared to agree on set KPIs with the CEO once you gather enough data and have a good understanding of the role and company. Setting your own KPIs before you start is ineffective because you don’t know enough about the role and its requirements. A good question to ask during the negotiation process is, “Will I have input in establishing core KPIs once I get there?”
A sign on bonus is a one-time payment offered to new employees as an incentive to get them to join the company, or possibly structured to offset some (or all) of a bonus they might be walking away from with their current employer. Other than the few organizations who refuse to do them, this is generally an area where organizations have flexibility. It is not unusual to see a sign-on bonus between five and twelve percent of the base salary. If you can get ten percent of your base, this is great. However, do not trade base salary for a sign-on bonus as a higher base is more valuable long-term.
Understanding the flexibility you have regarding performance bonus and a sign-on bonus is important in negotiating the best possible package. Having a CMO executive search firm in your corner is also a big help.
Long-term incentives generally come in two forms, but there are other options out there. The two most frequent items we see are Stock Options or Restricted Stock Units (RSU’s). If you are receiving options this, the company is likely at an earlier stage and is still private, so the amount of options is likely negotiable. If you are dealing with an already publicly-traded company and are being offered RSUs, the amount is likely relatively fixed and less negotiable. In either case, you will see a three to six year vesting schedule with four years being most common. In either case, it does not hurt to ask. However, be reasonable.
Benefits and Other Intangible Items
As a CMO executive search firm, we see candidates who often forget to consider some of the quality of life aspects of their package. When it comes to benefits, you will receive the same as other employees in the organization or those at your level. Do not expect to be treated uniquely when it comes to health insurance or matching on the 401K. What is flexible tends to be PTO, especially if you are leaving a job where you have more than they currently offer.
Whether or not these items are negotiable, you want to understand them to avoid any surprises after you start.
Flexibility on the title of CMO or any other marketing executive role varies from company to company. In general, it does not hurt to ask.
There are many aspects of the CMO compensation package that are negotiable, and some that aren’t. Knowing the areas you have negotiating power in will help you get fair compensation.
However, as you approach the negotiation process, it’s important to keep a realistic perspective on your position and not overreach on any elements. The main goal of negotiation is to get the pay that you deserve for the value you can add as a CMO or other marketing executive. Sustaining a strong relationship with CMO executive recruiters who you can trust is important. They have an understanding of your market value and want to create a winning situation for both sides.
You are in your strongest position for negotiation before you formally join a company. So, make your best case for the offer you deserve during this stage.