I recently spoke at The Womens Financial Summit 2022 (hosted by Woodruff Sawyer) on the topic of how women executives can better negotiate their compensation packages. While that talk was addressed to women financial executives, many of my negotiation tips apply to any CFO (and in fact any executive) who is negotiating his or her compensation package.
In these challenging economic times, with market gyrations, supply chain issues, tighter availability of financing, and increased need to manage cash efficiently, talented strategic and operational CFOs are in greater demand now, more than ever. As such, it is important to be at the top of your confidence game when negotiating the terms of your compensation package.
Here are ten tenets I believe all strong executives should follow as they pursue compensation negotiations in 2022 and beyond:
#1: NEGOTIATE WITH CONFIDENCE: THINK LIKE A MAN
Women executives need to stop questioning their worthiness for C-suite and executive positions. Would a man ever ask “Can I do it?”, “Am I worthy of it?”, “Is it too much?” No! Women (and men) should just take the position and embrace all that comes with it. There will always be lessons to be learned on every job, and of course, not everyone has all the skills for the next level job. But just understand that be kind to yourself and be confident that you can learn on the job. Just “take it”!
#2: STOP FALLING PREY TO THE IMPOSTER SYNDROME
Erase the tape of self-doubt reverberating in your head: “What if they find out I am not good enough?” Many of us, including myself, have asked this question of ourselves, maybe over and over again — but you just need to stop it! I had that tape play in my head when I made big leaps in job positions – from General Counsel to CFO, from CFO to CEO, etc. I now know that it gets you nowhere, and often puts you in a kind of thinking paralysis. Switch off the tape, focus on all your best working attributes and your past successes, and know that what got you to where you are will get you to where you want to go.
#3: NEVER DOUBT YOUR WORTH – AND IF YOU DO – FAKE IT UNTIL YOU MAKE IT!
This absolutely works. I’ll give you an example. I took a leap with a position many years ago where I truly did not have every skill for the job – an EVP COO and CFO position at a public company. In fact, the Audit Committee Chair knew that, and instead of trying to help me, he actually wanted to see me fail. And fail BIG. But instead I chose to remember all the successes I had at my former position, which propelled me to this new one, and that I had the confidence of the CEO, with whom I had worked before. So, I smiled every time I entered a room with the Audit Chair present, took command of the room (and this was hard for me), spoke right to him and looked him straight in the eye. I literally faked my confidence. But you know what? It worked! I felt so good about it, the Audit Chair somewhat cowered at me — and it allowed me to learn behind the scenes what I needed to know and to be successful in that position. We sold the company later for a huge premium and the Audit Chair later came back to me and said, “I really, really underestimated you.” I told him that yes, he really, really had.
#4: ALWAYS RESEARCH YOUR VALUE
Its critical that you understand your compensation value as an executive in the context of today’s job market. I have always had a trustworthy HR colleague from former jobs that I could discuss any new positions I was looking at. They provided to me the research and analytics I needed to understand my current compensation value. You want to go into every discussion on your compensation armed with current market information about both cash and equity benefits which will assist you in negotiating your package. I cannot stress how important this is; nurture your relationships with HR colleagues so that they can become part of your core advisor group to help you know your monetary value for any position that you are contemplating taking.
#5: ALWAYS COUNTER THE FIRST PROPOSAL – YOU WILL ALMOST ALWAYS GET MORE AND MAYBE LOTS MORE!
There are times, particularly in the case of start-ups, when you are offered a position and you know that the compensation they are offering you is not what you want, or may need. So, my recommendation is to always counter. Do your homework first, talk to that trustworthy HR colleague, collect the data, and then push back graciously.
I helped to counsel a regulatory executive who recently received an offer that was below market. The company was a relatively new start-up with great backing, but the young CEO was a bit inexperienced in negotiating compensation packages and knowing what to offer. So this executive educated him. The executive told the CEO what he thought this new position entailed, what the data showed, and then what he wanted. And the executive got what he wanted – because the data showed that he deserved it – and the executive knew his worth.
#6: NEVER PLAY THE “GOOD GIRL”
How many times, as women executives, do we leave money on the table because we don’t want to appear “greedy”? I can literally write a book on what I have left on the table throughout my career and why this happened. It’s Good Girl syndrome! I don’t want to rock the boat; I don’t want to appear greedy. What I am already getting is enough. Hmm. Think of Tenets 1 and 2 here and please follow them!
Let me provide you with a clear example of how playing Good Girl will get you nowhere. I was going to join a company in a big leap position – the one I mentioned in Tenet 3. The CEO, who knew my worth from my previous job where we had worked together, offered me a 3-year Change of Control package, just like the one he had. And guess what I did???? I said no – literally. Instead I said, “You are the CEO and deserve the three year package, and I will take the 2-Year Package like the other VPs.” Can you believe it??? This is what I actually said, and I was an EVP with two jobs (COO and CFO) – not just a VP! I played the Good Girl to my own detriment. DON’T DO IT! This gets you literally nowhere.
#7: NEVER THINK “THEY WILL TAKE CARE OF ME”; INSTEAD THINK: I SHALL TAKE CARE OF MYSELF BY KNOWING WHAT I AM WORTH
Always advocate for yourself. This is so important, and will help advance your career over the short and longer term.
Recently I joined a Board, and as the company was new, I realized that I could have a true voice in ensuring that the structure of the compensation for directors was at market. So I asked to join the group that was appointed to look at compensation packages for both the company’s executives and the directors. We reviewed the data, and ultimately pushed back against the compensation proposals that were provided to us. As a result, I believe I truly assisted in getting the directors an at-market compensation package of both cash and equity that was in everyone’s best interest. It does pay to advocate for yourself (and others in the right situation).
#8: THINK “ASSET CLASSES” WHEN NEGOTIATING EXECUTIVE COMPENSATION
Always think of asset classes of executive compensation when negotiating your package – it’s not just about the cash, or just about the equity, it’s about both… and all the other benefits as well.
Asset classes of compensation include:
– CASH: annual salary and annual cash bonus.
– EQUITY: Stock options, RSUs; LTC; Deferred Compensation.
– BENEFITS: 401k match; Indemnification Agreement; named as an Insured under D&O insurance and any other benefits that you feel you need such as a hybrid work schedule or T&E for work travel.
Remember – if you don’t ask for it – you will not get it.
#9: YOU CAN HAVE IT ALL – JUST BE SURE YOU HAVE EXTRA SUPPORT AT HOME
Ok – here’s another story for you… What was I thinking??
Back in the day, I was asked to take on the CEO position from another CEO who needed to leave because of a Wells Notice issued to him from the SEC (a Wells Notice is a formal notice from the SEC informing a recipient that the agency is planning to bring enforcement actions against them). It was actually in my employment contract (I was then the CFO) that I would succeed the CEO after we had gone public, but this was an unusual situation as it was happening pre-public, and not in the timing we had envisioned.
Guess what I did? I said “I am not ready for the CEO job.” Why? I was dealing with a personal issue, and I did not think I could do it all. So I became part of the Nominating Committee to hire a CEO from the outside, and we ultimately took the company public. But what a mistake! I should have taken the job, not doubt my ability to do it, and I should have just asked for the extra support at home to be able to do it all.
So – the lesson here is that you CAN have it all. Don’t listen to any tape in your head that you cannot – and get that extra support at home that will truly allow you to take the job, and be able to do your best at it!
#10: NEVER LET THE OPINION OF OTHERS GET TO YOU – GO FOR WHAT YOU DESERVE
This is our last tenet and it is really important. Do not allow others and their opinion of you to stop you from doing the right thing, or stop you from getting what you (and your team) deserve.
At one point in my career, I was CEO of a company that was well-financed and had been around for 10 years with many long-term employees. When I joined, I did a survey of what the team needed around compensation and benefits, and every employee asked for a 401(k) match. There were only 45 of us, so the amount of dollars necessary to fund this ask was not large.
I did the analytics, and brought the materials to discuss with my Compensation Committee Chair. Not only did he say “no,” but told me that I was being greedy. Can you believe it? So I decided to work through the Audit Chair, who was a big fan of mine and who understood that this was a great benefit to provide to our employees. We worked the other members of the Board – and got it approved, with (of course) one negative vote (guess who?). The employees were thrilled and this engendered such good will for the management team amongst the broader team. The learning here for me was that I knew what was right for the employees, who truly deserved this benefit, and I did not let the Compensation Chair (and what he thought of me) stop me from making this happen.
I hope that the 10 tenets above drawn from my experience gained over a long 40 year career can help you as you excel in your career, take on bigger opportunities, and negotiate the best compensation package possible for yourself, and perhaps for others as well.