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sellouts posted:As someone who lurks this thread I just wanted to say thank you. Jedi Knight Luigi posted:Thanks to this thread I landed a 20% raise at my year review. Thanks, goons. If you aren't concerned about privacy can you be more specific? The story thus far got you 20%, maybe with your details the next guy gets 25%!
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May 7, 2015 19:04
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Yeah if I had gotten a 20% raise for my 2014 review (supposedly one of highest review scores in our entire company for that year) instead of the piddly 1.75% I actually received, I might be staying. How did you manage a number like that?
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May 7, 2015 20:52
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By being fairly underpaid in the first place. I was managing a small team (<30) of contractors for $15/h that I'd practically built from the ground up; in fact I tripled capacity since I started. At my year review they offered "3% (Max)"; I countered with $21/h (an aggressive but not insane number--a metric I learned from this thread) with the argument that there was a metric ton of projects we would not have been able to turn around without my help over the past year. After a week and a half of phone conversations with the COO (whoever said that they're the ones who set those caps in the first place was right), we settled on $18. For reference I have a BA in English and live in the Midwest (read: low cost of living).
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May 8, 2015 01:41
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And here we all affirm why percentage based raises are utterly garbage. Glad you're happy with things, but $18 an hour to manage anyone is still underpaid.
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May 8, 2015 02:03
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Richard Noggin posted:And here we all affirm why percentage based raises are utterly garbage. Glad you're happy with things, but $18 an hour to manage anyone is still underpaid. I still agree with that sentiment, and that sentiment is based on another thing mentioned over and over in this thread: your experience and merit can be used to leverage better compensation...at a company other than the one you're currently at. That said I still believe I'll be happy with it for the next year. It's a fun job that I really enjoy.
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May 8, 2015 02:09
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Boot and Rally posted:If you aren't concerned about privacy can you be more specific? The story thus far got you 20%, maybe with your details the next guy gets 25%! I am a bit concerned with privacy so I will just say that I had everything but 100% confirmed knowledge of comparable salary within the company. So I knew my initial offer and I knew what I would settle for. And I was confident in sticking to it despite it being significant in both number and percentage. I picked an excellent time to play my hand and had absolutely no care if I was let go. Which would have been a disaster to the company. I was concise, specific and unemotional in my concerns and examples as to my work and my benefit to the department. I had quantifiable data in regards to my workload both in quantity and value. I had previous examples of how issues with compensation were handled inappropriately and insultingly. I targeted my compensation as the single issue I wanted addressed with the person who controls it. And in my follow up meeting with another senior staff member I shared that I was being recruited by a company with deep pockets and a reputation for being awesome. At this time I also shared my goals, vision for the department, and concerns beyond my compensation to further drive my value, although this was almost entirely unneeded. I felt like I needed to make it clear that even with significant salary increase I wouldn't hang around if things didn't get fixed because I now knew I could get attention from other great companies. Basically, it was cold and unemotional, data driven response. I got to the point where I was unwilling to take personal sacrifices for the company (recent changes I won't dig into caused this). And if they let me go it would have been really stupid. I've been around far longer than the average for employees my age, my industry, and my company. With the changes mentioned I stopped treating the job as a family (it's not but it was small and got bigger) and made the decision to force a drastic change in my trajectory for the work I was already doing. If it wasn't coming from them it would have come from another company. I was angry and I was ready to be forced to find a better solution. Tough to negotiate with someone in that mindset who fills a role that others are struggling to hire in.
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May 9, 2015 21:21
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sellouts posted:I am a bit concerned with privacy so I will just say that I had everything but 100% confirmed knowledge of comparable salary within the company. So I knew my initial offer and I knew what I would settle for. And I was confident in sticking to it despite it being significant in both number and percentage. Sounds a lot like what I did a couple years ago for a 31% boost. I followed it up last year with an 8% bump. Good job, you've got the adversarial mindset and dispassionate evaluation down cold. Remember to switch it off and be kind and cooperative the other 364 days a year to reinforce your value. While everyone is replaceable, nearly no one is replaceable for free.
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May 11, 2015 14:16
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Yeah, congrats on the outcome. Want to stress that being cold during negotiations isn't really required. The right use of emotion can be very powerful, but you certainly want to separate your decision making from your emotional response to an extent. To give an example, if you make an offer and the party you're negotiating with comes back with a lame counter bid, it's ok to tell them you're disappointed with it, as unless they're very skilled they'll feel some emotional pressure to respond. The emotion you want to avoid / mitigate is the kind that will cause you to make irrational decisions, or which presents as weakness. Having a strong BATNA helps avoid fear or irrational attachment, and focusing on factual negotiations avoids the second issue. The latter is important more so in large companies where you may not be negotiating with the ultimate decision maker. The line manager or HR person's sympathy for your sick dog or whatever isn't going to be communicated unless it's tied to something objective. No company ever decided to pay someone more just because they said they needed it.
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May 12, 2015 18:26
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I'm currently being recruited (by a headhunter) for a sales position at a major company. She asked me what my total compensation is at my present firm (45k) and when I told her she kinda blew her top and said that's not enough. She asked me for a target sum and I said 60k which she said would be very difficult if they asked how much I presently made. I highly suspect this position probably pays 70k base salary and I may have just hosed myself out of good pay. She claimed she would "fight" to get 60k for me at least if pay came up. I realized that the moment their HR dept called me directly she was basically out of the game and any further involvement on her part is unnecessary. Is there a way I can prevent her from jeopardizing my salary discussion? I realized much too late that her recruitment strategy might be to present me as a cheaper candidate so she can earn her commission sooner as she doesn't get paid a percentage of my salary but rather an arbitrary lump sum.
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May 13, 2015 00:47
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Hello goons! I was recently approached by one of the managers at my current work (which is a pretty small business of approximately 45 people) to come and work in his team as (I'm assuming) "Operations Administrator", whilst I am currently an "Office Administrator" that serves in the Training Department. To give a bit of background, I currently make $42k a year, but am decently overqualified for this position (have a degree in Accounting and HR + a years experience in Training / HR) and took this job as a "stop gap" as I got made redundant December last year and as a result took a pretty hefty pay cut of approximately $15k (or around half that if you adjust for cost of living). Anyway, I was after some advice on two things: (1) If the Operations Administrator job does go ahead, obviously my BATNA is fairly low (they know my current pay and what role I'm currently in etc), but I feel that the jump in responsibilities should come with a pretty decent (around $6k, to bring me to $48k) pay jump. Also, it is highly likely that I will have to pull 50 hour weeks a lot of the time, so my effective hourly rate will likely remain the same anyway. What is an appropriate way to phrase "I want more money because there's going to be more responsibilities" and who would I actually raise this with, the Operations Manager or my current boss (who is actually more senior than the Operations Manager)? (2) If the Operations Admin job doesn't go ahead, I still want a pay increase at review time, as I've had a massive increase in responsibilities over my predecessor and since I started. Is the best way to approach this to list off all the new responsibilities I've been given and then ask for one? TIA!
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May 13, 2015 02:47
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This is a softer negotiation question, but I'm being considered for a new role/promotion internally, the initial discussions went quite well and I think both me and my boss (the CEO, so he has direct unambiguous power to do thing) had positive feelings about it and good expectations. Now it is a quarter later and I feel that he's dragging his feet on the issue. I'm meeting with him to present a report of some findings how not doing what we discussed last time is impacting the company, so I feel on solid ground with the facts. But what's a productive way to frame the discussion and get him to start moving forward again or to level with me if the situation's changed?
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May 13, 2015 06:29
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This may be a bit off point, but if you are making 42 and were making 57 previously, why don't you try to make an alternative thats another at least 57 outside the company? You've done it before with less experience. This is especially relevant if you are forseeing salary 40 mid at 50 hours.
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May 13, 2015 12:44
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Guni posted:What is an appropriate way to phrase "I want more money because there's going to be more responsibilities" and who would I actually raise this with, the Operations Manager or my current boss (who is actually more senior than the Operations Manager)? He said he'd get with HR to discuss the possibility. Our follow-up meeting is this afternoon so fingers crossed. One thing though, is that I'm perfectly content to pass on the job if there isn't a significant salary bump included. You would want to talk to the manager who brought it up with you, your current manager might not know you're considering a move and this is where it gets a little dicey with inter-office moves. I basically have to have a mutual understanding with the hiring manager that I would get the job once I officially apply. I won't bring it up with my current manager until I do officially apply. Each company is probably different in this regard but you need to play the politics game a little bit. The hiring manager would probably be able to advise you when to tell your current manager if he/she doesn't already know.
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May 13, 2015 14:03
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Guni posted:Hello goons! I was recently approached by one of the managers at my current work (which is a pretty small business of approximately 45 people) to come and work in his team as (I'm assuming) "Operations Administrator", whilst I am currently an "Office Administrator" that serves in the Training Department. To give a bit of background, I currently make $42k a year, but am decently overqualified for this position (have a degree in Accounting and HR + a years experience in Training / HR) and took this job as a "stop gap" as I got made redundant December last year and as a result took a pretty hefty pay cut of approximately $15k (or around half that if you adjust for cost of living). Let's assume you average 45 hours/week at the new position. That's 12.5% more hours than you're putting in now. 112.5% of $42k is $47,250. You ask for $48k and all you're getting is an equivalent hourly increase - nothing for additional knowledge, responsibilities, etc. If it were me, I'd ask for $55k and wouldn't take less than $50k.
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May 13, 2015 14:53
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I messed up last week talking to a recruiter and gave them my salary. Yesterday, they emailed me to tell me one of their clients is interested in a face to face interview tomorrow (as in today). I explained to them I couldn't take tomorrow off (Monday was a personal day and I'm taking Thursday afternoon for a doctor's visit, not that I told them that), and their response was "what about 8 am or after 5?" I countered with next Monday, they came back with a phone call this afternoon, I said okay. An hour before the phone call, they canceled wanting to postpone to tomorrow afternoon, when I'll be in a doctor's office. How terrible would it be to drop this completely? I'm significantly underpaid for my field and location, and my feeling is that if they're trying to commandeer my time like this before they start paying me, they're gonna suck to work for and keep underpaying me. I'm also working with a few other recruiters now who I didn't give my salary to, and just set up a face to face with one of their clients for Monday afternoon. It seems like explaining to them that I've found other opportunities I'm more interested in pursuing would be a better idea.
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May 14, 2015 00:38
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Kalenn Istarion posted:Yeah, congrats on the outcome. Want to stress that being cold during negotiations isn't really required. The right use of emotion can be very powerful, but you certainly want to separate your decision making from your emotional response to an extent. That's kind of it. When you've been at a company for over 10 years from when it was basically a start up and you were a kid when you started, combined with questionable leadership it is almost required. They are like family and when it comes to money, in my situation, it 100% needed to come across as factual, confident and not asking. Again, specific situation, but if I showed an ounce of flexibility or concession I can tell you they would have used it against me. They had done it before. And they're not normal, so I understand this not being applicable outside of my situation which was a hesitation to post about it to begin with.
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May 14, 2015 16:48
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I have a full-time salaried position. I work with some guys who have similar but slightly different scope of practice than me who want to get a consulting company started on the side, as a part-time thing. If they got it going, they'd like me to be on board to cover the things they can't do. I was asked by one what I thought fair compensation would be, but I've never consulted and I don't know anyone in my field personally who does, so I said I'd have to look into it. Anyway, I think my current hourly equivalent rate would be too low, but what's typical for consultants? Current hourly equivalent rate plus 20%? It's important to note that I wouldn't be seeking any of the work, they'd be handing it to me. There's also other people they could ask to do it. At the time, he asked if my current hourly rate would be fair, so that's where negotiation would start. Uranium 235 fucked around with this message at 17:01 on May 14, 2015 |
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May 14, 2015 16:57
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Uranium 235 posted:I have a full-time salaried position. I work with some guys who have similar but slightly different scope of practice than me who want to get a consulting company started on the side, as a part-time thing. If they got it going, they'd like me to be on board to cover the things they can't do. I was asked by one what I thought fair compensation would be, but I've never consulted and I don't know anyone in my field personally who does, so I said I'd have to look into it. You have to pay the other half of FICA, get no benefits, they don't have to pay much if any overhead, and they can stop giving you work whenever they want. I don't think I'd accept anything less than 2x and would probably ask for more though that in part is would be driven that I really wouldn't want to work the extra hours.
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May 14, 2015 17:01
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asur posted:You have to pay the other half of FICA, get no benefits, they don't have to pay much if any overhead, and they can stop giving you work whenever they want. I don't think I'd accept anything less than 2x and would probably ask for more though that in part is would be driven that I really wouldn't want to work the extra hours. If they form an LLC and I become an employee of that LLC, I wouldn't be considered self-employed, right? I'm not sure what their plan is regarding that. If I do this I might have to stop doing my own taxes.
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May 14, 2015 17:07
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So, I'm being recruited by the consulting arm (non-tax/accounting) of one of the Big 4 and I have an in-person meeting with a partner next week. I've spoken with him multiple times over the phone and have had several other interviews (phone and in-person) with directors on down to senior consultants/associates. He just happens to be on the east coast (where I would be located) and wanted to meet me in-person to "firm some things up." I've also been sent the detailed benefits package that the company offers (info on deductible, co-pays, etc.). This is making me think that I may be offered the job during this meeting and have to negotiate while I'm there. Is this a normal thing and is there anything I should be prepared for with an in-person negotiation if I'm correct in my assumptions?
Chaotic Flame fucked around with this message at 20:37 on May 14, 2015 |
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May 14, 2015 20:24
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Chaotic Flame posted:So, I have an in-person meeting with a partner from the consulting arm (non-tax/accounting) of one of the Big 4. I've spoken with him multiple times over the phone and have had several other interviews (phone and in-person) with directors on down to senior consultants/associates. He just happens to be on the east coast (where I would be located) and wanted to meet me in-person to "firm some things up." I've also been sent the detailed benefits package that the company offers (info on deductible, co-pays, etc.). This is making me think that I may be offered the job during this meeting and have to negotiate while I'm there. Is this a normal thing and is there anything I should be prepared for with an in-person negotiation if I'm correct in my assumptions? I work in Big 4 consulting. In my experience, the official offer and negotiation is done with the hiring manager. During my interviews, the partner/MD/etc only spoke about the position, the team you're working with, the client you're servicing, etc. I would still familiarize yourself with the median pay range for the position/office location just in case. It's possible that different Big 4 companies will handle this part differently. One thing I wish I knew when I was negotiating my hire: they can totally add on a signing bonus.
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May 14, 2015 20:42
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Uranium 235 posted:Okay, I forgot about FICA. In my salaried position, my gross income is right at the FICA taxable maximum. Would income from self-employment be exempt if it goes over? Apparently I need to read more about this. Even if you are at the social security maximum, you would still have to pay both halves of Medicare (2.9% total) if self-employed. A lot of people don't want to deal with withholding taxes and filing quarterly payroll returns when starting a small business, so they might want to hire you as an independent contractor for simplicity. I agree with asur that 2x your current rate might be a good ballpark if you will be considered self-employed. JohnnyPalace fucked around with this message at 01:50 on May 15, 2015 |
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May 15, 2015 01:45
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Uranium 235 posted:I have a full-time salaried position. I work with some guys who have similar but slightly different scope of practice than me who want to get a consulting company started on the side, as a part-time thing. If they got it going, they'd like me to be on board to cover the things they can't do. I was asked by one what I thought fair compensation would be, but I've never consulted and I don't know anyone in my field personally who does, so I said I'd have to look into it. As someone who recently went into full time consulting, I can say you should be prepared to walk for anything less than double. An employer's cost includes benefits, any retirement stuff, elements of tax, and generally comes with a minimum work commitment. If for no other reason, the risk of not getting work means you need to make more when you do get it. Chaotic Flame posted:So, I'm being recruited by the consulting arm (non-tax/accounting) of one of the Big 4 and I have an in-person meeting with a partner next week. I've spoken with him multiple times over the phone and have had several other interviews (phone and in-person) with directors on down to senior consultants/associates. He just happens to be on the east coast (where I would be located) and wanted to meet me in-person to "firm some things up." I've also been sent the detailed benefits package that the company offers (info on deductible, co-pays, etc.). This is making me think that I may be offered the job during this meeting and have to negotiate while I'm there. Is this a normal thing and is there anything I should be prepared for with an in-person negotiation if I'm correct in my assumptions? The partner will be looking at: - fit - business sense - can they put you in front of clients - some firms will have the partner make an offer, others won't, so you should absolutely be ready to negotiate. Keep in mind the advisory practices at the big 4 have relatively constrained comp bands related to their histories of coming from audit, so if the number you're getting isn't to your liking for the title you're interviewing for you may need to push to be in a higher band to see better pay. For example, an alternative to the consulting practice I just started was a 'Manager' level role at one of the big accounting firms. I'm billing more than double that hourly rate and was told, after some pressure, that there's a hard cap and the hiring situation is such that they're not looking for anyone in a higher paying band in the group I was looking in. I was given a hard maximum they could get to as a final offer so I went the consulting route as I had lined up a 6 month project which would equal the same gross comp in half the time.
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May 15, 2015 22:12
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Chaucer posted:I work in Big 4 consulting. In my experience, the official offer and negotiation is done with the hiring manager. During my interviews, the partner/MD/etc only spoke about the position, the team you're working with, the client you're servicing, etc. I would still familiarize yourself with the median pay range for the position/office location just in case. It's possible that different Big 4 companies will handle this part differently. One thing I wish I knew when I was negotiating my hire: they can totally add on a signing bonus. Definitely planning on asking for a signing bonus since I'm being poached right before the stock I was given in my current company vests. Also, I've been at my current company less than a year and may have to pay back the relocation assistance I was given (not sure about this and can't ask without setting off some alarm bells). Kalenn Istarion posted:The partner will be looking at: Thanks for this. I'm actually not entirely sure what level I'm being considered at since they just like my skillset and I've been kind of shopped around to different areas within the practice to "find the best home" as they put it.
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May 17, 2015 15:07
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hey so its a little late for me to be asking this but i started a new job about two months ago. in the interview they asked me what i wanted for salary and i reponsded with a range and was immediately offered the highest number of the range and closed it right there. this sort of leads me to believe i likely couldve got more, is this a wrong feeling
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May 18, 2015 17:56
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Maybe yes, maybe no... like many things it depends. Just because you didn't have to pull teeth to get what you wanted doesn't mean you screwed up. Hopefully your high end was actually high. If the people hiring you aren't trying to lowball every potential hire and know the value of what they're hiring for, then it's quite possible that it was just a good fit right away even at your high end. Rather than play games over a couple thousand a year they just closed the deal. I've had this happen to me before and it turned out great, and I've also been part of hiring people where this happened. On the other hand, if you lowballed yourself out of the gate then its possible that they thought "oh man we were expecting to have to pay X but this guy just offered X-10 on his high end, done!" Edit: Also, yes, in the future just give one number that you are looking for, and base it on the high end of what you think your skills are worth. Easier to come down from your first number than to try to raise it after the fact. Ranges are too squishy and let people hear what they want to hear. Guinness fucked around with this message at 18:39 on May 18, 2015 |
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May 18, 2015 18:35
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tbp posted:hey so its a little late for me to be asking this but i started a new job about two months ago. in the interview they asked me what i wanted for salary and i reponsded with a range and was immediately offered the highest number of the range and closed it right there. this sort of leads me to believe i likely couldve got more, is this a wrong feeling Nope. You could have gotten more. Also that ship has sailed. Also don't give ranges, give one number. edit: Also if it was the top of your range that was the highest number you wanted so you should feel pretty happy about that. If two people agree on a price for labor readily that isn't a bad thing.
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May 18, 2015 18:35
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Company I'm currently in negotiations with wants me for a technical interview for six hours, on a workday, basically forcing me to either call in sick or burn a leave day to attend. On one hand I'm excited they find me interesting, but a big part of me wants to tell them to go pound sand. Each and every one of my previous jobs have been landed with no more than two 60-90 minute interviews. Thoughts?
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May 21, 2015 15:40
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Seems excessive, but you didn't tell us what the position is. Do YOU think it's excessive for the role?
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May 21, 2015 16:05
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A day long interview is pretty common in my experience even for junior positions.
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May 21, 2015 16:08
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Richard Noggin posted:Seems excessive, but you didn't tell us what the position is. Do YOU think it's excessive for the role? Software Engineer, Senior I guess (I graduated 10 years ago.) No management responsibilities. I think it's somewhat excessive. I've already had one interview and one personality/IQ-test interview deal. What my panties are mostly bunching up over is the fact that they just announced this in a one-liner e-mail. No "We-know-this-will-be-a-bit-of-a-pain-in-the-rear end-but-hear-us-out." asur posted:A day long interview is pretty common in my experience even for junior positions. OK. I'm not in the US though. I have another interview by phone tomorrow (different company) So I'll postpone any response until I've had that.
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May 21, 2015 18:44
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bolind posted:Company I'm currently in negotiations with wants me for a technical interview for six hours, on a workday, basically forcing me to either call in sick or burn a leave day to attend. It's on the longer side of normal but it's not out of the ordinary either. I had one company have me spend over 20 hours over a weekend doing a case study, which is another thing that's becoming much more common.
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May 22, 2015 12:19
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Dear SA. I currently have a fairly cushy job at a large MNC (FMCG / retail space). I'm in it for about 2 years now. I'm married with kids, mortgage, cats and am supporting elderly parents. Last week, I've been approached by a small VC fund for a role in a tech start up they are funding. I dig the idea of the start up, the role is very much in line with my skill set and industry expertise, it's the most 'senior' role outside of the founders and I like the guys themselves. I'm also excited by the prospects of doing something exciting in the industry that is lacking innovation and is ripe for "disruption" as they say. Here's the catch - although there's been no formal offer, the numbers they have thrown out (pay + equity) are worth about HALF of what I currently make. I haven't declined but it's coming to a point where an offer may be on the table and I'm not sure how to play it. Apart from getting a much higher offer, I would need to see the business plan details (which they haven't shared yet apart from top-line figures). Furthermore, given my situation, I'm very weary of taking this seemingly massive risk and walking away from my current gig - secure, uninspiring 'middle management' show at a slow, low growth MNC that offers decent pay, tangible perks and semblance of growth opportunities in the long term. Any thoughts on how to proceed with the negotiation would be appreciated. I've already taken the great advice here and refrained from talking numbers early on. Cries for return to sanity OR inspirational "Office Space - to - Mark Zuckerberg" stories also welcome. The Capitulator fucked around with this message at 04:07 on May 24, 2015 |
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May 24, 2015 04:04
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Recently a startup company in Silicon Valley approached me about a position and I interviewed with them. I have an engineering skill and experience set that is fairly hard to find but not unique. Currently I have a tenure track academic position (not tenured yet) and do a small amount of consulting on the side. They are interested in making me an offer (I suspect it will come in around ~$100K or a little higher) but have cautioned me that the salary won't make up for the housing cost of living difference. I put down a very high anticipated salary in the job application based off of cost of living differences. Previously I worked in industry and took a fairly substantial paycut to make the jump into academia. Currently I make approximately $95K for a 9 month appointment and depending on research funding have additional months of summer salary plus usually a little from consulting. When I was working in industry I made close to $115K + bonus when I made the jump to academia. Plugging in numbers to various cost of living calculators I end up with a range $170K to $230K for a cost of living adjusted salary in Silicon Valley. I really doubt they are going to offer me that much and the salary would be close to what I am paid in the Midwest (maybe a little higher) and instead much of the additional compensation will come through stock options (In fact hey have basically told me this). The position seems interesting though I have some concerns about it. I think the startup has a reasonable chance of succeeding though be no means guaranteed. They are very well funded so far and fairly early stage. I am also a little loath to give up the academic position as I think that door will close and I wouldn't be able to jump back though constantly having to write funding proposals gets old. The startup position would obviously be significantly more risky than my academic position. Ideally in my mind I think I would do some extensive consulting for a mix of cash and equity. I haven't had to evaluate offers before with stock options as most of my previous positions have been at established large corporations. What is the salary translation from the Midwest to Silicon Valley in your experience? What questions should I ask in regards to stock options? How would you evaluate them as a form of compensation? Has anyone seen consulting arrangements where the consultant is paid in a mix of cash and equity? Anything else I should be thinking about?
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May 24, 2015 04:32
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cycleback posted:Recently a startup company in Silicon Valley approached me about a position and I interviewed with them. I have an engineering skill and experience set that is fairly hard to find but not unique. Currently I have a tenure track academic position (not tenured yet) and do a small amount of consulting on the side. They are interested in making me an offer (I suspect it will come in around ~$100K or a little higher) but have cautioned me that the salary won't make up for the housing cost of living difference. I put down a very high anticipated salary in the job application based off of cost of living differences. Previously I worked in industry and took a fairly substantial paycut to make the jump into academia. Everything costs a lot more in SV. If you're in SV and making as much as you made in the midwest, I think you're getting a pretty raw deal right off the bat. Equity is somewhere between "I'll pay you in magic beans" and a lottery ticket. It's important to recognize the tax implications of equity, because it's not taxed like income is. Talk to a tax guy before you sign anything, because it's possible to lose money on them if you're poor at negotiating and also unlucky. 1099 + equity is probably a tax nightmare. There's generally a "cliff" for equity - some number of months after you're hired, your options begin to vest. If you leave or are terminated before then, you're poo poo out of luck. Most of these arrangements I've heard of vest some portion of your equity at the cliff (assuming a 48 month vesting schedule, let's say 12/48 get vested after a year and 1/48 get vested every month thereafter). This schedule is a matter of negotiation, and obviously you want it to be as advantageous to you as possible. The most important questions to ask are: How many shares will I have the option to exercise? How many shares are there outstanding? (or what is the total number of shares?) What is the exercise price per share? (Or what price can I buy them for?) What is the preferred share price? (Or what have investors paid for their shares)? What does my vesting schedule look like? These should let you do the math necessary to figure out if the company's trying to gently caress you right out of the gate. A company may attempt to claim the total outstanding shares is confidential information; don't be deceived, because it's impossible to evaluate the deal without it. (As an exaggerated example, "we'll give you a million shares" sure sounds impressive, but if there's a hundred billion outstanding shares, that's an awful deal.) You'll want to make all sorts of contingencies clear and written on paper -- what happens if the company fires you at 11 months and 29 days? What happens if the founders die suddenly in a plane crash? What happens if the company gets acquired? What happens if the founders attempt to dilute equity? And so on; there's plenty of stories of people getting hosed over, whether intentionally or by fortune.
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May 24, 2015 07:23
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Not only number of shares but some indicative sense of valuation. For a private company you need to know not only what the vesting schedule is but what the timing and plans for a liquidity event are. Your private I shares aren't worth much unless the company has a program to buy employee shares at estimated fair value or unless there's a liquidity event like an IPO or buyout on its way.
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May 24, 2015 18:40
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Thanks for all the advice, I really appreciate it.Tao Jones posted:1099 + equity is probably a tax nightmare. Would you explain a little more why you think consulting and taking compensation as cash + equity would be a tax nightmare?
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May 24, 2015 19:35
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You also need to see the cap table and somehow know what the founders and VCs plans are for the future of the company, because it's trivial for a company to dilute you to nothing, or not even to do that, but just to have lovely funding that has participating preferred rounds or the like and you end up with nothing. Equity in startups (other than "we're going public next week" startups, but even then...) is 100% a lottery ticket, and should be valued as such.
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May 24, 2015 21:58
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cycleback posted:Thanks for all the advice, I really appreciate it. It's not, but it's the classic combo for "ends up I owe $50,000 to the irs and only have $10,000 in my checking account help" post.
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May 24, 2015 23:06
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cycleback posted:Thanks for all the advice, I really appreciate it. I'm not a tax guy, but my understanding is that if you exercise your options outside of a certain timeframe, the IRS treats it as a long-term capital gain. If you exercise your options at other points, the tax implications are different. All of that on top of the implications of being a contractor is more mental energy than I personally would want to expend dealing with the IRS, and there's plenty of stories of the tax bill for equity being more than the amount of cash the person realized (due to the difference between how much the deal was worth on paper compared to in reality), so I'd suggest getting a professional opinion.
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May 24, 2015 23:07
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