The Resume and Interview ULTRATHREAD: they saw Amazonian attributes

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > The Resume and Interview ULTRATHREAD: they saw Amazonian attributes

movax: Aug 30, 2008

Tell me about salary negotiation / stock options at an engineering start-up! I have the offer letter, so now I think it is time to talk about salary (compensation not mentioned at all during the interview process, was all technical). I should definitely be asking for more (it's a decent offer, but my cost of living will be going up since I'm moving to a far more expensive area), but the question is how much more. Off hand, the target number in my head would be around 19% more, but I would be good with around 12% as well. This article does a lot to bring things into perspective, just don't know how much applies to the start-up area.

Stock options are new to me though...should I be asking for more shares? It's 2k right now, 25% vesture after year 1, 6.25% each after afterward at a fixed price. What's in-the-money vs. out-the-money exactly?

# ¿ Jun 13, 2013 15:50

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# ¿ Apr 29, 2024 08:25

movax: Aug 30, 2008

bort posted:

Call options are the right to buy shares at the strike price. If the stock price is above the strike price, it's in the money.

So, let's pretend your strike price is $10 and the stock price is at 15, and it's a year after you started. You can now exercise 25% of your options to get 500 shares that are worth $7500 for $5000. You have a few ways you can do this:
Fork over $5K is the simplest, and you now own 500 shares at $15.
You can do what's called a "sell to cover" where you'll sell off $5000 of your $15/share stock and get the rest, e.g. sell 334 shares @ $15 to get $5010, and you'll now hold 166 shares at $15.
You can sell the whole thing and collect $2500, minus fees and such and you'll have to withhold/save for taxes.

Out of the money just means that your stock is below the strike price, which means they're worthless (you never want to pay $10 for an $8 stock, right?). And note the last point in the previous paragraph: just because they're "in the money" doesn't mean you make money. You have to cover fees and taxes.

edit: simplistic strategy: if you think the stock is going to skyrocket, sit on the options as long as you can. If you think it'll go mostly up but it might go down, and you're gonna hold it, sell to cover. If you think it's as high as it's gonna go, exercise and sell the whole thing (and put it in a better investment).

edit2: I'd ask for more salary before I'd ask for more options unless I thought I was working at some new Apple/Google/etc. Assume options are worth nothing until there's serious evidence otherwise.

This firm has the chance to go crazy huge in the long term (maybe a decade or so) so I think I will definitely want to acquire and sit on as many shares as possible. That said, I think my priority would be salary->options->PTO in terms of negotiating. It was suggested in another thread to inquire about the total number of outstanding diluted shares available to get some idea of what chunk I am getting.

# ¿ Jun 13, 2013 22:10

movax: Aug 30, 2008

skipdogg posted:

Never count on stock to be worth poo poo. I never did. My stock paid out over the years, not a life changing amount but I paid some bills and bought some toys and a small down payment on a house.

I work with quite a few folks who were promised the loving MOON in stock options and they never were in the money on them. They all wish they would have focused more on cash compensation than gambling about stock. (see Motive Inc IPO)

Personally that vesting schedule is poo poo for a start up. You should be looking at 25% for the first year and then monthly vest through year 4 with 100% vesting at month 48.

When you say startup, what exactly are you talking about? Like 15 to 20 employees sitting on couches in SF? Or cashflow positive VC backed company with many employees?

20 employees backed (publicly) by ex & current Google, Microsoft, etc CEOs and VPs. I might have mistyped though, the offer says I'm fully vested at the four year mark (probably got the percentage wrong). I think I will focus on cash compensation primarily then and keep the options where they are at.

# ¿ Jun 14, 2013 05:51

movax: Aug 30, 2008

How much is "too much" to ask increase-wise during salary negotiation? Let's say I ask for 20% to get my desired target of around 15%, is that madness?

# ¿ Jun 16, 2013 01:33

movax: Aug 30, 2008

FrozenVent posted:

Can you back it up with concrete achievements and an increase in duties and responsibilities? 15% is a huge, huge, huge increase unless you haven't been adjusted for a few years. It's usually single-digit percentage a year.

Seriously I'm renegotiating my yearly contract this fall and I'm expecting 5%. That's with greatly increased responsibility compared to the job description I was hired on for. I'm going to ask for 10% because I have no problems walking away if they laugh in my face, and even I would think 20% would be too much to ask for.

Hmm, this is for an entirely new job, not my current one. Looking back at it, that is pretty insane, I think I will reword using "cost of living bump" or something like that, and see what they come back with.

# ¿ Jun 16, 2013 05:25

movax: Aug 30, 2008

FrozenVent posted:

You can get a much bigger increase for a new job, that's a completely different league. Especially when you're switching employers, according to what I've read that's when you get the biggest bump.

If it's the same company, it'd be pretty easy to find out how much they usually pay and work from there.

Yeah, it's an entirely new company, entirely new industry, only thing that gives me pause is them being a start-up.

# ¿ Jun 16, 2013 05:29

movax: Aug 30, 2008

skipdogg posted:

Definitely use your position to establish your pay at market rate. Starting a new job is the best time to get every penny that you're worth out of the company.

From a company perspective it's HARD to find the right candidate you want to hire. We spent 6 months replacing a guy who left last year before we found someone we liked. We weren't letting that guy walk away over 5,000 dollars a year. If the market is hot, and you're in demand, stick to your guns and get paid. 5K is nothing to a company but can have a major cumulative effect on your earnings over the course of your career.

IT DOESN'T MATTER WHAT YOU GOT PAID AT YOUR LAST JOB. If you made 25K a year as the only IT guy for a 40 person company, who gives a gently caress. You should be compensated appropriately for the work you are going to be doing. If you're going to be doing 80K a year work, you should be making 80K a year. The market goes both ways, if they have 50 qualified people to choose from, they can low ball the hell out of folks. If they take 6 months find a qualified candidate, well that person can demand top salary. Sometimes cash is limited, negotiate other benefits for yourself. Extra PTO, or extra stock, or even a specific workstation. We had one developer that wouldn't start unless we bought him a top of the line MBP. We had another who wanted an extra week of vacation. If the company wants you bad enough they'll accommodate within reason.

Yeah, I just got more PTO without a fight whatsoever, but my wishful salary requirements probably aren't going to get met; I think I'm getting everything I can from them. It's a tough negotiating spot considering other employees there took massive pay cuts from Intel, Qualcomm, etc. to join this firm. Pretty sure I'll at least get enough to achieve parity / slightly more than my current pay considering the 30% increase in cost-of-living (the Midwest is ruinously cheap).

President of the company should be calling me tomorrow or so with some final numbers re: stocks + salary, so we'll see what's up there.

# ¿ Jun 17, 2013 23:05

movax: Aug 30, 2008

ohgodwhat posted:

I was tremendously overdressed for my financial job interview when I was wearing a suit. It was awkward, but I was offered the job.

Now, I do have a question and I'm not sure where to put it. Since it's somewhat related to negotiations for a job, I'll try here.

The group I'll be working with when I start couldn't decide what job title to give me, either desk quant or research analyst. I didn't really care then which of the two it was, but in hindsight, I'd much prefer desk quant. Desk quants have much higher salaries than research analysts, and it's more prestigious. It also more specifically describes my actual role. However, the job title in the offer (which I signed, oops) was research analyst. My impression was that nobody there really cared what the actual job title was, so if I had asked earlier it probably could have been changed easily.

Now that I've signed the offer, and it's about a month after the interview, would it make me look bad to ask if it can be changed? I worry about looking somewhat ridiculous, and possibly signalling that I'm already trying to set myself up for my next job. I'm not, actually, this job seems like a perfect fit, but I could see how they could get that impression.

I appreciate any of your thoughts on this.

I'm sort of in a similar situation...I was going to hold out until annual review time (not too far off) and see what happens there. Seems like a decent idea to me v0v

# ¿ Sep 4, 2013 20:54

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# ¿ Apr 29, 2024 08:25

movax: Aug 30, 2008

ohgodwhat posted:

Did you start at the job already? I haven't, so I'd rather get it fixed before I actually start than wait.

Oh, I missed that part in your post, sorry. Yeah, I already started. In your case, I guess the tricky part is politely inquiring about that job title...if you're really unlucky, there might be all sorts of internal differences at the company in the titles (i.e. they can only hire x number of each, things like that). I'll leave it to someone better spoken/written to suggest how to do that.

# ¿ Sep 4, 2013 21:17

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > The Resume and Interview ULTRATHREAD: they saw Amazonian attributes