Total CompensationTHE SITUATION I' m considering a move from a senior level job in consulting to an in-house officer-level position with another organization, and I' m awaiting an offer. My current total cash compensation is made up of base and a 35% performance-based annual target bonus, which I have met or exceeded every year. As a result, bonus is currently a good portion of my cash compensation. The new role offers compensation primarily through base pay, but after 2 years, they offer the opportunity for a discretionary bonus (no set target). All other benefits are fairly comparable between the two companies. The organization is aware of my current compensation structure and that it differs from theirs. And I want to be fair in my evaluation of their upcoming offer. But since the cash compensation approach is very different at each organization, I' m unclear as to how to best evaluate their offer. MY QUESTION If I follow Paul B.' s 10%-15% increase advice, what factors do I use for comparison when considering their initial offer? For example: 1) Current Base to New Base only? 2) Current Base+Bonus to New Base? Any thoughts? Take the amount you would make at the new job (including any bonus you reasonably expect to make) and subtract from it the amount you make now (including any bonus you actually did make). Now take this difference and divide by the second number (what you make now). If the dividend is less than 0.1, the first number is not enough. You got it right in the title, the name of the game is total compensation. That might make a good Ahnold movie. It should be current base plus bonus compared to the new base. If your potential employer had a bonus structure from day 1, I would consider that in your calculations, but making you wait two years for a "discretionary" bonus rules that out. I agree. If it were me, I' d come up with an average annual total salary, base plus bonus figured as a single amount for the last two, or maybe three years at most. Obviously, you want the come up with an average that' s a true reflection of what you' re earning now. Once you have that amount, use the 10% to 15% increase to come up with your anticipated salary range for the new job. Make sense? Thanks to all for your quick and informative responses; your input will help me make a smart decision! What you shared makes a lot of sense, and seems like a really good "formula" for evaluating the offer in a clear and fair way. Thanks, again! | |
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