Are You Ready To Talk Money?
By Anne Fisher

(FORTUNE Magazine) – Money is funny. Our ideas about it tend to be fixed in amber at crucial points in our careers. That provides the comforting illusion of predictability. Example: For many years, until about 1990, a rule of thumb when changing jobs was that you expected a 10% salary premium merely for having the cojones to move from one company to another. Ha! Those were the days. Another example: For some wacky years after that, and we all know which years those were, you may have expected to be deluged with stock options just for showing up, before you (or, for that matter, your employer) had engaged in any activity that approached an actual profit. Ha-ha! And now? Well, goodbye to all that. If it's been a while since you were last in the market for a new job, then whatever you're assuming about pay negotiations is probably wrong.

"Executive pay has been in a state of constant flux," notes Umesh Ramakrishnan, a managing partner with recruiters Christian & Timbers (, who has sat in on countless compensation confabs between clients and candidates. "It went up so much and then took such a crash. Now, it's creeping up again." Curious about your worth on the open market? Don't rely on Internet surveys, he warns, because "with these variations over time, the data are not reliable." At lofty levels of public companies, of course, it's easy to find out what your peers are pulling down: Just look up the public documents at the SEC's EDGAR database ( At less-than-10-K-worthy heights, it's trickier. Ask around among recruiters, look for pay surveys in trade publications, check in with your university's alumni association, view salary ranges in job ads, and even try consulting your network. "For private companies, ask venture capitalists who are backing the business. They may not have the same vested interest in confidentiality as the company's human resources people do," Ramakrishnan adds. "You have to go in the back door. The more people in the industry you talk to, the better. It takes some digging. These are strange times."

Once you've figured out your going rate, what if an employer says it's too high? "Concentrate on the potential bonus," says Ramakrishnan. Too much emphasis on salary (guaranteed) vs. performance pay (iffy) marks you as risk-averse, exactly what companies now don't want--except, apparently, in some CEOs, whose pay will be stratospheric no matter what happens, but that's another story. "You can negotiate a bonus that is 100% of your salary, as long as you are confident you can prove yourself," he says. "But it is not 'Pay me and I'll show you.' It's 'Let me show you. Then pay me.'"

If you really want to wow your new bosses, offer to take 30% of your total compensation in salary and 70% in performance-based stock and bonus awards. "To safeguard you, ask for a guaranteed bonus for the first two years and get a severance deal in writing. A standard one now is a year's pay, including base and bonus," Ramakrishnan says. "If things don't work out, that makes the risk more or less equal on both sides." More or less.