Finance Talk…Because We Need It

Hey friend! I’ve been doing a lot of thinking and listening to job seekers and I really feel like folks needs to be more equipped with tools on how to talk about compensation during an offer stage! These points below are from my financial advisor! I really want to help you feel comfortable talking about these topics! Tweet me if you like this information/found it helpful!

Understanding and knowing what to look for in your offer letter

• Base Salary/Bonus/Commission — what is it and how often are you paid i.e. bi monthly/monthly/weekly? Understand the terms of your bonus or commission. Will the bonus/commission be paid based on the companies’ performance or your individual performance
• Stock Options — options is an opportunity to buy at a set price (ideally substantially lower than market). Make sure the company has positive growth prospects. The last thing you need is to wait 3 years to vest and then your stock options are worth LESS than when you received them. You are taxed based off the profit.
• RSU’s — Restricted shares are given to you. These are taxed differently than options. You are taxed on all of it. Taxed as income. Have an understanding of what the restrictions are.
• Private Companies (Pre-IPO) — If a company is private they can still offer options or shares (equity) in the company. These shares won’t be worth anything unless the company is sold or actually goes public or takes on a series of funding.
• Vesting — refers to the period of time you will need to be employed before you have 100% ownership of your shares. Normally vesting is 3–5 years. If you have a three-year vesting period, your options will likely vest at a rate of 33% each year. If your employment is terminated before you reach your three-year anniversary, you might forfeit a portion of your options or potential earnings. Have an understanding of the vesting period. Whoever is hiring you should know about the vesting period so feel comfortable asking!

Key Take Aways

• Your current situation needs to drive your compensation decision e.g. you do NOT want to be starving now in hopes something might be. It’s better for you to earn now and then anything else is just a cherry on top.
• If you are receiving options be careful on growth prospects like I stated above. Is the business based off of one major entity? Few questions to ask: who is their target market, who is their largest customer base, are there any entities you are trying to capture market share. Best question to ask yourself is ‘do you want to own this company’ because that is what shares are.
• If you are leaving a company, look back at your current compensation package and make sure you aren’t leaving anything on the table. For example, your shares could vest in another quarter and that’s money off of the table.
• Know your entire compensation package i.e. Salary, Bonus, Stocks, 401k, PTO, HSA funding, Deferred Comp, Paid Cell Phone, Workout stipend, other perks

Advice from: Steve Alverson w/McCall & Associates

If you like these and feel your network could benefit from these, feel free to share my newsletter or invite folks to join!

I hope these bullet points made you think! If you need me, email me! taylor@vaco.com

Hot Jobs: I am also still looking for open source engineers of 3+ years of experience and up to $150k in salary. If this is you, let me know!! And I have had a few people ask me…yes I have a referral fee:)