How to Successfully Negotiate Compensation for a New Job
Congratulations! You just got a job offer! Now you await the written offer that will tell you more of the details.

Your ability to successfully negotiate your total compensation is a key to your happiness on the job, your job satisfaction and your job performance. If you are not happy with any aspect of your compensation, you may not be motivated to perform to your ability. And when it comes to job compensation, salary is just the part of the entire compensation package that should be reviewed before you accept the position.


Salary is defined here as the base salary. With many positions, negotiation is expected. Remember that part of an executive’s skill set is the ability to negotiate effectively. This is an opportunity to showcase your negotiation skills, and is indicative of how you will negotiate on the job.

Sometimes clients contact me after they have accepted a job offer, before we review the terms of their employment agreement. Recently I had a client accept a position that did not fit with his goals because he was anxious to get back to work after being laid off. The company originally told him that they could not offer him any more than the mediocre salary in his offer letter. After starting the job, he learned the job took him even further from his goals and skill set than he originally thought. It wasn’t until he resigned that they offered him an additional $25K more to stay.

If you are not happy with your starting salary, and they say they cannot offer you more, you can request a salary review in three or six months. But make sure this is included in your final offer letter.


Some sales jobs are 100% commission jobs, while others may offer a small base with the bulk of compensation earned through commissions for the sale of products or services. If the major part of your compensation is commissions, be clear about the length of the typical sales cycle, any problems with the product or services, and the recent history of assigned quotas. Also important is information regarding the size and previous performance in your sales territory.


Many jobs today offer bonuses as part of cash compensation. For some sales and executive jobs, the bonuses can actually equal or exceed the base salary. If your new job includes a bonus as part of your total compensation, be clear on the following:

  1. What is it based on? Is it based on your performance, the department or division performance, the company performance, or all three?

  2. How will your performance for the bonus be evaluated?

  3. What is the history that this bonus or bonuses have been paid by the company?

  4. When are bonuses paid out?
Sign on Bonus

These are less likely to be negotiated, unless the base salary they offer is less than your current salary.

Health Insurance, Retirement and other Benefits

Since health costs today are rising, you want to review the health insurance plan for out of pocket costs to you, and the limits of the plan. If your spouse has a good health insurance plan through his or her workplace, this may not be as important. Disability insurance, life insurance, and long term care insurance are also frequently offered at the large companies. You also want information on the company 401K or other retirement or pension plan. You want to know about company contributions, your investment options and when you are you vested in the plan.

Stock Options

The size of the company, how soon the options are vested and how well the company is performing all help to determine the worth of the options. If the company is performing poorly, the options may be worthless.

Relocation Costs

If you are given a lump sum to use for relocation, you may be taxed for that amount. However, if the company uses a relocation company, you may not be taxed. If is best to check with your accountant about how any relocation benefits will be taxed.

I advise people relocating to request that they are provided with six months severance and relocation reimbursement back to their previous place of residence if they are let go for any non- performance related reason within one year. This happened a few years ago with a client. He moved his family out of their home city, and in six months the company reorganized. He was offered a different job in still another city, but elected to take the severance and move his family home. It is also important to remember that many states are “right to work” states that allow an employer to fire an employee without cause.

Vacation Time

Some companies today offer personal and vacation time off, as well as sick time and holidays. There is a trend to combine vacation and personal time, which can include sick time. Perhaps your salary and benefits are good, but the company only offers two weeks vacation for the first year of employment. You can negotiate more time off, with or without pay if having more time off is important to you.


If there is something about the compensation package that bothers you before you start the job, it will bother you even more after you start working with the company. This is because many people, by nature, tend to focus on what they don’t have instead of what they do have. Also, many people are not clear about the things that are important to them, and what are “deal breakers.” It is important that you are completely happy with the job and compensation to start with a positive attitude. Remember to accept a job only after you review and negotiate the written offer, and resign from your current job only after you review, negotiate and accept the written offer.