Executive compensation includes salary, bonus, and benefits such as stock options, free accommodation, transportation, reimbursement of children’s education, extra insurance, extra vacation, memberships, financial and legal counseling, golden parachutes or lump sum payments in the event of a layoff, and others. Negotiating executive compensation requires considering the range of such benefits offered. Consider the extent and range of benefits offered, and the long term value of such benefits.
At times, the nature of negotiation changes from the overall compensation figure to the type of benefit. Select the most useful and most relevant benefit. For instance, an employee with college going children would find benefits such as company reimbursement of education expense and free company transportation, allowing him to stay near the children’s college most valuable.
Consider the tax implications of the benefits. For instance, opting for 401(k) plan would save income tax, as would stock options. Such tax savings can serve as effective means to reduce cost-to-company without employees losing out in a big way.