Your Secret Negotiation Weapon

Written by: Jillian Climie

Compensation negotiations can go in many directions. Sometimes they’re complex and stretch over weeks or even months. Other times, they end with a simple, on-the-spot “yes”. Through all these scenarios, there’s one tool I always like my clients to keep in their back pocket, a secret weapon that can make a big difference when it feels like there’s nothing left to negotiate.

What is it? A sign-on award.

It may not sound exciting, but it’s one of the most effective ways to strengthen an offer when the company seems at its limit. There are several situations where a sign-on award can be especially powerful. Here are my top three.

#1: When You’re Walking Away From Something

This is one of the most straightforward cases for a sign-on award.

Imagine you’re leaving a company and walking away from a $10,000 bonus that would have paid out in two months. Why should you take that loss when you’re moving for a new opportunity? This is an easy, straightforward rationale to ask your new employer to match that amount through a sign-on award.

Another common example is unvested equity. If you’re leaving behind stock options or restricted stock units (RSUs) or other forms of equity that would have vested in the coming years, you can make a strong case for a sign-on grant to offset what you’re forfeiting. The nuances of this one can be a little more complex. How many years of equity vesting should a company cover? Should it be given in cash or new company equity? These details can all be determined through straightforward calculations. (If you’d like support with this, reach out to The Thoughtful Co here.)

#2: When Your Salary Request Isn’t Met

Sometimes you push for a higher salary, but the company just won’t move. Maybe they’re capped by internal pay ranges or budget constraints. If that happens, ask for a sign-on cash award to bridge the gap.

While it’s not as valuable as a permanent salary increase (which compounds over time and can influence bonuses), a sign-on award can help you feel properly compensated in your first year, and you can always revisit salary once you’ve proven your impact in the role.

#3: When You Want Ownership

Another situation when it’s important to consider a sign-on award: when you’re joining a company where you want share ownership to be able to participate in its long-term success. Maybe it’s a start-up you believe in, and negotiating for a one-time stock option grant could end up making you thousands (or millions!) down the road. Or maybe it’s a larger, established company, where equity compensation wasn’t part of the annual package but it likely should have been. Push for a one-time grant to ensure you’re able to participate in the upside.

Framing matters here. Negotiating sign-on equity is a positive story. You’re saying you believe in the company, plan to stay long term, and want to be aligned with its success.

A Few Things to Watch Out For

• Repayment periods: Some companies require you to repay the bonus if you leave within a certain timeframe (often one or two years). Make sure the repayment period aligns with what you’d be leaving behind at your old company, and feels fair. Know these periods can be negotiable.

• Company policy: Some companies do not grant sign-on awards as a policy. That’s okay, it’s still worth it to ask!

• Budgets: Sign-on awards are often budgeted for differently than annual compensation packages since they are just one-time grants. Because of this, they sometimes can be much easier to negotiate.

• Timing of payment: Make sure the contract states when you’ll receive the award. If it’s a sign-on award, it should be soon after you start.

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A sign-on award can be a powerful lever when negotiating your offer, whether to replace value you’re leaving behind, bridge a salary gap, or gain meaningful ownership in your new company.

Want more tools and strategies to strengthen your compensation negotiations? Book an introductory call with The Thoughtful Co here.