You’ve had a small number of career-defining moments. These are the select few moments in time when the trajectory of your career changed instantly and drastically. I have two buckets of these: ones I expected and ones that completely blindsided me. While the surprise and subsequent scrambling involved in being blindsided are chock full of delicious adrenaline, I highly recommend the moments you can predict.

One such predictable moment is the first glimpse of the offer letter for your new gig. This is the culmination of hours of résumé tweaking, a series of phone screen gymnastics, and two grueling days of in-person interviews. This is a rare moment where you can answer the question, How much does the world think I’m worth?

Fact is, you should already know. You’re the business.

You Are the Business

Before I break down the offer and offer negotiation process, I want to reset your head. I’ve no clue how badly you need your next job, and the degree of your need will affect your negotiating position, but here’s some reality. You are the business. If you get an offer and take the gig, I think you should pour your heart into it, but I want you to remember that you’ll have 5 to 10 other jobs in your life, just like this next one. This means that for each moment you spend being pumped about the new gig, you’ll have an equal and opposite moment at the end of the gig where you can’t wait to get the next gig started.

Among these 5 to 10 jobs you’ll have, there is one constant: you. You’re the one who has to pay rent, ride the subway, buy a condo, get married, have some kids, and build your dream house. Your welfare is not your employer’s first priority. It takes one layoff to figure that out.

You are the business; the one consistent metric business is measured by is its growth. A new gig represents one of the few moments in your career when you can directly and forever change the trajectory of that growth. It’s backward to think of an offer as a true estimate of your worth; it’s one piece of data in a larger story that is your responsibility to define. Let’s do it.

Actual Earnings

The offer negotiation process has changed significantly in the last decade. In many US states, employers cannot ask about your current salary. If you volunteer this information, employers are not allowed to use this information in setting your offer.

You still have a chunk of work to do; you need to figure out what kind of offer you’d accept, starting with figuring out what you’re currently earning. Go ahead and say your current earnings out loud. I won’t tell.

What’d you say? $104K? How’d you arrive at that number? Oh, it’s your base salary. You actually earn just over $200K.

I’ll explain.

What Am I Earning?

Like frequent résumé updates, this career maintenance exercise is designed as a professional checkpoint that answers the simple question, How am I doing?

Let’s start by breaking down how I calculated what you are earning:

• Base salary: $104K
• Benefits: 30% of $104K = +$31K
• Bonus: +$10K
• Stock: +$60K
• Total: $205K

There are likely two surprises in this framework. First, if you haven’t worked for yourself, you probably haven’t considered benefits as part of your compensation. That 30% is an educated swag that most companies use to account for health and life insurance and 401(k). You spend much time ignoring this 30% because it involves retirement and health benefits, and you’re immortal. There will, however, be a time, probably sooner than you’d like when you fully appreciate this portion of your compensation.

The other area: stock. This $60K represents a total swag. Levels.fyi claims that stock grants range from $20K to $100K per year for your average engineer in the US. I combined the high and low and divided it in half. Do not confuse this sloppy math with the importance of your stock grants; they often have the most direct effect on your compensation. Much more on this later in this article.

Ok, grab a piece of paper and use this rough framework to figure out what you make. Don’t sweat perfection. You just need to be close.

The Swag

Fast forward. You’ve just finished the interviews. Traditionally in high tech, the recruiter is the last interview of the day, and their job is to get inside your head and take your temperature regarding the gig. The guiding rule here is: the more they know you want the gig, the less they need to offer you.
And they haven’t offered you a thing yet.

There’s a time and place for negotiation, and it’s not at the end of six hours of interviews on a Friday when you don’t even know if you’re getting an offer.

So, you wait. You send off a set of references, lie in bed replaying interviews in your head and send thank-you emails to the interview team. All professional karma-aligning activities, but what you really need to do is build your own offer letter. Like you built your compensation, I want you to build your offer.

Base Salary

The business model everyone loves is built on recurring revenue streams. This is why you can get a good smartphone for nothing. You’ll pay for that phone many times over with your monthly subscription of $39.95. You’re still happy paying that much a month because that feels like a deal, but carriers don’t see $39.95; they see the $1,500 you’ll spend over that three-year contract.

While it is often not the biggest potential impact on your salary, your base salary is your recurring revenue stream. It’s your financial lifeblood, and we want to get it as high as possible because getting them to add a 1% increase doesn’t affect this year; it affects every year after.

For the swag, you need to figure out what you want to be paid in the new gig, and my first question is, “For someone doing exactly the same job as you, how much are they being paid?”

When I originally wrote this article, I found the internet surprisingly useless in figuring out salary ranges. There are multiple relevant information sources these days, but even better, you can ask your potential future employer. Many states in the US have passed laws that require them to post job descriptions with salary range information.

Don’t get too excited. They are required to post ranges, which include what they pay an engineer in this role for 1 year or 10. Other companies have chosen to combine two jobs into a single role. The result is you’re going to discover absurdly large salary ranges.

I have three pieces of advice for your swag. First, talk to friends with similar jobs and figure out what they’re making. Salaries vary greatly depending on the industry, geographic location, and specific company, but after you’ve talked with a few folks, you will have a rough feel for the base salary. Second, ask the recruiter and confirm the salary range and see what else they can tell you about this range. Does it encompass multiple jobs? Or just one? What are the expectations regarding years of experience from the low range to the high? What is the company’s philosophy on promotion? How long are folks expected to perform well in a role before they are promoted?

Finally, if you don’t have a good signal, take your current salary and add 10%—that’s your very low signal salary swag.

Title

Titles, like salaries, vary from company to company, but what you’re looking for in a new job is a sign that you are growing. Associate software engineer now? OK, drop that associate title. Stuck as a software engineer for three years? I’d be looking for that senior prefix when I jumped ship.

Like salaries, the internal value of a title varies wildly by company. A director at a startup is an entirely different role at a public company. The good news is the legal requirement of published salary ranges has forced many companies to normalize jobs and titles, which means there are fewer aberrant jobs and job titles, which means senior engineer at Company X is likely a very similar position to a senior engineer at Company Y.

Your swag goal: What title do you believe needs to be added to your résumé for this new job to demonstrate that you’re actively growing in your career? You need to have a defensible opinion regarding why this is an appropriate title.

Sign-On Bonus

It’s difficult to swag a sign-on bonus because this type of incentive is often used to augment weak parts of an offer, and you don’t have an offer yet. If a recruiter knows you’re keen on stock and you’ll be disappointed with a lowball stock offer, they might dazzle you with a large sign-on bonus.

Pro tip: sign-on bonuses are one-time cash windfalls that may never appear again. For now, all you need to know is that they’re often a short-term Band-Aid, and the question will be: What are they hiding?

Stock

While representing the largest potential for financial gain, stock grants are also the hardest to swag. There are two likely initial scenarios here: public companies and startups. I’ll explain likely stock structures for each.

A public company is public, meaning anyone can buy and sell their stock. More importantly, you can do a deep dive into their financials. You can get a sense of how the company is performing, usually, by how their stock is performing. I like to look at the last five years. What’s the average stock price over that time? That’s a good swag price per share for your model.

As a full-time employee, you will likely receive a restricted stock unit (RSU) which vests over three or four years with a one-year cliff. This means your initial ⅓ or ¼ of your stock vests yearly, but you won’t be able to sell any for a year because of the cliff. After that, you are likely to vest quarterly.

RSUs replaced hard-to-understand stock options grants and are—important point here—just straight-up stock, usually with restrictions regarding voting rights and dividends. Unlike salary ranges, companies are under no legal obligation to tell you stock ranges for a role. Sure, ask. Know this: per-job ranges exist and are far more predictable for public companies versus startups.

Your potential stock situation at that startup is more complicated. First, they might use stock options versus RSUs. Smaller startups tend to offer stock options and then transition to RSUs as they prepare to go public or seek additional funding. Second, and more importantly, how do you evaluate the value of a startup? You can’t check the stock price. Yes, you can.

A public 409A valuation assesses the fair market value of a privately held company’s stock. A third party defines this price, and the asking price; “What’s your last 409A?” is a question you must ask because you need to place a value on the stock. Now, unlike publicly traded companies, the 409A is only done once a year or when there are significant changes to the business (funding events, strategy shifts, or other major changes to the business). In my experience inside these companies, the 409A is often a stale number that does not reflect current company reality, but it’s better than nothing.

Even with this information in hand, you don’t know one of the most important pieces of information. When is this startup going to go public so you can sell your shares? The IPO market is based on market conditions. After the dot-com boom, the IPO market cooled for two decades until 2021, when it exceeded the dot-com bubble. At the time of this writing, in 2023, the IPO market has again cooled significantly. When will it heat up again? If you find out, tell me.

For both public companies and startups, you are speculating about the stock, but I see no scenario where you don’t focus most of your attention on the size of your stock grant. Better said, why would you ever go to a company where you didn’t believe in the opportunity? In your growth? And the growth of the company?

Yes, any value you place on stock or options is speculation, but it should be informed speculation. Your value on the stock is one measure of your belief in the company.

Negotiating Roles

You’re done. Two phone screens, two rounds of interviews, reference checks, and much waiting have paid off. Before considering your offer, let’s determine who you will negotiate with.

In any reasonably sized organization, a strange switcheroo occurs when you start talking money. If you’ve reached the offer phase, it means you’ve likely professionally connected with your potential future manager. She’s sending you follow-up emails and generally paving the way for a clean transition to you joining the team. The moment you start talking compensation, she might vanish.

This far into the process, you’re probably pretty close with the recruiter. You’ve probably had a couple of professional heart-to-heart conversations and might be under the impression they’re representing your best interests.

Wrong.

The recruiter’s role in negotiation is the bad guy and deliverer of bad news. Recruiters are measured not only by the number of hires they make but how the compensation for those hires measures up to the rest of the company. Yes, recruiters want to make the hire, but they’re also driving toward internal corporate hiring standards that may or may not be aligned with your ideal offer letter.

Your future manager’s role is to make a great hire; the recruiter’s job is to make that hire and negotiate it so it’s fiscally responsible.

You need to be prepared to dig in your heels and fight for what you want. This may be uncomfortable and might involve tense moments with the recruiter, but if you’ve done your work above, you have the upper hand.

Offer Compromise

I’ve never received an initial offer that I loved. There has always been an aspect that has disappointed me. The stock is off, the title is unexpected, or the base salary isn’t that close. I’ve always needed to construct a counteroffer, and I’ve done it using facts.

As a hiring manager involved in many offer negotiations, the safest way to get me to ignore any counteroffer is to make it without data.

Recruiter: The candidate wants a higher base.

Me: Really? Why?

Recruiter: He just does.

Me: Grrrrrrr.

Negotiation is a discussion of facts. Any counteroffer must be constructed with data. “I want a 10% raise because, based on my research, that represents the average salary for this gig elsewhere in the industry.”

Sure, it’s still a swag, but your swag demonstrates a defensible opinion. In an interruption-driven industry full of bright people racing around yelling about the last interesting thing they heard, I’m a fan of research. It demonstrates that you are curious and care about your career, and that’s someone I want to work with.

As I don’t know your problem with your particular offer, I can’t advise what you need to say specifically, but here are some common frustrations and a plan of attack.

Lower base salary

If you’re staying in your industry and at an established company, I can’t see how a pay decrease is ever a positive sign. Yes, if you’re moving to a startup, you will trade your base salary for stock. You need to figure out if you’re cool with that.

You wanted a 10% increase, and they returned with 5%? Why? Sure, perhaps your 10% was a pie-in-the-sky swag, but how is the recruiter justifying this base salary? They’re probably saying something about comparable salaries across the company and how you’d make more than 90% of the people in your grade. That’s a warm fuzzy, but I call it shenanigans: you’re in the wrong grade. Push for a higher grade with more compensation headroom.

But it’s OK; here’s a bonus

If the recruiter is pitching this bonus as a fix for your low base, I call shenanigans again. A sign-on bonus, like a bonus plan, is a finicky thing that has a habit of vanishing. You can’t count on them. There’s nothing like an instant pile of money to distract you from the fact that, over the long term, you’re bringing less money home.

There are two questions you have to ask yourself: What are they covering up for with this sweet bonus, and how will you feel when that bonus money is gone?

Even better, here’s a pile of stock

How big of a pile? Your public company offer will likely come with justification for the grant amount, and you can plug that number plus your five-year average and get an idea of potential yearly returns. As I wrote above, you can ask and should receive a 409A number from the startup to place on a number on the private shares. You can also ask about the number of shares that are issued to get a sense of how big a slice of the pie they are offering.

Again, this is speculation. The amount of shares and their future value is a guess, but if you aren’t happy with the amount and place a high value on the stock, you can ask about trading base salary for stock.

And this is our final offer

If some part of the offer is below expectations and there’s absolutely no way to fix it, you have two options: walk away or find another way to ease the blow. We’ll talk about walking away in a moment, but have you considered the following to ease the blow?

• Asking for additional vacation hours right out of the gate?
• A start date a month later than they’re asking? There’s nothing like 30 days of work-free bliss to improve work-life balance.
• What their work-at-home policy is? Suggest an adaptation that better suits your particular work setup.
• My favorite move is to negotiate a six-month performance review. You know you rock, but they don’t yet.

Walk Away

The final strategy I suggest is one that you might think is hard, but if you’ve done your work, if you have a defensible opinion regarding both what you are worth and what you want out of your next role, this move is simple.

Walk away.

Please note: I didn’t write ghost them; I wrote walk away. If it is clear that this job offer does not meet your expectations, you do this: write to whoever your point of contact an email that says:

• Thank you.
• Clearly explains the aspects of the offer that do not meet your expectations and why. Note: if any of this context surprises the other party, you’ve missed a couple of key steps above.
• Thank you. Yes, again.

This email does not say anything suggesting that “If we can address this gap, I’m in.” While this may be an outcome of this step, it is not the content nor intent of this mail. You must be clear in your own head about why you are walking away and be 100% committed to doing so.

You are not buying a used car. This is your professional life.

I walked away from what became one of my favorite jobs—twice. The first time was early in the interview process when my spidey sense was tingling: “The job responsibilities aren’t right.” I told the recruiter briefly, said thank you, and said goodbye.

Recruiters as a species won’t take no for an answer. This recruiter quickly got on the phone, tap-danced his way into my head with promises of further conversations and other assurance, and did just enough thinking to convince me to continue. When offer time arrived, all of my responsibilities and cultural concerns remained, so I followed the process above. I sweated every single word of the email. There were very specific concerns I documented, and none of them—none of them—had anything to do with compensation. There were clear concerns about their interview process( and why it was a red flag for the culture) and there was a lack of definition of responsibilities. I included in my email why I believe these concerns would set me up for failure.

When I wrote “thank you” again and hit send, I was content. I believed in my choice and was ready to continue my search. Yes, I was eager to hear a response, but I was fine if the answer was “Thank you.”

The specificity and clarity of my concerns gave them a very obvious response framework. The fact that this was not the first time they’d read any of this information gave my response gravity. Yes, they did respond, and they responded thoughtfully, in person, over multiple conversations. We cleared the air long before it had a chance to become hazy.

And remember, my concerns had nothing to do with compensation.

My single worst gig was one where I got everything I wanted out of the offer letter. A raise, a promotion, ample stock, and a sweet sign-on bonus. In my exuberance for this compelling offer, I totally forgot that my gut read on the gig was “meh.”

Ninety days later, I couldn’t care less that I got a 15% raise and a sign-on bonus. I couldn’t stand the mundanity of the daily work, and I happily resigned a few months later, taking both a pay cut and returning my sign-on bonus for the opportunity to work at Netscape.

All of this important compensation strategy ignores a simple question you need to be able to confidently answer long before you decide on an offer: What do I love about this gig?

Better, Faster, and More

I want a better job. I want a role providing me with challenges I have not seen before. I want to work with a diverse and talented team that, by just existing, teaches me new ideas and makes me better. I want a better company that has figured itself out and is heading, no, charging toward building the next thing.

I want to move faster in my career. I have been doing the same thing for the last three years, and my career is decelerating because my daily learning is decreasing over time. I always have the next goal for my career, and I want to have a job accelerating me toward that goal by providing me with new opportunities with new humans on different products. The speed with which I’m heading toward the next goal should be… breathtaking.

I want more. More accountability means more potential for the products I’ll be building. More visibility into how the product is built and how the company is shaped to support building the product. More features that help more humans.

You will note that nothing I listed under my better, faster, and more job goals mentions compensation. This is not because compensation isn’t essential; it’s because the things that will matter most in your next job have little to do with how you are paid. We gravitate toward compensation as the measure for the next gig because it’s so wonderfully measurable and comparable. However, who you work with, how you build, and what you build are aspects of the job you should be assessing.

But how? There are no structured rubrics for evaluating and comparing people, processes, and products. This is why the best word in your response is feel. I know your feelings about the compensation, but how do you feel about the humans you will be working with? How do you feel about how they work together? How do you feel about what they build and where they are going?

Feelings are observations collected, compiled into opinions, and finally transformed into an emotion. I want you to feel your offer is fair, but I want you to feel this is a fantastic opportunity to grow.

For any new job, you should be able to quickly explain to anyone why the new job is more compelling than the last and why you will love it. Whether they believe you or not is irrelevant. You’ve got to believe it because you’re the business.