My boss asked what number would keep me happy?

Question

I just got done with my 4 year performance review call with my boss (the CTO) where the review was extremely positive and my boss was fishing pretty hard for me to name a number on my target salary. They could not give raises this review period due to company performance, but are hoping to give them early next year.

At the end of the review, my boss asked what number would make me happy as "me leaving would be pretty hard on the company and also him personally (he's mentored me quite a bit) and if I'm considering looking to let him know".

I do have a number that would make me happy, but that number is about 1.75-2x what I'm currently making (I believe I'm underpaid for my current responsibility). However, I've been strongly considering trying to move towards consulting + pursuing a product business next year (with him as a part-time client) and I worry that naming a 2x number would cause animosity if he was not able to meet it.

Besides the money, I enjoy the work and my boss quite a bit, though also feel like I should get experience with different companies and industries (where I think consulting might be useful).

Do I have much to lose naming a 2x number?

Edit:

To add a little more nuance to the situation, the major perk that has kept me in this job so far is that he's allowed me to work remotely from Asia for the last couple of years and is very flexible with schedule.

The reason for the 2x number is due to the fact that my responsibility has increased significantly in the last ~8-9 months by moving into an architect role and overseeing the technical design of the majority of the company's projects. Before this transition, I feel like I was underpaid by ~20-30% compared to similar jobs in the region the business is located in (but the location flexibility has kept me), but after the dramatic increase in responsibility I see similar jobs in the region the business is located in going for 2x my current salary. (Note that I originally started working in the office in this region before moving to Asia).

I greatly appreciate all of the answers here and it has helped me take a step back and try to view the situation from multiple angles!

Answer 1

Although there may legitimately be things about your question that make it seem unique compared to other "how do I determine my salary" or "how should I ask for a raise" questions on here, the good news is, the answer is essentially always the same:

Salary should be based on the value you bring to the company.

It shouldn't really matter what you made last year, or what your friend makes, or what you got in a job offer. What matters is the value of your skills and the contributions you're able to make. So, rather than worrying about what multiplier you are applying to your current salary, base your ask on what you can show you are actually worth.

In your situation, where a boss is saying name your price! it may be tempting to put out an extra high number, simply on the hopes that you'll get it. But it's important to remember that being overpaid can be dangerous - guess who will have a target on their back if the company falls on hard times, or a change in management triggers a review of salaries and performance? The people who are overpaid. So, don't ask for a number you can't reasonably justify.

And if you are worried because you feel that you are legitimately worth more than your boss will be willing to pay, don't get hung up on it. That's simply a sign that you need to find a new job. Again though, be sure you can actually justify your number, because a worst case scenario is asking for a really high number, getting a "no" because your employer can't afford it, and then finding that no other employer can afford you, either.

And from a practical consideration, be ready to bring up the fact that you are currently underpaid and your employer is telling you they can't fix that right now. You may be willing to wait until next year on good faith, but this is also an opportunity for your employer to essentially take advantage of your good faith, so be ready to discuss potential non-monetary methods of compensation to close your current gap. Maybe they can grant you a few percent ownership, give you extra time off, or find some other creative way to compensate you besides salary. This may be a win-win where you can get compensated, and your employer can happily retain you while avoiding their apparent cash flow issues.

Answer 2

Do I have much to lose naming a 2x number?

Rather than worrying about whether the boss may be offended by your number I would worry about whether the company can ever pay you what you are worth. You already believe that you are underpaid and you mentioned that due to company performance there will be no raise this review period. What happens if the company continues to perform poorly? Even if your boss agrees to your number, if the company is not doing well you may never get that money.

Answer 3

There are lot of things that can soften the blow of naming a high number, but what does that matter? It would be all hypothetical and next year could come and go with no raises as well along with the year after that. In the end it will not matter what number you mentioned and if the CTO agreed or not.

IMO, you have to do what you can now to take advantage of the situation.

So I would go with something like this:

"I feel that I am well underpaid for my work and contribution, and you seem to be confirming this. The "no raises" this year is very disheartening, and that is what is making me unhappy. What can we do in the short term to change that? Four years is a very long time to be underpaid."

Then take it from there. Could you be paid a bonus this year? Could you go freelance with higher rates? Could there be other compensation that they could grant you like extra vacation time or remote work? I think that rather than you naming a number, you are better off getting your CTO to negotiate for you for a change that can occur now.

Even if you did mention a 2x number and he agreed happily, unless you have it in writing, the conversation and agreement will likely be forgotten in a very short time.

One of the untold stories of freelance work is slow or no paying clients. Are you prepared to deal with that? Be cautious and it is more likely from a client that is not profitable enough to pay their employees what they are worth.

Good work on being such a meaningful contributor.

Answer 4

I do have a number that would make me happy, but that number is about 1.75-2x what I'm currently making (I believe I'm underpaid for my current responsibility).
...
Besides the money, I enjoy the work and my boss quite a bit, though also feel like I should get experience with different companies and industries (where I think consulting might be useful).

Well, first, the term "happy" is maybe not the best one. What your manager is really wanting to know is how much they need to pay you for you to work there.

If I were a manager, and one of my direct reports were to claim that they're currently making half of what they would need to work there, I would find that a bit odd. After all, they are working there, so apparently the current amount is enough.

It would be one thing to say that you'd really like 20% more and would consider leaving if you don't get it, but to say that you suddenly need twice as much money would be bizarre. What changed?

If you really enjoy your work and like your boss, then it sounds like your job is quite a bit better than average, and you're willing to do your current job for X, but would need 2X to do an average job. In which case, you're trying to have it both ways by both having your current job and getting 2X.

If you truly would be not be willing to continue working for less than twice your current salary, then that's something your boss should know. Asking for a 100% raise would come across as rather presumptive, so you should phrase it to not make it seem like you expect that. Something along the lines of:

"Honestly, I've been looking at the marketplace, and I think I could get 70% to 100% more than I'm getting here. From my understanding of the situation, you wouldn't be able to get that for me, so I hope you understand that I'll be looking for other opportunities."

Do I have much to lose naming a 2x number?

You very well could be fired. If you really don't want to continue your job unless you get a 100% raise, however, then this is not a loss. If you DO consider getting fired a serious downside, then it's not quite accurate that you're not willing to work for less than twice as much.

Answer 5

First of all, you got an opportunity to quote a number, not everyone gets that. Also, just because you are asked to provide a number, it's not guaranteed you'll get that - there might be further negotiations.

TL;DR: Ask whatever you believe you're worth of, now.

If your boss knows your qualities and accomplishments, and appreciates that, even after the raise (uncut or negotiated), they'll be happy to have a positive working relationship with you.

Answer 6

I ask this question a lot lately.

Because I want to see where everyone wants to be and will then try to figure out a way on how to get them there. I don't want my team to be looking elsewhere for things we're likely to provide and I want to be honest with them on where they can get inside the company, given the current situation. So if they can't get what they want - I'll tell them - listen, right now I don't think we can provide this. But we can get you to A,B,C if you can handle X,Y,Z. Let's first get there and we'll see how we proceed after that.

Answer 7

If you think comparable roles to your current responsibility are currently paid ~2x, I would go with at least 2x, maybe even 2.5x. Or hey, if they desperately need you, and want to make sure you stay, then ask for a vesting equity package.

If the CTO says yes, awesome. If he says that they can't pay that much, then say you're open to other non-monetary benefits (flexibility, experience, mentoring and development, training, different hours, more holiday, you name it).

If he's openly saying you're an exceptional employee they don't want to lose and asking you to name a price, then you're in a strong position so you should make the most of it.

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Personal Anecdote:

I also went through the rapid personal development took me from mildly underpaid to severely underpaid situation. In my case I had to threaten to quit to force a re-basing of my compensation. I got a 100% raise, equity, and agreed path to a C-Suite position out of it.

Don't undersell yourself.

Answer 8

In short, yes. Your boss asked you what you need, to be happy in your position. Now your question is

Do I have much to lose naming a 2x number?

which the company is unlikely to be able to pay you. So you just told your boss that you're not happy in your position, and that it's not possible for him/her to make you happy in your position.

The only reasonable thing for your boss to do in such a situation is to hire somebody else - somebody who will be happy with a salary that the company is able to afford. By telling your boss that you're not happy (which seems to be a lie, given that you also said "... I enjoy the work and my boss quite a bit ...") you will effectively be asking to be fired.

Answer 9

"I do have a number in mind but I hesitated to answer before because I know the company is already having difficulties and my number is 1.75-2x my current salary. I like the work, and I like working with you. If this number seems impossible, what would you think about a consulting arrangement? It would let me keep working for you and also help me get a consulting business off the ground, which is a thing I have been thinking about doing to broaden my horizons."

This helps the negotiation from his perspective because it takes away the fear of your leaving being hard on the company--you're not proposing leaving, just a different arrangement. And there is also the possibility that he knows that you are way underpaid and already knows that's a reasonable number. So this way you keep the possibility on the table of him just saying "fine, I'll get this worked out" without it being a "gimme this huge raise or I walk!" thing.

Answer 10

"could not give raises [...] due to company performance" is perhaps the most commonly used bogus negotiation argument ever. you should dismiss those arguments and also promises for the future immediately (unless less they come in legally binding form)

Also, it has nothing to do with what "value" you bring to the company, as indicated elsewhere - how ever this may exactly be calculated.

The only thing that counts is, what you could make elsewhere!

Go on a little thought experiment with me. Let´s say your company would produce greeting cards and you where a renting him a printer. Let´s say your boss ran this business in a way that it did not cover it´s cost. Would you halve rates at a loss to yourself, to accommodate his problems? No, your boss would have to find a way to make this a viable business or your would just fetch the machine and rent it to someone else.

Similarly, you should absolutely get what market will pay for your time. Anything else makes you loose money (opportunity costs).

Now, we do not live in a world of perfect information, so its had to know both for your and your boss, what exactly the market will pay for you. Luckily, you can find out easy: Just send out some job applications and you will get some hard offers on the tabled that show you exactly how much you are loosing out on.

I trust your boss understands that mechanic very well. That means he says such things to low ball you, counting on your loyalty.

The other possibility is, he means what he says. That would be a warning sign. All the good people will leave the company because they get better offers elsewhere. What´s left will be some mediocre employees and a boss that does not understand basic economics.

If your boss really thinks your wages and thus the entrepreneurial risk should depend on how the company is doing, there is a easy way to do that: Give you the raise, but give it in equity. If you are OK with that - you should get a little extra for the risk you take on.

So to your question: No it would not be wrong to communicate your x2 number - if you are confident it is backed up by reality and you are prepared to take the consequences if your boss does not follow you.