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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!

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    Does this answer your question? How can I determine a reasonable salary to ask for? – gnat Dec 12 '19 at 13:14
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    They openly say they can't give any raises now (not even inflation) - how firmly do you believe they will be able to next year? Could they be sounding out who is cheapest to retain during a difficult time ahead? – Julia Hayward Dec 12 '19 at 18:25
  • How much are you making? Not in an amount, but in does x2 change your life significantly or would it only mean more play money? There's a point where salary becomes not the primary thing anymore, but interesting projects, good clients, an opportunity to advance your skills, etc. etc. are more dominant. Are you at that point or are you struggling to pay the bills? – Tom Dec 14 '19 at 7:47
  • Btw, maybe interesting related answer for you: workplace.stackexchange.com/questions/110472/… – Daniel Dec 15 '19 at 18:54

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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.

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    Comments are not for extended discussion; this conversation has been moved to chat. – Lilienthal Dec 13 '19 at 21:44
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    Down-voting because "value to the company" does not matter - the same as McDonalds won´t sell you a burger at half price, just because you already have a grill at home and you could easily make one yourself. – Daniel Dec 15 '19 at 18:45
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    Further this: if you bring a huge amount of value to a company, you are also bringing value to your collegues and to customers. – What's in a Google Search Dec 15 '19 at 19:49
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    I agree with the downvoter (@Daniel) - "value you bring to the company" is totally incorrect. The correct answer is instead that salary should be "what a person bringing the same value to the company is worth on the open market according to supply/demand". Why should a company pay you the "value you bring" when they can get that same value elsewhere for less? – Jon Bentley Dec 15 '19 at 21:07
  • Hi everyone - we've had this discussion a few times by now in comments, which have (legitimately) been moved to chat. I would suggest that if you want further discussion, we should take it up in chat. Or post your own answer. – dwizum Dec 16 '19 at 14:13
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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.

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    Agreed. I worked for 4 years at a company that, at hiring, promised big raises when it's software became popular and they started making big money. By the time I left, I was still drastically underpaid and didn't get even cost of living raises, even though the company boasted record sales the last 3 years. The last few months I was there included a massive turn in higher mgmt view of employees. I ended up finding a new job and in 18 months was making 2.5x my previous salary. YMMV, so something to think about. – computercarguy Dec 12 '19 at 22:09
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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.

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    Along with free-lancing, be sure your company doesn't have a "no competition" clause. If they do, you might be SOL or have to find creative ways around it. And if you decide to do work "on the side", as in while you're still working for this company, make sure your current employer doesn't have a policy against that as well. Even if they do have a policy, it might be specific, like a "no compete" clause, so doing something significantly different than what you currently do wouldn't matter, for instance. – computercarguy Dec 12 '19 at 21:59
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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.

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    I want to comment here that people who don't like the fact that there are some people who think this way (the way expressed in the answer) should not express that with downvotes. I don't like the attitude expressed here, but before we downvote this to oblivion we should ask ourselves whether it's reasonable to expect that someone with this question might be working for someone that feels this way. Keep in mind that some employers are likely going to take it as something of a personal attack that you claim they are paying you half of what you're worth, and some will think you are crazy. – msouth Dec 12 '19 at 23:08
  • @msouth The issue isn't taking it as a personal attack, or thinking you are crazy, and it's not about claiming that they're paying you half of what you're worth. It's about saying that you're not willing to work for less than twice the amount that you currently ARE working for. If someone has a problem with my answer, I'd like them to explain what it is. – Acccumulation Dec 12 '19 at 23:15
  • The whole first half of this answer just comes across as a rant against OP. There are a lot of different variables that go into happiness, what people will put up with and why. We don't know the details of the situation beyond that they are currently making X, and feel they should be making significantly more. If you want to clarify all those initial questions relating to your disbelief of the situation (and what the manager might already know about what OP has been putting up with) comment on the question might be better served. – Mr.Mindor Dec 12 '19 at 23:17
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    "You very well could be fired." OP hasn't provided a location. In some places, that would be illegal. – nick012000 Dec 13 '19 at 5:15
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    @msouth I don't know the manager won't think that way, and wasn't trying to suggest they won't. My issue with the answer was almost entirely with the attack-y tone, I commented because I felt that the valuable message (it could cost you your job because...) risked getting lost. It is somewhat better after the revisions, however I think your two sentence 'neutral' version does a much better job of portraying what is valuable here than the answer itself does. – Mr.Mindor Dec 13 '19 at 15:08
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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.

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    Exactly. If OP thinks he is worth 2.0x, he should ask for it. Better to ask high and settle for something lower, as long as you can back up your original claim. – vikingsteve Dec 13 '19 at 14:57
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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.

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    What would you do if someone said "My number is 2x my current salary"? (I'm asking because your response might be relevant to OP and useful for you to add to your answer). – msouth Dec 12 '19 at 22:52
  • Curiously, you could offer "we can get you to A,B,C if you can handle X,Y,Z" first and then find out if that is satisfactory to the employee. It is as fair for the employee to offer a number first as the employer to do so. If one side is asking for a number first most of the time - it a power ploy in the negotiation. – chux - Reinstate Monica Dec 14 '19 at 17:27
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    @msouth, they do say this every now and then. I try to be as honest as possible. If I see that even if the person can achieve the goals to get him to A,B,C, but the company could hardly provide the conditions - I say it. So they are aware that we may not be the company they need. But I also try to keep them until the point at which we are irrelevant as a company is reached. Like - let's get to A first and we'll see if we can proceed B and C. – Pavel Donchev Dec 15 '19 at 6:20
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    @chux-ReinstateMonica - this can't work for a few reasons. I like to think there are no limits. And if someone asks something that I see difficult - I find it as a challenge and often get excited. But I can't do it on my own. It is very important for everyone in our company to get as open as possible. The same way I try to be. So we can together get where more or less everyone wants to be. For me as a found - I can only look at financial results. Will this make everyone happy? I don't think so. There may be people that want to take it easy, so I need to reduce aggressiveness. And vice versa. – Pavel Donchev Dec 15 '19 at 6:24
  • @PavelDonchev Fair enough, so UV. Yet the "very important for everyone in our company to get as open as possible" still seems you oblige the employees open first (their salary goals), before you (the salary possibilities). – chux - Reinstate Monica Dec 15 '19 at 6:28
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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.


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.

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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.

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    The boss explicitly said, it would be hard for the company if he would leave. The company also believes he will do fine elsewhere, while the company would have a hard time filling the position. The company will not fire him, and it would not be a huge loss for him even if he would lose this job. – Andrei Dec 12 '19 at 23:49
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"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.

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  • "I want to start a consulting business" is "give me this or I walk". – nick012000 Dec 13 '19 at 5:16
  • @nick012000 Normally, "I walk" means two things--one, I'm no longer employed here, and two, you therefore can't get the benefit of any of my institutional knowledge or skills. Offering a consulting arrangement takes part two of that away and is therefore significantly different in both tone and content that "I walk". – msouth Dec 16 '19 at 7:13
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"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.

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    This seems to be the only answer understanding the harsher reality of dealing with "bosses" that are not willing to pay you market rates, but string you along as long as they can. +1 – Rui F Ribeiro Dec 15 '19 at 21:05

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