How to select a good starting salary after working in a position I felt over-qualified for?

Question

When finishing up college a few years ago, I rushed into getting work as a contractor for a big tech company as a technician, a position that did not require a college degree to work at. I've worked at this position for 5 years with only a few small pay raises and have felt like I am rather over-qualified for the work here. However, I have worked beyond my job description and have become noticed by a number of people there. Because of this, I have received hints to apply and now have multiple job offers to work directly for this big tech company, both of which are a noticeable bump to my current pay level. One of those two offers, however, is a significant bump and a few grades higher than the other offer. Not only that, but they have spent extra effort to tailor the job description for me specifically. This puts me in a very good position, one I was not expecting to be in and I am not sure how to handle it.

They have asked me what I am expecting for salary, bonuses, and Reserved Stock Units (something I've never dealt with before). I am at a loss at how to pick the right values. I could take my last salary as a contractor and add 20%, but I've run the numbers that even that large bump yields a number below a salary I am aware of for someone else at that same pay grade. It also doesn't do anything to answer about bonuses and RSU's. I do not want to appear greedy, but I am also looking to come back with a proposal that fits the average level for this posting.

Answer 1

One of those two offers, however, is a significant bump and a few grades higher than the other offer. - They have asked me what I am expecting for salary, bonuses, and Reserved Stock Units (something I've never dealt with before). I am at a loss at how to pick the right values.

These statements are in a bit of conflict with each other. You know what the bump is yet they're asking you what you want? Why not take the offer as presented?

I do not want to appear greedy

Greed: "excessive, selfish, uncontrolled, or rapacious desire, especially for wealth or possessions."

Do you think that the company worries about "appearing greedy" when they set the prices for their goods or services? They don't.

Is your desire for an increase in salary excessive, selfish, uncontrolled, or rapacious? If not, then feeling greedy isn't a relevant emotion and you won't appear greedy by asking for what you want.

Ask for what you want and what you think is fair, appropriate, and equivalent to the new position. If it's not fair, appropriate, or equivalent to the new position they'll let you know.

Answer 2

The answer is: Do some research. You are not worth what you are worth. You are worth what the company would otherwise pay to replace you to do the same job that you would be doing. In other words, you are worth what someone else, doing the same job as you, is worth. So remove your current situation from the equation; the only question to ask and answer is: What would a reasonable request be for someone else to do this job?

For that, you can go online and do some research. Look at other companies with similar job descriptions and see what they're paying. If you have friends from college with similar jobs to this one, ask them what they're making, and so on.

That only addressed the "salary" part though, and not the "bonuses" or "reserved stock units".

Bonus: The thing about a bonus is that it's a bonus. It's not guaranteed, by definition, otherwise it would be called a "payment" and not a "bonus". So assume the bonus is going to be zero. You don't want to ask for a bonus, be told you can have it, and then bonus payment time comes around and the company is like "oops, we can't pay you this much". Instead, just add the bonus amount to your salary and have them pay you a higher salary, and tell them "just pay me whatever your standard bonus is"; it might be zero, and that's fine because you added the amount you actually want to your salary ask.

RSUs: If this company is not public, RSUs are worth literally zero because you cannot sell them. So the amount of RSUs you get is not actually relevant to you, because you can't actually do anything with them. The reason companies give employees RSUs is because the RSU benefits the company, not the employee; if a company is wildly successful and goes public, the employees get a share of that success, and that's why companies give RSUs. The RSUs are an incentive for the employee to work harder because the harder they work, the more successful the company will be, the more likely they are to get acquired or go public, the more money the employee will get in an IPO or M&A. So your answer, again, should be "give me whatever your standard RSU offering is", and maybe it's zero and that's ok, because RSUs are worth nothing anyway until the company goes public or is acquired.

In summary: Just give them a salary number, and make it competitive with the market rate for the position they are giving you and your skill set, regardless of how "greedy" it may feel. The fact of the matter is, someone is going to do this job, and someone is going to make the money for doing it; it may as well be you. For everything else, just tell them to give you whatever they are comfortable with and it doesn't matter to you.

Answer 3

I don't think this is something to worry or stress about. If you suggest something that is too high its unlikely they will take back the offer. They will just say that's not reasonable and likely tell you why - i.e standard is blah for this role. Equally if you undersell yourself you will be underpaid for a while and then once you have stronger CV can just move elsewhere or renegotiate. The biggest deal here is you convinced them to give you a chance and no matter what your next role will be easier to find. So congrats

Answer 4

My recommendation is that you try to find reputable salary and bonus information for your position in your city/metro area. Further, I would start by using the 75th percentile to evaluate your salary expectation (but be prepared to accept as low as the median, 50th percentile).

For example, in my industry, we would pay an IT Manager around $125k at the 50th percentile and $150k at the 75th percentile with a 15% bonus for both. (I'm assuming this is the level that you would be at after 5 years given you were headhunted, but I have no idea since you have not specified details.)

In terms of allocation to RSUs, use it as a point of negotiation. For example: $125k base, $25k RSU, 15% bonus.