It is the start of a new year and, despite media reports to the contrary, there are opportunities out there. One question that we often get is “Should I take a lower salary for a great opportunity?” It might seem like a simple question with a simple answer, but the fact is that the answer varies based on a number of factors.
“Great opportunity” means many different things to different people. We always start by asking what “great opportunity” means to you. If great opportunity means a chance at more money, we need to make sure the money is there.
For some executives, a great opportunity is a chance to get C-suite experience. In those cases, we always want to know if the experience is really going to get them where they want to be. Taking a lower salary can sometimes reduce your apparent value. Of course, a lower salary with a well positioned and highly visible organization is more than likely going to add value to your career and resume.
Similarly, some executives are offered tremendous bonus opportunity in exchange for taking a reduced salary. However, most company bonus plans are discretionary. If you are willing to sign an employment agreement based on bonus potential, make sure that the opportunity is real before signing an employment agreement.
For other executives, equity is the great opportunity they are seeking. But not all equity grants are equal. An options grant is not going to have the same value as a share or unit grant (if we are comparing grants within the same company). Moreover, your employment agreement could make it nearly impossible for your equity grant to ever come to fruition. We have seen enough executives lose equity grants because they didn’t closely examine the terms of the grant at the start of employment.
The easiest answer to this question arises when “great opportunity” means a chance to pursue your dream and still be able to cover your family’s expenses. While we will still tell you to make sure the details are in clearly in writing, we will always support clients who want to pursue their dreams.