- Balance willingness to compromise with the kind of tenacity private equity expects from its executives
- Enter negotiations equipped with an abundance of diligence and a firm grasp of the company's trajectory
- Know which component of compensation is most important to you and why
You’ve found an ideal C-suite role at a PE-backed company. How do you determine what your starting package should look like?
Few people relish compensation negotiations, but in the private equity world, handling a negotiation poorly can cost you millions. Coming into an offer situation knowing what you want and what you can actually expect is a powerful tool that requires preparation. Arriving with a set of solid expectations backed up by research and concrete examples will make navigating that journey easier.
The time you spend conducting diligence and researching the company is invaluable, not only to determine the company’s health, but also to support your reasoning for the compensation you are asking for. The more concrete calculations you can provide to support your reasoning, the more successful your negotiations will be.
The Importance of Negotiating
Even if your offer is satisfactory, willingness to negotiate shows the sponsor you’re serious.
“They always expect you to counter. Companies are looking to hire a tenacious executive that can negotiate for the company. If you don’t negotiate for yourself, then how will you ever negotiate for the organization?” says Nathan McBrayer, current CFO of PE-backed dermatology provider The Derm Group. “Show them your professionalism and ability to come to an agreement that is a win-win for everyone.”
While each firm is different, in many cases, potential sponsors will be disappointed rather than relieved if you choose not to engage in negotiations. The ability to advocate for a better deal, conduct thorough diligence, and make reasoned projections are all important skills sponsors want to know you can bring ...