- Transparency between the recruiter and candidate creates vital alignment on expectations and priorities.
- Candidates who focus on the total compensation package as opposed to individual elements tend to achieve superior outcomes.
- Pursuing methods that "increase the pie" often lead to enhanced upside for the candidate and a healthier start to the executive-sponsor relationship.
Compensation negotiations represent the final hurdle in facilitating a high-impact addition to a portfolio company management team.
This delicate process demands vital collaboration and early alignment between sponsor and candidate.
Candidates who do not conduct extensive diligence tend to be ineffectual negotiators. Prior to the stage of an initial offer, discerning executives will have achieved clarity on the competitive landscape, the priorities of the sponsor, and the depth of challenge and risk associated with the opportunity.
While private equity professionals are often skilled and assertive negotiators, they tend to be fair-minded and expect candidates to negotiate within the spirit of the deal. In fact, an utter lack of negotiation may be considered a red flag; if a C-suite level recruit cannot effectively negotiate their own compensation, it is difficult to imagine they possess the skills required to deliver a compelling exit.
Transformative executives are often willing to assume an enormous amount of risk to bet on themselves, and funds want to maximize the value extracted from their acquired talent. Therefore, strong compensation packages tend to account for these dynamics by reinforcing the potential for mutual benefit.
Navigating the Dynamics of a Deal
Misinformed friends, colleagues or acquaintances often tell candidates what they should expect in a package. This can result in a damaging misalignment on expectations. Candidates should seek the counsel of their recruiter on these matters and trust their professional perspective and expertise.
Candidates who are disappointed with an offer...