How to Negotiate Salary for New CTO Job

More money, less stress

Inkmi is a website for CTOs, VPs of Engineering, senior engineering leaders, and senior developers to find their CTO dream jobs. I am giving tips on salary, promotions and your CTO career on the Inkmi Blog.

You are getting a new job. Interviews went well, and now it’s time to negotiate your new salary.

As with all negotiations, you won’t get all the things you want. As with all negotiations, it’s best when you can walk away.

The best time to talk about salary (or anything else you want), is when they have fallen in love with you, cleaned their pipeline and just before you’re signing the contract. Right before signing, you hold the biggest lever in your hand. The moment you sign, you’re an employee like everyone else. Your leverage has gone down to zero. Getting things then is extremely hard. You want 20% more before signing, possible. You want 20% more after signing with your first pay raise? Impossible. At one point in my career, I demanded 50% more for a new job than my current salary. The company wiggled, but needed me as CTO, so they paid what I wanted. They have a problem they want to solve with you. Your salary might be a small price compared to the problem they want to solve.

They might ask you early on about your salary expectations. Whenever I interviewed someone, I did ask for salary expectations in the screening call. If I couldn’t match them (they exceeded my budget by more than 10%), there was no need to go into an extended interview process. If you are asked early on, make it clear you want to fit in, but see yourself on the upper range of their pay scale. If pressed, communicate a range depending on your country say “I’d be very happy for 200k, the bare minimum would be 150k”. Even when they ask, never talk about your old salary, except if it was exceptionally above market. Your old salary can only act as an anchor point, and then it’s very difficult to get more than 10% above your old salary. If you don’t mention your old salary, everything is possible. If pressed say with a smile: “I can’t say, I’ve signed a contract to not talk about it, and I’m sure I need to sign the same thing here”. Or say “this role and company is different, so I’m sure the salary from my old job isn’t too relevant.”

Demand more than you are comfortable with. That is the easiest way to get some thousands of dollars for free. Sure, there are heart-stopping minutes, but it is still the easiest way to make lots of money.

What if they reject your demanded salary? If they can’t go with your range, offer options. It’s always better to offer someone some options, “A, B or C,” where they choose one, instead of making it a “Yes/No” demand. Options could be binding the salary to milestones or deliverables:

• “When I get MVP out of the door, then we increase my salary to 150k”
• “When I get the website stable, then …”
• “When we integrate that key customer successfully, …”
• “When we’ll get a series A investment, …”

If that doesn’t work, go for bonus payments (20% of your salary, yearly), signup bonus (50k one time), equity (as a technical co-founder, always take 50%, if there are two people, don’t let you negotiate down to 10%, in later stage startups everything below 10% is nice for the exit but otherwise meaningless) or stock options (large company, usually easy to get).

If all of that doesn’t fly, think if you really want that job. Should you walk away from negotiations? If you want the job more than the money, at least try to get some hardware or other benefits. You might want a car, more holidays, every Friday off, a better computer for home, also a chair, microphone, camera and desk, bus/train tickets etc. Everything is possible. Benefits are often easier for companies to grant than more money - the money might disrupt their salary structure, benefits won’t. You can’t imagine what is possible. Once when signing a contract I felt jubilant, as I had negotiated lots of things into it. I later found out all board members had much more benefits in their contract, anything was possible. I felt foolish.

All things agreed need to be put into an appendix to the contract.

If it’s not written down, it doesn’t exist. Your next boss might not feel obligated to honor promises of a pay raise. If the company doesn’t lie to you, there should be no problem putting everything into the contract.

If nothing works, and this is important to you, walk away.

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