Expensive SaaStr: As An Worker, As an acquired worker, How Do I Negotiate My Compensation in an Acquisition?
Sadly, as a non-CEO, non-founder of an acquired start-up … you’ve gotten nearly no capacity to essentially negotiate. Particularly under the VP degree.
General, your capacity to barter in M&A in any context, in any job, is predicated in your capacity to stroll for one thing higher, or simply stroll. Until you’re the CEO, you’ve gotten restricted choices right here. Most people, they are going to be OK in the event you stroll. Proper or unsuitable.
Acquirers will divide the workers into 4 teams:
- Group #1: Must maintain, individually. This can be a handful of key workers. They’ll probably get particular retention packages that stretch out over 2-3+ years. You’ll be able to ask for extra right here, however it’s arduous to do an excessive amount of right here. Most acquirers have a common algorithm with what they wish to do right here. The CEO of the goal can attempt to rejigger issues with the acquirer nonetheless. However the adjustments, if any, usually are not prone to be epic.
- Group #2: Must maintain as a bunch. Past the important thing workers, the acquirer could require 80-90% of a bunch to comply with employment contracts (e.g., all engineers). You’ll be able to say No. Which will offer you some leverage. Or you could simply say No, and lose your job. So long as the acquirer will get their 80-90%, that’s all they’ll care about. Not you individually.
- Group #3: Don’t care in the event that they keep. One other group the acquirer gained’t care a lot in the event that they keep or not. Non-critical product managers, buyer help and success, and so on. This varies by acquirer and kind of deal. They beautiful a lot by no means get any actually incentives to remain, possibly some customary inventory choices as new hires.
- Group #4: Don’t even need. Typically, G&A (finance, authorized, and so on.) and in some unhappy instances, gross sales and advertising and marketing — the acquirer doesn’t even need. They might not even be provided jobs; could also be provided short-term transition positions; or be saved on, however with a obscure standing (“You’re Now Reporting to Idaho”). You’ll be able to’t negotiate nothin’ a lot right here. Don’t count on something in any respect, sadly.
The fact the golden handcuffs, the large retention packages, and so on. — they solely go to a handful of oldsters.
And 98/100, the acquirer makes all the selections right here (and makes many errors due to it). As a result of it’s seen as their cash, as “further” compensation on prime of the deal worth.
Typically, you don’t even know what these packages can be till the deal closes, or simply earlier than. Oftentimes, your deal champion doesn’t even know. As a result of it’s usually not even actually as much as them.
A associated submit right here:
Expensive SaaStr: How Do I Do My Retention Negotiation in an Acquisition?