Your salary may be the first thing you think of when negotiating your Employment Contract, but it should not be the only thing. All terms of your employment should be clear in the agreement. Some terms may be more industry specific (i.e. insurance requirements, hours, responsibilities), but others can be critical to your future security. The following five are applicable to every professional and/or executive:
- Incentive Compensation. Your ability to earn more than your salary depends on the clarity of the terms relating to bonuses, commissions, long-term incentive programs. Many professionals make the majority of their income through incentive compensation. Discretionary incentive programs are exactly that, discretionary. Instead, ask that your incentive compensation be guaranteed upon achievement of defined, achievable metrics.
- Fringe Benefits. Company benefits plans may change, but defined fringe benefits are an employer’s guarantee. If your position requires that you participate in industry organizations, or travel frequently, or anything else that costs money, request that those costs be paid for or reimbursed by your employer. Don’t wait until your agreement is signed to ask for additional benefits.
- Vacation. Employers typically have standard vacation policies. However, many executives are granted vacation days beyond the typical employee policy. If time off is important to you, get it in writing.
- Responsibilities and Authority. A job title means nothing if there is no substance behind the title. When taking on a role with some level of authority, you want the job description to be clear. If you have P&L responsibilities and/or hiring and firing authority, make sure your job description is clear.
- Severance. Negotiating severance on the way in is the best way of ensuring you have protection on the way out. Everyone is typically happier at the start of an employment relationship. And, employers might be more willing to provide you with greater protections during those negotiations than when you are fighting your way out.
Most importantly, even if your contract is really just a written offer of employment, keep in mind that the offer sets the terms and expectations for the future relationship. If something is important to you, ask for it. And, do it in a way that demonstrates a value to the organization.