Negotiating Success: What To Learn From Marissa Mayer’s Compensation Package

You can’t have missed the news of Marissa Mayer, who recently landed the CEO job at Yahoo! with a five-year compensation package valued between $US71 and $US120 million. An impressive package, for sure — and one that has something to teach us all about negotiating career benefits, mining value from your current employment, and distinguishing between your “salary” and your “compensation”.

Although Mayer’s “salary” will be $US1 million a year, her total compensation package hovers somewhere between $US71 and $US120 million. Here’s how those figures break down: Over the next five years, Mayer will receive a $US1 million annual salary, $US2 million in target bonus compensation, $US14 in million stock grant (to make up for the Google benefits she’s leaving behind), a one-time $US30 million “retention award” that will vest gradually over the next five years, and an equity “award” worth an additional $US12 million in stock and options that will vest over the next three years.

OK, so that works for Marissa Mayer. But what about you?

What Do You Really Make Now?

If you’re about to make a lateral move, you should list and monetise everything your employer has to pay for in order to secure your services. You may not have stock options, but you probably get a yearly bonus, vacation time, possi bly life and disability insurance, free or low-cost parking, continuing education, professional fees and dues, subscriptions to professional journals, and the like. You may also get supplied with a vehicle, computer, phone or other equipment.

To escape the strong anchor of your current salary, estimate how much each of those benefits would cost if you had to obtain them in the local market. The final number you calculate will be your “total compensation package”. That is the figure to use when your prospective employer asks you what you’re making now. And the term to use is “my total compensation package” or simply “my compensation.”

When you’re asking for more money than you’re currently making, you’ll also want to take a look at what you’re leaving behind. You might, for example, be giving up retirement benefits that haven’t yet vested, earned vacation, or a year-end performance bonus. You’ll want to ask your new employer to compensate you for the benefits you’ll be leaving at your old firm by making the transition to your new one. In Mayer’s case, that accounted for $US14 million of her total compensation.

Negotiate For Power

Perhaps just as important as your total compensation are the intangible benefits you’ll receive when you take your new position. Those intangibles should include access to and opportunities to join teams or committees that wield real power. A word to the wise: That will typically not include the hiring or diversity committees, both of which can end up being more akin to social work than to business governance.

On the other hand, being appointed to management and finance committees will permit you to take part in making the firm a success. And in return for achieving that, most committee members are well-rewarded monetarily and given positions of even greater power and authority.

An equally important topic of discussion with your prospective employer is the access you’ll have to the firm’s clients, customers and other VIPs. When negotiating job benefits, it’s a good idea to ask not only to be introduced to clients and higher-ups, but to be present whenever strategic decisions in your department or division are made.

Finally, you will also want to make sure there are people within the firm who are both willing and able to sponsor your career — people who will speak up on your behalf, get you help and access to greater resources when you need them, and, eventually, give the all-important recommendation that you be promoted to the upper ranks of your firm.


If you focus only or even primarily on salary, you may well find that you’ve lost the opportunity to secure yourself a strong book of business, portable power, and the type of decision-making experience someone of your age and title should have.

So, look beyond the money. Ask yourself what you need to do to succeed. If you draw a blank, ask successful people in your field what they did to get there. Be alert to as many ways as possible to maximise your benefits, and negotiate with an eye for your own career advancement.

Negotiating Success: What to Learn From Marissa Mayer’s Compensation Package [The Daily Muse]

Victoria Pynchon is an attorney who practiced commercial litigation for 25 years. Since 2004, she has been mediating and arbitrating commercial disputes — the former with ADR Services, Inc. and the latter with the American Arbitration Association. In 2010, she co-founded She Negotiates Consulting and Training. She is the author of The Grownups’ ABCs of Conflict Resolution and Success as a Mediator for Dummies.

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