Compensation Package Structuring

Most people treat a job offer like a take-it-or-leave-it proposition…Big mistake…👀 When a company extends an offer, they’re not just offering you money—they’re inviting you into a conversation. A negotiation. And how you handle that conversation can set the tone for your entire career there. Here’s the key: be curious, not combative. Questions to Ask After Receiving the Offer: To understand the offer: • “I really appreciate this offer—can you walk me through how you arrived at this number? It’ll help me better understand the framework.” • “What’s most important to the company in this compensation package—base salary, bonuses, equity, or benefits?” • “Are there opportunities to adjust parts of the package to better align with my contributions and market trends?” To uncover flexibility: • “If we were to explore adjustments, which areas would have the most flexibility?” • “How does this package compare to others for similar roles in the company?” • “What would it take to get closer to [specific figure or benefit] given the responsibilities we’ve discussed?” To gather more context: • “Does the team see this role as a critical growth driver? How can the compensation reflect that?” • “How does this package reflect the impact I’d be expected to deliver in the first 6-12 months?” • “What incentives are available for exceeding expectations in this role?” How to Propose Your Own Terms: Frame it as mutual problem-solving: • “I’d like to explore how we can adjust this package to better reflect the value I bring while aligning with your goals. Here’s what I had in mind…” • “Would it make sense to discuss a structure like [specific proposal] that better reflects the market for this role?” Anchor high with rationale: • “Based on my experience, the scope of this role, and market benchmarks, I was expecting something closer to [specific number or range]. How can we work together to close that gap?” • “For a role at this level with the impact we’ve discussed, I typically see packages in the range of [specific number or range]. Does that align with what’s possible here?” Be collaborative with priorities: • “I’m flexible on some elements of the package but prioritize [e.g., base salary or equity]. Could we explore adjustments in that area?” • “If adjusting the base salary isn’t possible, could we look at [specific alternatives like sign-on bonuses, stock options, or vacation time] instead?” Close with curiosity and an invitation to collaborate: • “How do you feel about this proposal? Is this something we could explore together?” • “What would you need from me to make this adjustment work on your end?” • “Are there other creative ways we can structure this to get closer to what I’m looking for?” The key is to make it clear you’re not demanding—you’re problem-solving together. This keeps the tone professional, collaborative, and respectful while ensuring you advocate for what you’re worth. #joboffer #negotiating #knowyourworth

You can't negotiate what you don't understand. Whether you're hiring or getting hired, these 12 compensation terms matter: 1. Total Compensation Everything an employee receives...salary, bonuses, equity, benefits, perks. This is what actually matters when comparing offers, not just the base number. 2. Base Salary Fixed pay for regular work hours. Excludes overtime, bonuses, and variable pay. The foundation everything else builds on. 3. Variable Pay Compensation that changes based on performance, sales targets, or company results. Commissions, bonuses, profit-sharing all fall here. 4. Benefits Package Non-wage compensation...health insurance, retirement plans, PTO. Often worth 20-30% of base salary but rarely calculated properly. 5. Salary Range The minimum and maximum pay for a specific role. Essential for internal equity and external competitiveness. 6. Cost of Living Adjustment (COLA) Wage increases to offset inflation and maintain purchasing power. Different from merit-based raises. 7. Deferred Compensation Pay earned now but received later. Retirement contributions, stock vesting schedules, sabbatical programs. 8. Equity Compensation Ownership stake through stock or stock options. Can be worth nothing or everything depending on company performance. 9. Performance-Based Pay Direct tie between individual or company results and compensation. Bonuses, profit-sharing, commission structures. 10. Paid Time Off (PTO) Bank of hours for vacation, personal days, sick leave. Can be accrued, front-loaded, or unlimited. 11. Fringe Benefits Perks beyond standard benefits...company cars, gym memberships, childcare assistance. Nice-to-haves that can influence decisions. 12. Compensation Benchmarking Comparing your pay rates to market standards. Critical for staying competitive and maintaining internal fairness. TAKEAWAY: Compensation is more complex than most people realize. Understanding these terms helps you design better packages, negotiate more effectively, and avoid costly mistakes. Whether you're hiring, being hired, or managing a team...this vocabulary matters.

Too many companies are still using one-size-fits-all compensation plans for sales reps. But this doesn't account for the fundamental differences in sales roles. An SDR cold calling potentially unqualified prospects requires a completely different compensation structure than someone handling warm inbound leads who've already expressed interest. With inbound leads from paid ads or organic content (where prospects are raising their hand saying "I'm interested") you don't necessarily need a big base salary. A modest base of $500-750 goes a long way, but the focus should be on their On-Target Earnings (OTE). But if you're asking someone to do cold outreach? That's a harder job with more rejection and fewer opportunities for commissions. Your compensation structure is a signal to your team about what you value and understand. When you design it thoughtfully based on the actual work being done, it shows you respect their challenges. The best commission structures account for: • Lead source quality (inbound vs. outbound) • Sales cycle length • Average deal size • Control the rep has over outcomes When these elements align, magic happens. Your team feels fairly compensated for the actual work they're doing, and they're motivated to perform at their best. What's your commission structure really telling your sales team?

Most people only negotiate CTC... and leave Lakhs on the table! When you hear "salary," what comes to mind? Basic. HRA. Maybe performance bonus? 85% of the clients who I meet, do NOT negotiate their salary components. Even more concerning, among those who negotiate, 71% focus exclusively on base salary. Why so? 1. Fear of appearing greedy – Especially prevalent among women and early-career professionals 2. Lack of market awareness – Not knowing what's standard vs. what's exceptional 3. Fixation on CTC number – Rather than understanding the complete compensation structure There are at least 7 other components from salary, that can massively boost your earnings if you know how to ask for them. Here’s a break-down of it: 1️⃣ Joining Bonus – Especially in mid-senior roles. Ask for it if you're leaving an unvested bonus behind. 2️⃣ Retention Bonus – If you're being hired into a volatile role, negotiate stability. 3️⃣ ESOPs / RSUs – Equity is wealth creation. Not every startup offers it upfront, but many have room to negotiate. 4️⃣ Gratuity, Leave Encashment, LTA – These can be structured well to give you more take-home & benefits. 5️⃣ Relocation Support – It's not just about travel tickets. Think: temporary accommodation, school fee support, relocation consultants. 6️⃣ Learning & Development Budget – Certifications, courses, executive programs. Most companies have a budget—they're just waiting to be asked! 7️⃣ Performance-Linked Variable Pay Structure – Understand what the KPIs are. Is it achievable? Can you get it guaranteed for the first year? Before accepting any offer, ask for a complete salary breakup. Then do a call (not just email) to clarify each head. You'll be surprised how much more you can get. Present it as value, not demand: → "The certification budget would allow me to bring cutting-edge skills directly into the role" → "Structuring more compensation as performance bonus aligns my rewards with delivering results" → "A relocation package ensures I can transition smoothly without productivity disruption" Don't just focus on CTC. Focus on real earnings + benefits. Are you just focusing on your base salary when negotiating? Follow Priya Narang Nagpal for more Career & Corporate training strategies! Repost 🔁 if found useful. #careergrowth  #jobsearch #corporatetrainer #softskills #resumewriter #interviewcoach #favikon #linkedin

When I hear a leader say, 'I want my team to take more ownership,' I look for misalignment in how total compensation is linked to company growth. 🔍 Exercise to Realign Your Total Compensation: 1. List and Map Compensation Elements: Start by mapping out each component of your total compensation. Use the matrix below to align each piece with both individual and company growth, in the short and long term. Include both variable and fixed elements. 2. Justify Each Component: For every item on your list, clarify why it's part of your compensation strategy. For example, why does your company offer profit-sharing bonuses? This helps ensure each component supports your overall objectives. 3. Draft or Update Your Compensation Policy: The explicit and specific document on how your company wants to balance revenue growth with team member growth and the unique talent required to achieve your specific core business objectives. The above exercise sets the foundation for your Compensation Policy, beginning with the crucial first pillar: 🧩 Compensation Matrix: Define the elements of compensation that will attract and motivate your team. Continue on to the other pillars of a Compensation Philosophy: 📐 Market Position: Identify the specific talent types (e.g., highly specialized, generalists) your business needs. 🌎 Location Strategy: Decide on the market data to use for setting pay percentiles. 💪 Performance Review Frequency: Determine how often performance evaluations and compensation adjustments should occur. 🪟 Transparency Level: Decide how much compensation data you will share with your team and why.

Negotiating the best package. When it comes to crunch time and you have an offer on the table, should you negotiate? How should you do it? Personally, if you are hiring salespeople, I believe you should expect some negotiating. In fact, it is ALMOST a red flag if they don't. But what does the perfect package look like? What levers can you pull to improve the overall package? Obviously, there's the base. Important! But you should also have your eyes on the OTE as that is a big portion of your earnings. Personally, I think the base is the toughest to negotiate on as it is a direct cost to the business, and increases their risk, and reduces yours. The company will be tougher to budge here, meaning the returns can diminish here. There are other creative ways to increase your base earnings: - Say you want a $10k bump on the base. If your role requires any travel. You could ask for a $6k car allowance. The $10k increase in the base would be taxed (40%) leaving you with $6k. The car allowance is tax-free. Same result for you, lower cost to the business. - Another way to increase your base is to ask for a review based on a set of metrics you achieve (in-writing). Ie. If I can achieve "X" in the first "Y" months I immediately qualify for "Z" increase in base pay. Again this reduces risk to the business but still allows you to get what you want. - You could also consider Equity in which you get a small dividend based on company performance or an ESOP that can increase your capital value with the company over time. When it comes to your OTE and comp plan that is where you can get the most value as an increase here means you are also doing well for the business. Here's some levers you can pull: - Increase the standard % - Negotiate a teired % structure - Negotiate a bonus for hitting 100% - Add in Accelerators and Kickers - Retained commission (eg. 1% of the lifetime revenue of a client) - Multi-year deal bonuses - Rolling quota (miss this qtr but can win back in the next) - Commission payout timing (monthly/quarterly/bi-annually) - SPIFs (Sales Performance Incentive Funds) The list goes on. As you can see there are much more levers to pull here and in most cases they benefit both you and the business simultaneously. Lastly, there are other factors you can negotiate on that can improve the overall package, that you can assign a $ value to: - WFH days. - Work location flexibility. - Tools of the trade (phone, laptop, office equipment) - Flexible working hours - Health benefits (gym membership) - Professional development (online courses, seminars, PD Budget) - Defined promotion pathway Again you can get very creative here. The key is to think of how you can position what you want in a way that they also get what they want. You will have much better results when you do this. That way everyone comes out feeling a winner and you start your new role feeling PUMPED, and so too will they as you have just shown them how you do business!

In my early years as CEO, structuring compensation was difficult for me. I never knew if we were doing it “right,” and eventually, I borrowed a structure from Meta that’s been working really well for us ever since. The foundation of our setup is our job leveling system, which outlines the basis of all roles and their associated compensation structures. We regularly align those structures with industry standards and competitor data, and our team members are then evaluated on where they fit within the preset compensation range. We also adjust annually for inflation, even when team members don’t qualify for a title promotion or performance-based raise. Where applicable, roles may also include opportunities for commissions and bonuses, but these are always contingent on meeting specific financial targets or criteria relevant to each role. We also do an annual review of these incentive structures to ensure consistency and fairness. Having these preset pay ranges has really helped us keep compensation balanced across the team, stay competitive in the industry, and give raises and promotions that feel data-driven rather than random. If your team handles compensation differently, I’d love to know what your structure looks like!

When designing sales compensation, it’s easy to default to standard benchmarks such as 3x Quota-to-OTE for SMB/PLG, 4x+ for Enterprise. But the real art is in aligning pay with influence. For 2026 planning👇 𝗛𝗲𝗿𝗲’𝘀 𝘄𝗵𝗮𝘁 𝗜 𝘀𝗲𝗲 𝘄𝗼𝗿𝗸 𝘄𝗲𝗹𝗹 𝗶𝗻 𝟮𝟬𝟮𝟱: 1️⃣ 𝗗𝗲𝗴𝗿𝗲𝗲 𝗼𝗳 𝗜𝗻𝗳𝗹𝘂𝗲𝗻𝗰𝗲 𝗗𝗿𝗶𝘃𝗲𝘀 𝗣𝗮𝘆 𝗠𝗶𝘅 Enterprise AEs with high impact on deals → 50/50 base-to-variable. They manage complex relationships and drive long-cycle, strategic deals. SMB / PLG reps with less influence → 60/40 or 70/30. Shorter cycles and smaller deals justify a higher base. 2️⃣ 𝗤𝘂𝗼𝘁𝗮-𝘁𝗼-𝗢𝗧𝗘 𝗠𝗮𝘁𝘁𝗲𝗿𝘀 Enterprise: 4x–5x (sometimes 6x) reflects complexity and strategic responsibility. SMB / PLG: ~3x aligns with higher deal volume and simpler sales motions. 3️⃣ 𝗧𝗵𝗲 𝗕𝗶𝗴𝗴𝗲𝗿 𝗣𝗶𝗰𝘁𝘂𝗿𝗲 A well-designed plan balances expected revenue generation with risk and influence, incentivizing reps to focus on the right behaviors, not just activity. ✅ For FY26: don’t just copy benchmarks. Think critically about how much impact your reps have on deals and structure comp accordingly. Degree of influence on a deal matters. ✅ Key questions: what behaviors are you trying to align the organization to adhere to? What outcomes? ✅ Partner with finance, #sales, #revenueoperations to holistically think through business strategy, implications on recruiting/retention, unit economics, and role design Good luck out there Go forth and operate 👋

Here’s how to think about structuring equity for your early team 👇 ➤ Co-founders If someone is truly co-founder level, don’t nickel-and-dime. Anything below 10%–30% range is insulting unless they joined way late. Red flag: “Founder” with 2%. That’s not a founder, that’s an early employee. ➤ Early employees (first 5–10 hires) Typical range: 0.25% to 2%, depending on role, risk they took, and how critical their skill is. Engineers building core tech? Higher. Ops hire after you’ve raised? Lower. ➤ Advisors Real, high-involvement advisors (hands-on intros, strategy, recruiting) get 0.25%–1%. Anyone asking for 2–5% to “advise” is freeloading. 𝐒𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐢𝐧𝐠 𝐫𝐮𝐥𝐞𝐬 𝐭𝐡𝐚𝐭 𝐦𝐚𝐭𝐭𝐞𝐫: → Always use vesting 4 years with 1-year cliff. If they leave in 6 months, they get 0. Don’t skip this. → Create an ESOP pool early Set aside 10–15% right after your first institutional raise. Smart investors expect this anyway. Better to budget than to scramble. → Don’t fear dilution 10% of a unicorn is worth far more than 100% of nothing. Equity is not charity; it’s the cheapest way to buy alignment and long-term commitment. → Cash + equity balance Early hires still have bills. Don’t underpay drastically. Offer “moderate salary + real equity” rather than just “lottery ticket equity”. → Communicate in $ value terms Instead of saying “you’ll get 0.5%”, say: “If this becomes a $500M company, that’s worth $2.5M.” Makes the upside real. 𝐑𝐞𝐦𝐞𝐦𝐛𝐞𝐫: → Equity is not just compensation. It’s belief currency. → Every early grant sets cultural precedent. → If you screw this up, you’ll either repel top talent or create resentment that no ESOP refresh can fix. 𝐅𝐨𝐮𝐧𝐝𝐞𝐫𝐬, 𝐭𝐡𝐢𝐧𝐤 𝐨𝐟 𝐞𝐚𝐫𝐥𝐲 𝐞𝐪𝐮𝐢𝐭𝐲 𝐚𝐬 𝐚 𝐝𝐞𝐬𝐢𝐠𝐧 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧. It decides whether your team plays as owners or just clock-punchers. ──── Want brutal clarity on your startup? Skip years of wasted effort and stop making expensive mistakes. Get direct advice on your deck, valuation, fundraising, GTM, or other challenges. Book a no-BS 1:1 call with me here: https://lnkd.in/gWV8DT56 💬 Drop your most burning question in the comments. ♻ Repost to help another founder avoid equity disasters. 🔔 Follow Anshuman Sinha for more Startup insights. #Startups #Entrepreneurship #VentureCapital #AngelInvesting #Management