The Salary Negotiation: Knowing Your Worth

In Silicon Valley, everything is negotiable. If you don't ask, the answer is always "No."

The "Total Comp" (TC) Stack

When you get an offer, look at the whole picture:

• Base Salary: The guaranteed cash.
• Equity: RSUs (Restricted Stock Units) or Stock Options. This is your "piece of the pie."
• Sign-on Bonus: A one-time cash payment when you join.
• Performance Bonus: A yearly percentage based on goals.

Anchoring with Data

Don't pick a number out of thin air. Use sites like Levels.fyi or Glassdoor.

• "Based on market data for L5 engineers in San Francisco, the range for this role is..."
• "I've seen competing offers in the [X] to [Y] range."

Handling the "Low-ball"

If the offer is lower than you expected:

• "I'm really excited about the team and the mission. However, the base salary is a bit lower than I was expecting."
• "Is there any flexibility on the equity component?"
• "What levers do we have to get closer to [Number]?"

Key Vocabulary

• Vesting Schedule: The timeline for when you actually own your stock (usually 4 years).
• Cliff: The period (usually 1 year) before any of your stock vests.
• Strike Price: The price you pay to buy your options.
• Liquid: Stock that can be easily sold for cash (common in public companies like Google).

Alex's Tip: Never give your current salary or your "expected" number first. If they ask, say: "I'm more focused on finding the right fit, and I'm sure we can find a number that works for both of us once we get there."

Strengthen your BATNA before you negotiate. Line up another vendor, another buyer, another offer. Never negotiate with a weak BATNA if you can avoid it.

Distributive versus integrative

| Type | Metaphor | Goal | | ---------------- | ------------------- | ------------------------------ | | Distributive | Slicing a fixed pie | Win-lose (claim the most) | | Integrative | Expanding the pie | Win-win (create more for both) |

Distributive negotiation is haggling over a fixed amount, like price. Integrative negotiation finds trades where each side gives something cheap-to-them but valuable-to-the-other. Example: the buyer gets a lower price; the seller gets a longer contract (more valuable to the seller, cheap to the buyer). Both gain.

Aim for integrative deals. They build relationships and create more total value.

The language of principled negotiation

• Help me understand what's driving that.
• What are you trying to achieve?
• Let's look for a solution that works for both of us.
• What would a fair outcome look like to you?
• How can we create more value here?

These phrases signal collaboration, not combat. They open the space for integrative solutions.

Common mistakes

1. Arguing positions, not interests. Explore the why behind the what.
2. Weak BATNA. Strengthen your alternatives before negotiating.
3. Zero-sum thinking. Look for trades that expand the pie, not just claim it.

Practice

You are a vendor. A customer demands a 20% discount (position). List:

1. The likely interest behind it: _
2. Two creative options that meet the interest without a 20% price cut: _
3. Your BATNA: _

Example: Interest: stay within Q3 budget. Options: (A) keep price, extend payment over two quarters; (B) smaller scope at their budget. BATNA: we have two other customers ready to buy at full price.

In the next lesson, you will learn the language of concessions, how to give and get them.