Sales Secrets to Landing a Lucrative Compensation Plan | Devon Hennig | MSP #282

 

Are you ready to uncover the unexpected key to maximizing your sales compensation? Get ready to dive into a conversation that will transform the way you negotiate your compensation packages. You won't believe the game-changing strategies shared in this episode. Stay tuned to discover the secrets that will elevate your sales career to new heights.

If you're feeling frustrated by missed opportunities and leaving money on the table, then you are not alone!

Are you tired of negotiating compensation packages that don't reflect your true value and potential? It's time to enhance your negotiation skills and optimize your compensation packages to maximize your earnings. Let's dive in and unlock the secrets to getting the compensation you deserve.

This is Devon Hennig's story:

Devin Hennig, an experienced author, seasoned executive and negotiation expert, candidly shared his journey of learning about compensation through trial and error. As a former VP of marketing in various startups and public companies, he admitted to making costly mistakes in negotiating his own compensation, leaving substantial sums on the table. Drawing from his personal experiences, Devin recognized the common pitfalls that leaders encounter in negotiations, emphasizing the importance of understanding what, how, and why when it comes to compensation.

His refreshing approach, devoid of traditional HR perspectives, resonates with those seeking to navigate the complexities of compensation packages. Devin's journey serves as an inspiring reminder that even seasoned professionals have faced the challenges of underselling themselves and not fully comprehending the intricacies of negotiation. His down-to-earth storytelling and relatable experiences create an engaging narrative, offering valuable insights and a fresh perspective on optimizing compensation packages.

Severance is a protection piece, especially at a higher title and more senior roles. It's making things right. - Devon Hennig

My special guest is Devon Hennig

Devon Hennig, an accomplished author with eight books under his belt, including "The Senior Compensation Bible" and "How to Be a VP," brings a unique perspective to sales compensation negotiations. With a background as a VP of marketing at various startups and public companies, Devon learned from firsthand experiences, having left millions on the table due to negotiation mishaps. His approachable style and focus on helping others avoid similar pitfalls make him a valuable resource for understanding the intricacies of compensation packages and negotiation strategies. Devon's insights cater to both sales leaders and individual contributors, making him a relatable and trusted guide in the realm of optimizing compensation packages.

In this episode, you will be able to:

• Master the art of negotiating sales compensation packages to maximize your earnings.

• Unlock the potential of equity and stock options for startup employees to build your financial future.

• Learn how to maximize severance in executive roles, ensuring a safety net for your career.

• Craft a compelling career story in sales that captivates potential employers and clients alike.

• Discover strategies for long-term career growth in sales, paving the way for sustained success.

Key Moments:
00:00:00 - Intro 🎬
00:01:23 - Devon Hennig’s Background 📝
00:05:14 - Biggest Mistakes in Negotiating Compensation 💸
00:08:37 - Optimizing Compensation at Different Career Stages 🔄
00:11:30 - Components of Compensation Packages 📑
00:14:05 - Creative Bonuses and Milestone Payments 🏅
00:15:40 - Black Belt Negotiation Moves 🥋
00:17:12 - Commute Stipend Negotiation 🚗
00:19:25 - Justification of Small Incidental Requests 📋
00:25:00 - Balancing Requests and Order of Play ⚖️
00:27:32 - Understanding Equity Compensation at Startups 📈
00:29:55 - Evaluating Equity Offers 📊
00:35:09 - Long-Term Compensation and Vesting ⏳
00:39:08 - Exercise Windows and Negotiation 🏋️‍♂️
00:40:53 - Negotiating Equity Compensation 💼
00:41:57 - Negotiating Compensation and Equity in Startups 🚀
00:43:18 - Lessons Learned in Negotiating Compensation 🧠
00:44:17 - Importance of Severance in Negotiations 🛡️
00:49:23 - Equity Allocation and Long-Term Perspective in Startups 🌐
00:52:36 - Considerations for Startup Equity and Exit Plans 🚪
00:56:02 - Making a Tough Decision 🤔
00:57:29 - The Pitfalls of Job Hopping 🔄
00:59:07 - Building Your Career Story 📖
01:00:37 - The Value of a Positioning Statement 📍
01:02:43 - Outro 👋

Timestamped summary of this episode:
00:00:09 - Introducing Vengreso and FlyMSG
Mario Martinez Jr. introduces Vengreso as the creator of FlyMSG.io, a free personal writing assistant and text expander application. The podcast aims to help sales leaders, practitioners, and influencers grow their sales numbers at scale.

00:01:23 - Devin Hennig's Background
Devin Hennig, author of eight books, including the Senior Compensation Bible and How to be a VP, shares his background as a former VP of marketing and his journey to helping others negotiate their compensation packages.

00:05:14 - Biggest Mistakes in Negotiating Compensation
Devin discusses the three main mistakes sales leaders make in negotiating their compensation: not knowing what they can negotiate, lacking negotiation skills, and lacking the confidence to push back on offers.

00:08:37 - Optimizing Compensation at Different Career Stages
Devin advises younger professionals to optimize for cash and experiences, while emphasizing the importance of wins and exits. For older professionals, he recommends focusing on equity and larger lump sum cash opportunities for long-term wealth.

00:11:30 - Components of Compensation Packages
Devin highlights the main components of compensation packages, including base salary, bonuses, severance, equity, and other creative additional benefits, and discusses common mistakes in bonus structures, such as low bonus percentages and lack of accelerators or caps.

00:14:05 - Creative Bonuses and Milestone Payments
Devon discusses the importance of educating people about creative bonuses and milestone payments, especially as they move into leadership roles. He shares his experience negotiating milestone bonuses for a CRO at a young start-up.

00:15:40 - Black Belt Negotiation Moves
Mario asks Devon about "black belt negotiation moves" that most people don't know about. Devon mentions negotiating milestone payments and funding participation, as well as creative equity terms like double triggers and acceleration, all of which can add significant value to a job offer.

00:17:12 - Commute Stipend Negotiation
Mario shares his experience negotiating for a commute stipend, gas card, Bart pass, and a monthly food stipend as part of his compensation package. He emphasizes the importance of framing these requests in a way that adds value without coming across as greedy.

00:19:25 - Justification of Small Incidental Requests
Mario and Devon discuss the importance of justifying small incidental requests like gym memberships and commute stipends. They emphasize the value of these requests in improving the quality of life for employees and how to strategically negotiate for them.

00:25:00 - Balancing Requests and Order of Play
Devon advises on the order of play when negotiating compensation, emphasizing the importance of balancing requests and prioritizing high-value asks. He highlights the need to avoid overwhelming the employer with a long list of requests and to focus on the essentials.

00:27:32 - Understanding Equity Compensation at Startups
Devon explains the value of equity compensation for individuals at the startup phase. He emphasizes the importance of understanding stock options and the total shares outstanding of the company to calculate ownership percentage.

00:29:55 - Evaluating Equity Offers
Devon highlights the significance of knowing the number of stock options or rsus granted and the total shares outstanding to calculate ownership percentage. He advises individuals to compare their ownership percentage to benchmarks and make informed decisions.

00:35:09 - Long-Term Compensation and Vesting
Mario discusses the importance of understanding the vesting schedule and fair market value of stock options or rsus. He emphasizes that equity compensation is the long-tail, while cash compensation is the short-tail, and provides an example to illustrate the value calculation of stock options.

00:39:08 - Exercise Windows and Negotiation
Devon talks about the trend of longer exercise windows for stock options and the internal battle for employees when deciding to exercise options upon leaving a company. Mario highlights the non-negotiable nature of vesting periods and cliffs, with some flexibility for more senior individuals in negotiation.

00:40:53 - Negotiating Equity Compensation
Devon emphasizes the negotiation opportunities for senior individuals, such as acceleration, double triggers, clawback protection, and severance terms in equity compensation. Mario adds that bigger companies have less flexibility in negotiation due to existing equity compensation plans.

00:41:57 - Negotiating Compensation and Equity in Startups
Devon discusses the limited flexibility in negotiating fair market value, discounts, and vesting periods in early startups. However, custom plans may be negotiable for key talent in crucial areas.

00:43:18 - Lessons Learned in Negotiating Compensation
Devon admits to making mistakes early in his career due to lack of experience and knowledge on what could be negotiated and how to negotiate. He highlights the importance of understanding what can be negotiated, like severance and bonuses.

00:44:17 - Importance of Severance in Negotiations
Devon emphasizes the significance of negotiating severance, especially for executives, and advises on pre-negotiating a termination without cause clause and aiming for at least a three to six-month severance package.

00:49:23 - Equity Allocation and Long-Term Perspective in Startups
Mario Martinez Jr. shares his experience in building a startup, discussing the allocation of stock options for different roles in the company. He highlights the long tail game of equity and the need to commit to a three to five-year plan for potential success.

00:52:36 - Considerations for Startup Equity and Exit Plans
The conversation delves into the importance of understanding the exit plan of a startup before committing to equity. Mario emphasizes the need for a long-term perspective and commitment, while Devon shares his experience and insights on equity allocation.

00:56:02 - Making a Tough Decision
Devon discusses his experience of being on paternity leave and being offered a severance package. He shares how he was able to negotiate a year-long severance and stay home for eight months after his second son was born.

00:57:29 - The Pitfalls of Job Hopping
Mario and Devon delve into the topic of job hopping and its impact on equity vesting. They discuss the downsides of constantly changing jobs and emphasize the importance of building a strong career story.

00:59:07 - Building Your Career Story
Devon shares his personal experience of tracking accolades and achievements throughout his career. He emphasizes the importance of building a compelling story to showcase one's skills and achievements when transitioning to new roles.

01:00:37 - The Value of a Positioning Statement
Mario highlights the significance of creating a positioning statement to effectively communicate one's expertise and track record to potential employers. He emphasizes the importance of clearly articulating what one can offer to a new organization.

01:02:43 - How to Connect with Devon
Devon shares where the audience can connect with him, mentioning TikTok as his primary platform and offering his expertise in compensation consulting and negotiation. He encourages those interested to reach out to him on LinkedIn for assistance.

Harnessing Equity and Stock Options
Equity and stock options play a vital role in optimizing compensation packages, particularly in startup and tech companies. Calculating the value of equity based on shares granted and total shares outstanding is crucial for determining ownership percentage. Negotiating equity terms, such as vesting schedules and exercise periods, requires a strategic approach to maximize long-term financial benefits.

Mastering Sales Compensation Negotiation
Negotiating sales compensation packages requires mastering key components such as knowing what can be negotiated and how to negotiate effectively. Developing robust negotiation skills is crucial for individuals to overcome internal barriers and fears. Understanding the full range of negotiable elements in a compensation package is essential for maximizing earning potential and career growth.

Optimizing Severance Packages
Optimizing severance packages is critical for protecting against termination without cause and ensuring financial security during transitions. Pre-negotiating minimum severance terms, including prorated bonuses and continued equity vesting, can provide a safety net during job changes. Understanding the importance of severance negotiations aligns with strategic career planning and long-term financial stability.

The resources mentioned in this episode are:

• Connect with Devon on LinkedIn for compensation consulting and negotiation assistance.

• Visit https://devonhennig.com/ to access the Senior Compensation Bible for comprehensive guidance on cash comp, bonuses, equity, and perks.

• Download FlyMSG for free to save 20 hours or more in a month and increase productivity with a text expander and personal writing assistant.