I'm surprised that they kept you on below market salaries after the acquisition. But I'm guessing that the bonuses more than made up for it?
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I'm more surprised folks fell for the "take it or leave it" gambit.
I agree. This sounds like tough talk. I can understand why they would say that but I can't undertand why anyone would believe it. What they are really saying is look, we wan't to roll you all up and it would be much easier for us if you weren't comparing notes with your buddies. Fine, I recognize that we as a group have collectively a stronger bargaining position than we would if you had approached just one of us. Use that to your individual (or even collective) advantage.
Hindsight, 20-20 and all that but the point stuck out for me.
Anyway, sounds like OP played the game the way he wanted so props for that. Something to think about next time someone claims something is "take it or leave it:" get up right away and leave it.
What's the third option?
(anon to protect the innocents)
I have been through the exact same scenario: acquisition, take it or leave it offer of employement to join the employer.
You know what? Go to your boss, in a non-confrontational way, tell them that you are underpaid, the market (meaning other companies) are making you offers left and right at much higher salary. It's not you who is greedy, it's the market telling you what you are worth. Then say you very much want to stay.
The deadline they give you about signing the original offer? Let it expire. Until you do that, they don't take you seriously. You're just a whiny engineer. Once their deadline is gone, see who calls first. They will call you in a panic and find out what it is you want (you already told them by the way). Then they'll move real fast to make a counter-offer that is at least half-decent. Done.
It's good if you also have an offer from a competitor. Then there's no theoretical game to play ("the market price is your highest offer, which is currently ours") and you win by doing nothing.
> The deadline they give you about signing the original offer? Let it expire. Until you do that, they don't take you seriously. You're just a whiny engineer. Once their deadline is gone, see who calls first.
This is the sound of me kicking myself.
Helps if you all do it together, eg, a union.
Some of us pride ourselves on not sinking to the lowest common denominator (i.e. breeding grounds for mediocrity).
I'd imagine that the power imbalance of corporation vs employee creates a "lowest common denominator" situation more often than corporation vs union.
I think I'm missing something. Why will they call you in a panic?
They just spent <insert large sum of money> to buy the company you work for. EVERY acquisition, at some level, is a talent acquisition. They're buying not just the IP, but the people who made that happen. They need to have everyone who knows how to contribute on board. There is no point in your career that you will have more leverage than on the day a company you work for is acquired.
Which is why they put out these silly "take it or leave it" offers. They're trying to pressure you into giving up that leverage. When you call their bluff, you'll find you have a really nice negotiating position.
There are exceptions of course. Failed company acquisitions for instance generally don't leave you a ton of negotiating room (although even then it's not zero).
So in short they're going to call in a panic because they need you much more than you need them.
Thanks for the detailed perspective. I've never been a part of an acquisition and I wasn't thinking about it that way.
It's not easy to replace talented people.
Negotiate. It's always an option in my experience. (For example, I've negotiated the text of offer letter and IP/confidentiality agreements at most of my employers).
Thats negotiation of terms, not the money.
I think that generally money is by far the easier thing to negotiate than terms. Even if just because a change of terms often needs to be approved by lawyers, whereas a change of $ amount can be approved directly by the parties doing the negotiation.
I think that generally money is by far the easier thing to negotiate
And here's something to back you up: http://www.reddit.com/r/TwoXChromosomes/comments/hvv2m/i_wor...
It is so fun to call someone's bluff like this. "The offer is fixed, take it or leave it." "OK, bye." "Waaaaiiiit, we didn't really mean it!"
I've only had the chance to do this once, with pretty small potatoes stuff, but damn if it wasn't absolutely delightful.
They probably didn't want them to stay around permanently, just long enough to complete knowledge transfer.
cognitively it probably makes more sense. ie Im on the same wage but i can brag Im getting $300k extra. If they offered them market rate and an extra $100k it wouldnt sound so great and wouldnt make as much blog traffic ;)
I wonder if there was some kind of accounting reason behind it as well.
Not sure if it's the case here, but in some sports (NFL iirc) players don't have guaranteed contracts. If a player makes no bonus but is supposed to earn $10 million a year, he gets nothing if he's cut. If he gets a $3,000,000 signing bonus and a $7,000,000 salary, he keeps the 3 because he got it up front.
I think salary is taxed at a higher rate than bonuses, which could be part of it.
Not true. http://www.thestreet.com/story/990258/1/when-the-tax-bullet-... (though you said the reverse). "It doesn't matter whether your salary is $90,000 and you get a $200,000 bonus or your salary is $290,000"
As mason55 said, a bonus will typically be reduced a lot when paid out (so that a $5k bonus ends up being more around $2.5k in your bank account), but in the end, when you do your tax return, you're taxed the same rate on your salary than on your bonuses.
Think about it this way: on your W-2, (assuming the US here) gross bonus and salary are not separated into two different categories. Thus, it can only be taxed at the same rate.
That being said, I'm surprised you'd say that salary is taxed higher… the typical misconception is to think that bonuses are taxed higher for the aforementioned reason.
Bonuses are generally withheld at a higher rate but in the end they're taxed as ordinary income.