Structuring Compensation Packages for Attracting Executive Level Talent

You have finally identified the elusive, passive candidate who is a perfect fit for your hard-to-fill executive position.  The interviews have gone very well and there is strong mutual interest. So, what will it take to seal the deal? What components of a compensation package will be right for securing this top-tier candidate? As a business leader, you've realized that every hiring situation is unique. Based upon my experiences, here are a few suggestions to help you configure a competitive compensation package:  

  • Base Salary:  Most candidates, especially those already employed, will expect at least a 10% bump in base salary in order to make the move.  Furthermore, if the candidate views the new role as a promotion (Director to Vice President) the percentage bump will be much larger (more like 25-30%).


  • Bonus: Performance-based bonuses have become a larger share of total compensation and are usually tied to bottom-line results.  Consider implementing a quarterly bonus payout when the performance metrics have been achieved. This may be attractive to someone who is used to a traditional year-end bonus program.


  • Vacation / Paid Time Off (PTO):  Let's face it; no one wants to lose vacation or PTO.  If the candidate has earned three weeks of vacation to this point in their career, the expectation is at least that amount of time, sometimes the request is more.  You can't expect top talent to start over when they join your company, so be prepared to incorporate the same or a little more with your offer.


  • Relocation:  Companies are unlikely to get involved in real estate transactions; instead, many prefer offering a flat relocation stipend or a signing bonus that the candidate can use to cover moving expenses, temporary housing, etc.


  • Additional Perks:   Candidates typically inquire about 401-K match contributions, funds available for tuition reimbursement/professional development, short-term or long-term incentives (See the Houston Chronicle online for examples of long-term incentive plans), and the employee contribution for medical / dental benefits.  They want to understand the total compensation packages to see how it compares to their current benefits.

  When presenting the compensation package to your candidate, be sure to highlight the total compensation - include all medical / dental benefits, bonus potential, vacation time and the additional perks (Be sure to value perks separately: for example, if you provide a car loan at $500 / month, add a line item showing the $6,000 / year investment). Outlining all components of the plan will show that you value the individual and shows how the company will be investing in the person for the long-term. Since private company data is unavailable to most, we would like to hear from you. What other incentives have you considered for recruiting or hiring that C-suite level executive? You may not implement all of them, but having a list of potential benefits may help when it comes time to hire the next senior executive for your company.


Enter your email below to follow our blog:

Recent Posts