4 Ways to Maximize Your Equity Compensation Package During Times of Transition

4 Ways to Maximize Your Equity Compensation Package During Times of Transition

September 16, 2017

hinking about making the jump to a new employer? Is your company being acquired or merging with another company? To help protect and maximize your equity compensation package, be sure to have a solid negotiating strategy in place.

In my experiences serving life sciences professionals, I have seen clients leave money on the table when they switched to a new job or their company experienced a merger or acquisition. Here are four ways to help you avoid this and negotiate a good deal:

1. Be prepared to negotiate. Stock options and restricted stock grants are most negotiable at the time of your hire. This is especially true if you are prepared to forfeit vested or unvested options and grants from your current employer.

2. Understand what’s best for you. Make sure you fully understand your current financial situation and your equity compensation package. This will enable you to determine whether stock options, restricted stock, or restricted stock units are best for your situation. And remember, the quantity and type of grants offered can be negotiated, depending on the hiring company’s plan documents.

3. Negotiate your severance package. If a merger or acquisition could have an adverse effect on your existing equity compensation package, consider asking for accelerated vesting of unvested positions or an extended vesting period during the time of termination or merger.

4. Set realistic expectations. If you’re moving to a new employer, remember that whatever package you negotiate will have to be approved by the hiring company. There are limitations based on each company’s plan documents.

Proactive planning can help you put a strategy in place to protect the equity compensation you have earned and maximize your future earnings. To succeed, however, you’ll need to do your homework in advance.