Salary Evaluation David McMahon ’69 Associate Director Career Center, Texas A&M University

Types of Employees  Regular Full-time Part-time  Contingent Temporaries Contract Workers Consultants Co-ops/Interns

Compensation Package  Get the Offer in Writing  Then Evaluate Pay Benefits Intangibles

Types of Pay  Starting Salary Salary Hourly Commission Fee Signing Bonus Payout Schedule Stock  Career Salary COLA Increase Merit Increase vs. Merit Bonus Profit Sharing Stock Options

Benefits  Relocation Assistance  Insurance – Health, Life, Disability  Vacation and Holidays  Education Tuition Assistance  Expense Account, Company Vehicle  Professional Organization Memberships

Benefits  Savings & Retirement Pension Plan 401K Stock Options

Questions to ask employers about their 401(K)  Do you have one?  Do you have a pension plan also?  Do you contribute (match)? How much?  How long you have to work before you can participate?  What are the “vesting rights” ?  Do you have choices of investments? (Beware company stock only)?

Rule of 72 – 10% Age Invest Value 23 $5,000 $5,000 30$0 $10,039 37$0 $20,158 44$0 $40,477 51$0 $81,274 58$0 $163,193 65$0 $327,679 A 10% return on investment will double initial investment approximately every 7 years. Compound interest is added to the principle 12 times annually.

Rule of 72 – 7% Age Invest Value 23 $5,000 $5,000 30$0 $8,150 37$0 $13,284 44$0 $21,654 51$0 $35,295 58$0 $57,531 65$0 $93,775 A 7% return on investment will double initial investment approximately every 10 years. Compound interest is added to the principle 12 times annually.

Invest Early – Pay Yourself First $35,000 $160,000

Lifestyle Matters  A 45-year-old making $100,000 today plans to retire at age 65. Depending on his lifestyle in retirement, here’s how much he’ll need. % of Pre-retirement Nest egg Income desired necessary at In retirement retirement 60% $1.96 million 80% $2.61 million 100% $3.27 million  Assumptions: Life expectancy is 90 years, no pension or Social Security; annual salary increases and inflation average 3%.

Intangibles  Location  Industry Outlook  Promotion Opportunities  Responsibilities/Challenge  Travel  Life-Work Balance

Evaluate Two Entry-level Offers Company ACompany B Base Salary $30,000 Base Salary $35,000 Medical 0 Medical (840) Parking 0 Parking (912) 401(K) Match 1, (K) Match 0 (10% contribution, match first 5%) (10% contribution, no match) Perks 2,000 Perks 0 (car, tuition, etc.) Federal Taxes (7,290) Federal Taxes (8,505) (27% of taxable income) (27% of taxable income) State Taxes (2,002) (6% of taxable income) Actual Compensation $26,210 Actual Compensation $22,741

YOU employer $45K $42K $40K$35K Who’s Salary Range Are We Talking About?

The Six Secrets of Salary Negotiation  Never discuss salary until the end of the interviewing process, when they have definitely said they want you.  The purpose of salary negotiation is to uncover the most that an employer is willing to pay to get you.  During the salary discussion, try never to be the first one to mention a salary figure.  Before you go to the interview, do some careful research on typical salaries for your field and/or that organization.  Define a range that the employer has in mind, and then define an inter-related range for yourself.  Know how to bring the salary negotiation to a close. Don’t leave it “just hanging”.  Source: 2008 What Color is Your Parachute? Chapter 7 (p.115) by Richard N. Bolles

Points of Negotiation  Competing Offers  Salary Surveys/Information  Strong Relevant Experience (e.g. Co-op)  Extra-ordinary Skills (e.g. bilingual, technical, etc.)  Unusually high GPR  Cost of Living Adjustments  Consider a Signing Bonus  Supply/Demand

Salary Information  TAMU Salary Survey  NACE Salary Survey  Professional Associations  Cost of Living Index  Talk to People!

Key Link

Key Links

Multiple Interviews and Offers  Ask 1 st company for decision extension if you need one Reasonable time frame vs. your availability Was Company cooperative/understanding?  Inform 2 nd company that you have a decision deadline

Decision Time!!! Nice problem to have… Sometimes you just have to follow your gut feel…….. Neither one is a bad decision

Aggie Code of Honor  When you sign an employment contract with a firm it is exactly that, a contract.  Don’t accept an offer for employment unless you are serious about it and plan to work for them.  You should not be looking for other employment once you have signed that contract.  It’s OK to ask for a reasonable time extension to consider other jobs.  Reneging hurts not only you, but the reputation of all Aggies interviewing now and in the future.

Questions???