Latest / Executive Careers with Fexingo: VP, C-Suite, and Senior Leadership Career Strategy / How Senior Leaders Use a Compensation Scorecard Before Negotiating
Transcript
- Lucas: Most senior leaders walk into a compensation negotiation knowing exactly one number — their current base salary. And that single number becomes the anchor for the entire conversation. That's a mistake. Luna: Because base is only part of the picture, right? Especially at the C-suite level. Lucas: Exactly. Total executive compensation is a four-bucket system. Base salary is bucket one. Bucket two is short-term cash — typically an annual bonus tied to performance metrics. Bucket three is long-term equity — restricted stock units, stock options, performance shares. And bucket four is perquisites — everything from executive physicals to car allowances to club memberships. Luna: And most people obsess over bucket one, ignore bucket two and three, and don't even know bucket four exists. Lucas: Right. So the tool I want to talk about today is a compensation scorecard. It's a simple one-page document where you list all four buckets, assign your target value for each, and then compare it against what the company offers. You build this before you ever sit down at the table. Luna: And the weighting matters enormously. If you're joining a late-stage private company, the equity piece might dwarf everything else. But if you're moving into a public company with a mature comp structure, the bonus might be the lever. Lucas: Let me give you a concrete example. A friend of mine — let's call her Sarah — was negotiating a chief strategy officer role at a company that had raised a Series D. It was a fintech firm, roughly 800 employees, growing fast. The base they offered was $350,000. Sarah thought that was low — she was coming from a role where she made $400,000 base. Luna: So her instinct was to push for a $400,000 base. Lucas: Exactly. But I asked her to build a scorecard first. She estimated the equity value using the company's last round valuation — $2 billion — and the typical grant for a CSO at that stage, which is roughly 75 to 150 basis points of fully diluted shares. She landed on a grant worth about $3 million over four years, or $750,000 a year. Luna: So suddenly the equity was more than double the base. The base wasn't the story anymore. Lucas: That's the moment the scorecard changes your strategy. Sarah shifted from fighting for $50,000 more in base — which would have been a 14 percent increase — to protecting and maximizing the equity. She asked about the vesting schedule, the repurchase rights, the change-in-control provisions. Those details mattered way more than the base. Luna: And she ended up accepting the original base offer with a slightly better equity package. She told me later that without the scorecard, she would have walked away from a great opportunity over a relatively small base gap. Lucas: That's the power of the tool. Now, how do you actually benchmark these numbers? For base salary, you can use public data from the company's proxy statement if it's public, or from comparable public companies in the same industry and revenue range. For equity, you need to understand the company's stage — is it pre-revenue, growth stage, or mature? — and what typical grant sizes are. Luna: For private companies, you don't have a proxy. So what do you do? Lucas: You triangulate. Talk to recruiters who specialize in that industry. Look at compensation surveys from executive search firms. And ask the company directly — in a respectful way — for the valuation and the share count information. If they're serious about you, they'll share enough to let you estimate. If they won't, that's a red flag. Luna: So the scorecard also serves as a due diligence tool. It forces you to ask questions you might not otherwise think of. Lucas: Exactly. There's also a psychological benefit. When you have a scorecard, you're not reacting emotionally to a number. You're comparing a structured offer against a structured target. You can say, 'I see the total target is X, and I'd like to get to Y. Here's where I think we can bridge the gap.' That's a very different conversation from 'I need more money.' Luna: And it works for internal promotions too, not just external moves. I've used a scorecard when negotiating a promotion package. It helped me realize that the bonus target was way below market, even though the base was fine. Lucas: Great point. Internal negotiations are often more constrained, but the scorecard still gives you clarity. You might find that the base is locked by band, but the bonus target is flexible, or you can negotiate a one-time retention grant. Luna: Let's talk about bucket four — perquisites. What do senior leaders actually get? Lucas: It varies widely. At the VP level, you might get a car allowance and an executive physical. At the C-suite, you can see things like club memberships, financial planning services, legal fee reimbursement for contract review, and sometimes even a housing allowance if you're relocating. The key is to know what's typical for your level and industry, and to value those items in dollar terms on your scorecard. Luna: Because a country club membership might be worth $15,000 a year, but if you don't golf, it's zero to you. The scorecard should reflect your personal utility, not the company's cost. Lucas: Exactly right. Now I want to talk about one more thing: the 'deal-breaker gap.' When you build your scorecard, you should mark which elements are non-negotiable. For some people, it's the base because they have fixed expenses. For others, it's the equity because they're betting on the company's growth. If the offer falls short on a deal-breaker, you know walking away might be the right call. Luna: And you want to know that before you're in the room, not when you're under pressure. Lucas: Precisely. A scorecard turns negotiation from a reactive sport into a strategic one. You're not just responding to their offer — you're guiding the conversation toward a structure that works for you. Luna: I want to pause here because I think this is one of those episodes where listeners might actually print out the scorecard template and use it. And honestly, that's why we do this show. Lucas: Yeah, I agree. If today was genuinely useful to you — if you can see yourself building a scorecard before your next negotiation — then the way we keep these episodes ad-free and focused is through listener support. It's buy me a coffee dot com slash fexingo. That's it. No tier rewards, no merch. Just a way for people who find value here to help us keep doing it. Luna: And we really appreciate it. Now, back to the scorecard — what about the timing? When do you actually build it? Lucas: Build it as soon as you know the role is a serious possibility. Ideally, before the first interview. That way you're calibrating your questions during the process, not just at the offer stage. You can ask about equity philosophy, bonus structure, and typical grant sizes during the interview — and that information feeds directly into your scorecard. Luna: So by the time the offer comes, you've already done the homework. You're not scrambling. Lucas: Right. Let me give you a final example from my own career. When I moved from a director role to a VP role at a public company, I built a scorecard and discovered that the bonus target at the VP level was 40 percent of base, versus 20 percent at the director level. That made the base negotiation less important — the real leverage was in the bonus structure. I ended up negotiating a higher bonus target rather than a higher base, because the scorecard showed me that was where the value was. Luna: And you wouldn't have seen that if you were just looking at base. Lucas: Exactly. So my challenge to listeners: before your next compensation conversation — whether it's a new offer, a promotion, or an annual review — build a scorecard. List the four buckets. Put your target numbers in. Then compare. You'll be amazed at how much clearer your priorities become. Luna: And if you do that, you'll never negotiate the same way again. Lucas: That's the goal. Thanks for listening — we'll be back next week with another strategy you can use the same day.