Latest / Executive Careers with Fexingo: VP, C-Suite, and Senior Leadership Career Strategy / How Senior Leaders Use Counteroffers Strategically
Transcript
- Lucas: You get a great offer from a competitor. You weren't even looking, but the money is real, the title is better, the scope is bigger. You tell your current CEO, partly out of loyalty, partly to test your value. And then it happens: a counteroffer. Luna: And suddenly you're not the one driving the conversation anymore. Lucas: Exactly. Today I want to talk about counteroffers from the senior leader perspective, because the rules are different when you're a VP or above. A study from executive search firm DHR Global found that roughly 80 percent of executives who accept a counteroffer leave the company within 18 months anyway. Luna: Eighty percent. That's a staggering number. And I think the instinct is to say 'never take a counteroffer,' but that's too simple. Lucas: Way too simple. I've seen cases where a counteroffer actually worked, but they are the exception. Let me lay out the framework I use. Counteroffers are about leverage. If you have a genuine offer in hand, you have a data point about your market value. The question is whether you want to use that data point to renegotiate your current role — or to leave. Luna: And the risk is that once you signal you're a flight risk, the trust is gone. Lucas: Right. A former colleague of mine, we'll call her Sarah, was a VP of Product at a mid-cap SaaS company. She got an offer from a larger player: 30 percent more base, a VP title that was actually more senior than her current one, and a meaningful equity package. She went to her CEO, whom she'd worked with for five years, and said 'I have this offer, I'd love to stay but I need to see what you can do.' The CEO came back within 48 hours with a match on comp, a promotion to SVP, and a board observer seat. Luna: Wow. That's a serious counteroffer. Lucas: It is. And she took it. But here's what happened next. Six months later, the CEO brought in a new Chief Product Officer from outside. Sarah's role was effectively diminished. She was SVP but reporting to the new CPO instead of the CEO. Within a year, she was looking again. The counteroffer felt like a win in the moment, but it changed the relationship. Luna: So the trust was eroded even though the CEO made the offer. The CEO probably felt like he had to do it to keep her, but he also started planning for her departure. Lucas: Exactly. Search consultants often say that when a senior leader accepts a counteroffer, the employer starts a quiet succession plan. It's human nature. You're seen as someone who needs to be handcuffed to stay. And for executives, whose currency is trust and long-term commitment, that's a liability. Luna: But let's talk about the scenario where you're not planning to leave, but you want a raise or a promotion. Is it ever okay to use an offer as leverage without intending to accept it? Lucas: It's risky, but it can be done. The key is to have a real offer, not a fabricated one. And to be very clear about what you want. If you go to your boss and say 'I have this offer, but I want to stay — here's what it would take for me to stay,' you're negotiating in good faith. The danger is that you bluff and get called. Luna: Or that you get what you ask for but then your boss resents you for forcing their hand. Lucas: That's the second-order effect. So let me give you a specific framework. I think the smartest move, if you get an unsolicited offer and you're not actively looking, is to have a direct conversation with your current employer before you even respond to the offer. Say something like: 'I've been approached, and I want to be transparent. I'm happy here, but this offer makes me think about my career trajectory. Can we talk about my future here?' That way, you're not presenting an ultimatum. Luna: That's a much better framing. It invites a conversation rather than a confrontation. Lucas: And it gives your current employer a chance to address any underlying issues. Maybe they promote you without matching the offer. Maybe they give you a new project or a board seat. But if they don't, you have your answer. And you can accept the outside offer without having burned the bridge. Luna: So what about the numbers? When does a counteroffer actually make sense? Lucas: I think there are two scenarios. One: when the counteroffer addresses a structural issue, not just money. For example, if you were leaving because your role was too narrow, and the counteroffer expands your scope significantly — like Sarah got the SVP title and board seat — that's real. But even then, you have to assess whether the company is genuinely committed to the new structure or if it's a temporary fix. Luna: And the second scenario? Lucas: When you're close to a major milestone that you'd lose by leaving. Like a liquidity event. If you're at a private company and you have unvested options that could be worth millions in a near-term IPO, a counteroffer might be worth considering if it preserves or accelerates that equity. But you have to be realistic about the timeline. I've seen executives stay for a liquidity event that never happened. Luna: So it's a bet on the company's future rather than on your relationship. Lucas: Exactly. And that's a different kind of calculation. But for most senior leaders, the data is clear: accepting a counteroffer is a short-term win with long-term costs. A study by executive coaching firm Epiq found that executives who accept counteroffers are 50 percent more likely to be laid off within two years compared to those who left for the new role. Luna: Fifty percent. That's a huge gap. Lucas: It is. And it makes sense. The company is essentially paying a premium to keep someone who has demonstrated they're willing to leave. That premium creates an expectation of increased performance, and if you don't deliver, you're more expendable. Luna: You know, this reminds me of something I read about how top performers are often the ones who get counteroffers, but they're also the ones who are most likely to be targeted in the next round of cuts because they're expensive. Lucas: That's a real dynamic. So let me give listeners a practical checklist. If you get a counteroffer, ask yourself four questions. One: is this about money, or about something I can't get in my current role? Two: will the counteroffer change my relationship with my boss or the board? Three: what is the probability that the company will follow through on any promises made? And four: if I stay, what is my exit plan if things don't work out in 12 months? Luna: That fourth question is key. You should always have a plan B. Lucas: And if you can't honestly answer those questions, you probably shouldn't take the counteroffer. Now, let me also talk about how to handle the conversation with the company that made the offer. If you decide to stay, you need to call them and say no clearly and professionally. Don't leave the door open. Say 'I've decided to stay with my current company. I appreciate the offer, but it's not the right time for me to move.' And then don't re-engage unless you're serious. Luna: Because if you keep talking, you might burn that bridge too. Lucas: Exactly. You want to be someone who makes decisions cleanly. That reputation matters. I've seen senior leaders who negotiate with multiple offers and end up with no offer because they seem indecisive. Luna: So the takeaway is: treat a counteroffer as a signal, not a solution. Lucas: That's a great way to put it. A signal that the market values you, but also a signal that you need to think deeply about your career trajectory. The best time to negotiate your current role is when you don't have an offer. When you have an offer, you're already halfway out the door. Luna: And if we've helped you think through a career move like this one, we'd love your support. We keep this show completely ad-free, and that's a choice we make intentionally. If you find value in these conversations, you can buy us a coffee at buy me a coffee dot com slash fexingo. It helps us keep the lights on and the content independent. Lucas: Yeah, no ads, no sponsors, just real talk about executive careers. Your support makes that possible. So thank you to anyone who chips in. Luna: And if you'd rather share the show with a colleague, that helps too. Seriously. Lucas: Alright, back to counteroffers. One last point I want to make: the best defense against a counteroffer is to never need one. If you're regularly having career conversations with your boss, if you're getting market data on your compensation, if you're building your network so you always have options, then when an offer comes, you can evaluate it calmly. Luna: That's proactive career management. And it's what we talk about on this show every week. Lucas: Exactly. So next time you get a call from a recruiter, take it. You're not committing to anything. You're just gathering intelligence. And if that intelligence leads to an offer, you'll be ready to handle the counteroffer conversation with clarity. Luna: Any final thoughts on the topic? Lucas: Just this: the counteroffer is a trap disguised as a compliment. Your value is real, but the best way to realize it is to leave when you're ready, not to stay because you're flattered.