As executive search professionals, we regularly discuss remuneration with candidates and clients. A standard package for a head of IR will generally include basic salary, target bonus, pension contribution, private healthcare, holiday (typically 25 days, dependent on location) and a three-month notice period. A car allowance may also feature, but is essentially an addition to basic salary. Deferred compensation in the form of long-term incentives and stock options are further expected at the senior manager and team leader levels.
The value of all the above elements varies significantly from company to company. The following are important determining factors:
- Industry sector – for example, financial services and oil & gas tend to be well-paid sectors
- Company market cap – as a general rule, the bigger the company, the fuller the schedule for investor relations will be, involving greater external scrutiny and more internal and external stakeholder relationships to manage
- Additional functional responsibility – an investor relations role that also encompasses one of corporate finance, strategy, M&A or communications
- Team size – bigger teams mean more man-power support and also suggest a high-level seniority and responsibility
- IPO context – either a fixed-term contract to manage investor relations before and immediately after the IPO, or meaningful stock participation so that the IR professional benefits from his or her work making the investment case to the market
- Track record of IR career experience and qualifications – proven IR head experience, significant City track record, chartered accountant or chartered financial analyst qualifications.
When you first take up a new opportunity, it is important to get the salary level right, as it will be the starting point for future increases. This does not mean you should pitch yourself as high as you possibly can, worried that you might sell yourself short if you do not. Rather, it means you should do your research on what you require in order to maintain your lifestyle (for example, do you have children at fee-paying schools?) and what the market rate is for someone with your experience.
You should provide the hiring company – or the recruiter it has retained – with the information it asks for, both on your current remuneration and your realistic salary expectations. Companies and recruiters do not like surprises, so go and find out all of the details and dates on your current package, especially long-term incentive plan vesting dates, which could prove crucial.
In almost all cases – and certainly at the head of IR level – the company will make one very carefully considered offer that it thinks is fair. Your job is to make sure it has the information to get this right. It is not like buying a house; do not think there is a negotiation game to play. There isn’t, and it is essential to start a new job on the best possible terms. Overall, remember that money as a primary motivating factor is not a good story to tell someone who may employ you. It means you would probably abandon that position as soon as you receive a better offer.
Always think about your career, salary and lifestyle progression in the round, and be proactive. Remuneration and career progression are primarily under your control, but it is a long-term project, not a quick fix. That said, if you are not moving companies, there is no reason not to go for a pay rise. Our next article will cover the topic of internal pay reviews.
Heather McGregor is managing director of executive recruitment firm Taylor Bennett
This article appeared in the Summer 2016 issue of IR Magazine
