Dear Gib: I have an offer for a job with a lower-level title, but a significantly higher salary. How much should I care about the title?
Given that titles are non-standard from one company to the next, focus on total compensation and the long-term growth opportunity instead.
All things being equal, I’d take the higher salary with the lower-level title. Titles and levels are hard to compare across companies, while dollar figures are a lot easier to compare. Hence, it’s better to focus on the salary, or more specifically, total compensation (the total salary plus options and a few other perks—401K match, health benefits, etc.) But there are lots of components to deciding what’s next in your career.
In 1991, I joined Electronic Arts in marketing as a Director of Product Management. I had just finished business school, and it was straightforward to compare notes with my classmates about salary and options at other tech startups to ensure I was treated fairly.
After a year, I realized I wanted to build products, so I talked with the EA product team about moving over. There was a lot of hand-wringing about whether I should start at the bottom of the ladder— as an Assistant Producer — or one step up— as an Associate Producer. They decided to start me as an Associate Producer, and I took a small pay cut. It was a great move in the long-term as it launched my product career, and the handful of options I received paid for a down payment on our Silicon Valley house.
When evaluating an offer, here’s what I focus on:
A good potential relationship with my new boss and peers
The extent to which the new role fits my skills
Potential for personal growth and learning
The company’s prospects for growth/success
The degree to which the salary offer is fair— especially compared to peers within the company
The stock option package. In the long-term, this is the most significant opportunity for wealth creation.
This is what I learned over time:
I began to think like a Venture Capitalist. I evaluated the market's potential size, the team's quality, funding status, and the potential to create shareholder value. I often compared notes with VC pals. The main difference between us: VCs invest money while I invest time. As my carer progressed to VP-level roles, I asked to meet key investors/board members to evaluate the company in greater depth.
I became a student of personal market comp. It’s uncomfortable at first, but reach out to peers to compare notes about compensation. After a while, you can collect lots of data you can provide in return to folks who answer your market comp questions.
I asked the hiring manager how much they got paid. (What their total comp was). I prefaced the question by explaining how important fairness was to me. More than half the time, they’d give me clear direction about the extent to which they thought the compensation was fair.
Making decisions about job offers is hard. Like most big decisions, you need to evaluate the data, then make a leap of faith based on intuition. To avoid procrastination, my wife eventually imposed a deadline on me. I had to decide by Monday morning of that week. As she said, “Your decisions never get any better with time— just decide and go.”
I hope this answer helps you. Good luck with your decision.
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