Community Perspectives: Outside of base salary, what are the different forms of compensation one can expect when going in-house?

In-house legal professionals discuss expectations on salary offers when transitioning to in-house.

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Community Perspectives: Outside of base salary, what are the different forms of compensation one can expect when going in-house?

(Author) Attorney

Outside of base salary, what are the different forms of compensation one can expect to encounter when looking to go in-house? To what extent are these negotiable in a Fortune 500 company? Which forms are worth negotiating, and which (if any) should one be skeptical of?

General Counsel Responses:

  • I've had stock options at one company I worked at, and restricted stock units (RSUs) at another. In my experience, I was granted stock options at a private company planning to go public. You need to wait for your stock options to vest, and then pay in separately to actually exercise your stock options (at a -- what I understand is a low/favorable -- rate set by contract). Once you pay to exercise your options, you can't get that money back unless and until the company goes public. So, it's basically a wager/Monopoly money that's worthless and you can't touch them until they do. RSUs are automatically granted to you over the applicable vesting period/generally a guaranteed payout of some amount, subject to what the stock is worth after the options vest and you can sell them.

  • Vacation. Everything is negotiable within the level you are slotted at. If you are a counsel or senior counsel, those targets for compensation are different. Then they may have counsel levels a, b, c or 1,2,3 based on years of experience or skill set. It’s their problem not yours, but you have to convince them that you deserve higher.

Counsel Responses:

  • Signing bonus, equity grants, RSUs, annual bonus - it's all negotiable.

  • I can't pretend to know enough to provide a decent answer here! I'm still learning myself.

  • It will depend on the company but I’ve had MANY stock options expire out of the money. With RSU’s you always get something and they beat automatically, so it’s not a timing risk that you have to deal with. I definitely prefer RSU’s. But if my company were more stable (it's a very cyclical industry plus the company had had some issues) options might be better. It's definitely a much different situation with a private company. The risk that it will never go public is a huge concern. If it’s a public company you don’t have to go out of pocket on options. Typically you exercise and sell at the same time and they just deposit the difference between the sale and buy price.

  • When we went public, we switched to RSUs. In my case, the value of my options is multiples of my RSUs. When I leave this company, it will either be for MUCH greater cash compensation or stock options. Because options are a bit risky, there tends to be more upside potential.

  • Bigger companies tend to have set rules on what and how much you get. They may be not very negotiable at all - but that’s a much bigger issue after you’re in the door. Generally compensation is Base (salary), short-term incentive (annual bonus) plus long-term incentives (restricted stock units, bonus and maybe performance units). We have specific written guidance for what you get depending on your pay grade.

Attorney and Associate Responses:

  • Baby lawyer here. What’s better, RSUs or stock options?

In-house? Be a part of the conversation on Fishbowl (anonymous).