Most current and former consultants will eventually consider an executive opportunity, whether that be in a large corporation, a private equity firm, a startup, or elsewhere. During that interview process, questions will arise about previous experiences, skill set, and… compensation.
Compensation comes into play for a few reasons:
1. Companies (or the executive search firms representing them) want to know at the outset if you are in the general ballpark. No one wants to waste time – yours, or theirs – and they need to know if they will be able to make a compelling offer. If not, what’s the point of continuing?
2. If an executive recruiter doesn’t know what you are earning (or presents you to the client even though you are outside the realm of possibility), they have ignored one of their client’s key parameters.
3. Down the line, your compensation is also required for each company’s intricate internal approval process for offers (some go as far as asking for your W2s, pay stubs, etc.).
Speaking of offers…
A company (or executive recruiter) will not be able to tell you the exact number you would receive at offer stage until… you’re at offer stage. Why? You need to visit a house before you put in an offer to buy it, and similarly, companies need to fall in love with you before they can start crunching numbers. An (almost certainly) inaccurate number quoted early in the process could lead to incorrect expectations, good or bad, and a potentially missed opportunity on both sides.
Who should you tell?
We’re not suggesting you tattoo your compensation on your forehead (we hope you would at least foresee raises in your future). Disclose your compensation to people you trust, and who are instrumental in driving your interview process. If it’s a recruiter you have known for a few short minutes on the phone, get a sense of their professionalism, firm, connection with the opportunity, and process with the hiring company. The simple fact is the more seasoned executives get, the less often they resist sharing their compensation in an interview process, because they know it comes with the territory.
If you do decide to withhold your compensation…
…know the risk you run in potentially differentiating yourself from other candidates in the process: withholding your compensation can make you appear like you have something to hide. If you think you are getting underpaid, you can always frame your compensation in your delivery. You can also voice what you want or will need in your next opportunity early in the process.
The worst possible approach:
Whatever you do, the worst possible approach to compensation in an interview process is to share a compensation, but not your compensation. As we mentioned, your earnings are often verified in company approval processes (is it really worth the risk to see if they don’t?), and last minute surprises are very rarely a positive addition. The last thing you want is for a company – one that is willing to pay you more than you are currently earning – to find out at the very end that you were being deceitful for your own benefit.