Dear Samuel

Dear Samuel: Negotiating Executive Employment Offers in the era of COVID-19

March 20, 2020 by Samuel Dergel Leave a Comment

Dear Samuel,

I have been with a large, well known company for a while in various finance and operations roles. I am ready to take on the CFO role at a smaller, growing company. I recently received an offer. The company looks like a good choice for me to start my CFO career path.

I’m in middle of negotiating my agreement and package. When I received the offer, things were still in the pre-COVID-19 state. With a pandemic being declared and the business world being uncertain, I have one major concern and I would like your advice.

There is a severance package attached to the opportunity that is fair (after we’ve negotiated a few things). The issue is that it kicks in on start date. I’m going to resign from my well know blue chip employer and going to a much smaller growing company. With the new world of uncertainty of COVID-19 and a business world that is changing from day to day, what happens if I resign today and when I start in a few weeks the situation at my new employer-in-waiting changes so drastically that they tell me they don’t need me anymore?

Living on the Edge, Massachusetts

Dear On the Edge,

Your question shows that you have a sharp mind.

Usually, your concern is not an issue. You’ve likely done your due diligence, like the prospects of your potential new employer and feel that there is a good fit for you to go in and make a difference while you tackle new responsibilities and challenges. Waiting a few weeks is usually not an issue.

Businesses are now facing challenges they have never had to face before. And, when taking a look at the speed and depth of this natural disaster and the impact it has on business, who can really say that companies with limited cash and resources will pull through this crisis?

I have never seen anyone ask a potential employer to cover the risk between resignation date and start date. I have never seen the need to either. Until today.

I recommend that you go to your potential new employer and express your concern to them. If they have been reasonable with you throughout your negotiation process, I expect that they will be reasonable as well.

I do not recommend that you go to them with a proposed solution. Ask them to solve the problem. If the method that they come back with is fair and deals with your concern, accept it.

I also recommend that you get into your new company as soon as possible. I actually had one new CFO start at a client on Monday March 16, 2020. Their first day in the office was bedlam, but the leadership and ownership were grateful to have a steady hand on deck to help them deal with the stormy seas.

Close the deal and get on board. Your new employer needs you even more than they did a month ago.

Good luck and keep me informed,

Samuel

Dear Readers,

Dear Samuel is a feature of our Leadership Blog that deals with questions executives have about their leadership roles and career situations. If you have any questions that you would like Samuel Dergel to address, please send your questions to dearsamuel@dergelsearch.com.

Please note that all questions asked will be treated in the strictest of confidence and all identifying material in questions asked will be edited to respect the privacy of all participants and companies.

Dear Samuel: Help! I’ve been Ghosted

July 23, 2019 by Samuel Dergel Leave a Comment

Dear Samuel,

Here is my question: What happens when an executive recruiter “ghosts” you as an executive candidate?

There are tons of articles due to a robust job market that candidates are “ghosting” recruiters during the sourcing and/or after job offers phases. But how do you deal with a top-rated recruiter who “ghosts” executive candidates? This happened a few times to me and I find it frustrating, especially at the executive level.

Thank you,

Chuck in Chicago

Dear Chuck,

Wow.

First, on behalf of all the executive recruiters out there that care, I’m sorry that someone treated you this way.

Why do people Ghost others? This is a relevant question across the spectrum today, both in our personal lives as well as the business world we live in.

From my perspective, there are three reasons why people Ghost.

They are uncomfortable with sharing bad news, or
They have no news, or
They don’t care enough to follow up.

Executive recruiters are humans, and as humans, we are not perfect.

However, “top-rated” recruiters stay “top-rated” knowing that a candidate can be a client at some point in time in the future. All executives that they deal with need to be treated with respect, courtesy and care.

If I was in your shoes, I would take the Ghosting as a sign that the client is not interested in you. You need to look at it as it is their loss, and that they were not the right fit for you. See it as a gift.

Your next role is out there with an employer that appreciates what you are bringing to the table and sees your value. They also have made the decision to work with an executive recruiter that reflects their values.

And as you need to hire for your new employer, you’ll make sure that you’ll only work with “top-rated” recruiters that care.

Wishing you the best as you continue your career for people that treat you right,

Samuel

Dear Readers,

Samuel

Dear Samuel: I’m actively looking for my next executive role.

June 25, 2019 by Samuel Dergel Leave a Comment

Dear Samuel,

I am an executive that is actively exploring new career opportunities. Do you find that retained search firms are the primary source for new roles or networking? Other than leaders that you have worked with in the past, who do you network with and how?

Sally in Seattle

Dear Sally,

A good number of the executives we speak with that are new in a role tell us that they got the role because they are were hired by someone that they’ve worked with before. The reason this happens is because a high level of trust already exists between the person hiring and the person being hired.

Retained search firms are hired by companies in two instances:

Multiple people are involved in the hiring decision process, and having an outside objective, experienced and trustworthy search partner ensures that a complete search will be done and that a strong pool of qualified candidates will be considered in the hiring decision process.
Where a potential candidate is already trustworthy to one of the people in the process, an executive search firm can ensure that this person is properly compared to others. In many cases, the person who is already known and trusted by one of the hiring decision makers is the person that wins. This can include an internal candidate for consideration or an external candidate that is known to or used to work with one of the hiring decision makers.
When there is one key hiring decision maker involved, if they do not have someone they already trust that is interested and available, they will go to search.

The best people to network with as you look for your new role are those that you have worked with in the past. They already trust you.

The biggest challenge many executives have is that they only build their network when they are looking for their next role.

Successful executives are always networking, even when in their role.

Your question pretty much tells me that you are like most executives. You have not invested what you needed to so you can be as successful as you can be.

Is it too late to build your network when you are actively looking? No.

However, even if you are very successful in the building your network in your search process, the likelihood is, as it is for most executives, that you will ignore your network once you start working again and let your network go stale.

Networking is a verb. It requires action. If you don’t tend to your network, you won’t have a network that works for you.

An active network to whom you continually add value to you will keep you in mind for opportunities.

In your situation, I would focus on adding value to your current network of people you have worked with in the past, and grow your network of people so that you can begin to add value to them today so that they will be able to add value to them in the future. Could this turn into an opportunity in the short-term? Maybe. But if you are not playing the long game, you come off as desperate, which is the kiss of death for an executive in transition.

Also, spending time reaching out to recruiters may not be the most effective way to find your next role. Sure, recruiters out there may have the role that fits you, but experience shows that if you are visible and branded, good recruiters will find you if you are what they need to meet their clients’ needs.

Good luck with your search!

Samuel

Dear Readers,

Samuel

Dear Samuel: I want to cash out my vested shares, but…

June 19, 2019 by Samuel Dergel Leave a Comment

Dear Samuel,

Here’s a career challenge for you…

Situation

Approaching 5 years of CFO service in a PE situation that chose to recapitalization vs sell. PE is minority, founders in early 50’s control.

As CFO, I hold in-the-money vested equity interests worth approx. 8 times annual salary at current expected valuation. Payout requires change of control, however. And there are significant barriers to exit – it’s essentially “must be present to win”.

Location is undesirable, and with last child graduating in 1 year, it’s time to think about an exit strategy. Obviously, want to retain or cash out of equity, but location is a problem on the family front, and a strong motivation to relocate.

Question

What recommendations do you have to negotiate from this golden handcuff toward a more desirable financial and geographic outcome?

Options I have been pondering…

Ideally, payout and exit as a “good leaver”, with non-compete. This is contrary to founders and PE partners, who have intimated unwillingness to consider.
Relocate to a commuter/remote situation.
Pitch PE firm to relocate within the portfolio family (I’m regarded very well among all portfolio company CFO’s), and retain equity interests until a change of control.

Bob in Boise

Dear Bob,

The one thing others can learn from this is to make sure when going into a new career opportunity with a PE player, make sure (if possible) that a recapitalization counts as a change in control would for vesting purposes.

Option 1: As CFO, you might be in a position to speak to potential purchasers that would come up with a price that the founders and PE couldn’t say no to. That would benefit them (and you), and might get you to leave with your head held high and your bank account flush with cash. The likelihood of this happening is low, but you should at least sniff out potential interest without upsetting the owners. Not easy.

Option 2: You can ask them to consider a remote / commuter situation. My thought is that this is the most likely situation that will allow you to continue to grow your equity and keep your family happy. It may be the easiest solution for the owners to accept, especially if they like you.

Option 3: This could be a good solution. While it might make your PE firm happy, the original and majority owners may not be thrilled with this situation and might put up a stink.

Without more information than you’ve provided in your letter, I would recommend the following approach:

Speak to your PE owners, telling them that you want the company to continue to be successful, but your life situation has changed since you’ve started and you would like to make a change. Be honest and say that you were hoping for a sale rather than a recap, as this would allow you to exit gracefully and earn what you’ve invested over the years. You can ask them to change the deal to include recap to trigger your change of control provisions. They may balk, but your should at least ask and let them know this is your first choice. You can provide them with Option 2 (remote / commute) as the first alternative option once they hesitate and Option 3 (relocating within the PE family) as a second option.

In essence, the owners should know what you want, how you feel, but not believe that you are holding a gun to their head. Asking for what you want and providing alternative solutions can lead to a solution that everyone can accept.

Good luck and let me know how this turns out.

Samuel

Dear Readers,

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