Hi Reader,

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In this week’s episode of Gentle Power, we explored two topics: one personal (do we negotiate with friends) and one negotiation-related (how companies use tricky language in job offers). Full episode here (YouTube | Spotify | Apple Podcasts), with the main points below.

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Do we negotiate with friends (and each other)?

We’re sometimes asked if we negotiate with each other or our friends. The short answer: yes, but not in the way people usually think.

When most people say “negotiate,” they envision haggling, transactional bartering, and zero-sum wins. Our definition is different: don’t leave value on the table or don’t waste value that could have benefited both parties. Look for trades that make both sides better off (or at least don’t make anyone worse off).

Think of the classic “orange” story: two sisters are deciding how to split an orange. If they cut the orange in half, each gets 50% of the orange. But after discussing why they each need the orange, it turns out one sister needs only the juice while the other needs just the rind. Since they clarified their priorities upfront, they both got 100 percent of what they needed.

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The “annual equity” wording that could silently shrink your pay

Now for the negotiation topic. A friend of ours received an offer from a large, household-name company, where she understood her comp package to include $50K of equity awarded to her every year of employment. The offer’s language around equity was as follows:

So far, anyone would read this as $50K of equity awarded annually, and this was how it was positioned to our friend by the recruiter without further clarification. However, the offer letter goes on to read:

So it turned out the actual terms were:

• Year 1: She is granted $50K in equity, but it vests over 3 years → ~$16.7K awarded at end of Year 1
• Year 2: She may receive an additional $50K in equity, which also vests over 3 years → ~$33.3K awarded at end of Year 2(the second vested year of grant #1 + first vested year of grant #2)
• Year 3: She may receive an additional $50K in equity, which also vests over 3 years → She is awarded ~$50K at end of Year 3 (the third vested year of grant #1 + second vested year of grant #2 + first vested year of grant #3).

This language was also buried deep in a bunch of other legalese within the document. Months into her new role, our friend reached out to us despondent and upset. The gotcha was hidden in plain sight:

• “Annual award” can still vest over multiple years, so your first-year equity vest may be only a small portion of the stated number in your offer letter.

First lesson of course is to read the terms of your offer carefully. Your strongest advocate is yourself; no one else will look out better for you than you.

Second lesson is to never take what the recruiter says at face value, but you do want to assume best intent. We don’t believe the company was acting maliciously, but always remember that offers are rarely worded to overpay you by accident.

The best course of action when you need clarification is to assume best intent and to ask clarifying questions (politely) before you sign, for example:

• “What portion of the equity vests in year 1? Could you please share the exact vesting schedule and cliff if I was to remain at the company for the full vesting schedule?”
• “If grants are annual, do they overlap so my YOY vested value reaches the number stated in the document ($50K)?
• Can you provide a year-by-year vest table?”

Bottom line from the two topics covered above: negotiation isn’t about squeezing the other side or assuming the other party is trying to deceive you; it’s about uncovering non-obvious value as well as protecting yourself from potential risks shrouded in gray language.

The more collaboration and clarity you bring to the table, the more likely you’ll land a deal that truly works for you as well as all other parties involved.

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Warmly,

Gerta & Alex
​Co-founders, YourNegotiations.com

P.S. Know someone who could use our help?

Refer them and earn $500.

We’ve paid out thousands to people who just made a simple intro. If your friend becomes a client, we’ll send you $500 - no strings attached; just our way of saying thank you for spreading the word.

Simply send an intro email to alex@yournegotiations.com and your friend.

See all the details of our referral program on our website here.