WEST Wisdom Blog

Compensation is more than cash

Posted by Diana Anderson on Apr 17, 2019, 12:16:43 PM
A well-managed equity portfolio can use your equity compensation to transform your income into self-sustaining wealth. Compensation is changing and it’s about far more than just cash. Learn 3 things you need to know now to move beyond income to wealth.

3 minute read

Compensation isn’t just cash: 3 things you need to know now

The WEST Wisdom Blog has explored this before, so this one’s quick and done. The original advocate for the salary history ban in Massachusetts, Katie Donovan, led a #WESTevent on negotiating pay equity—but it bears repeating, and skywriting:

1: Salary history bans are going into effect at the state and local level across the nation 

Ding! Ding! You are now free to terminate the salary cascade you inadvertently triggered when fresh-graduate-you perhaps a bit too eagerly negotiated compensation for your first job. I know I played it cool, just like how my dog plays it cool when I get home from a business trip. My pane-of-glass poker face was as nonchalant as her jello-in-an-earthquake full-body tail wag.

2: Your personal intellectual property (IP): This means you side hustles and passion projects

This may seem obvious if you’re talking about an industry-related startup or product, but companies across all industries are casting a much wider net. 

During my former life as an analyst and database developer in fintech, one of my employment contracts included a clause that gave my employer the intellectual property rights to anything that I created. Anything. Even my action-thriller space-vampire novel and vegan pumpkin chocolate chip cookie recipe. Nobody had ever heard of the clause actually being enforced, but there it was, in every employment contract from the analysts and admins to the researchers and partners.

Perhaps that was an extreme, but in the day of social networks and personal branding, more and more companies are getting specific and explicit about employees’ personal IP rights and even about the nature of personal branding/content, from Instagram to Quora. 

Maybe not such a big deal for an aspiring sci-fi author and baker in fintech, but personal IP is a serious consideration if you’re one of those brilliant people creating your employer’s bread-and-butter products, and you’re also known to refer to some of your closest friends by their GitHub handles.

3: Equity compensation isn’t just for senior execs and startups

Everybody and their mother seems to have a passion project or side hustle that pays in personal satisfaction and equity, while their day job provides security and funding. And, even large, established organizations have caught on to the benefits of personally incentivizing company growth at all levels, from the mail room to the boardroom, using generous bonuses in the form of equity compensation. 

Equity compensation is an increasing large component of total compensation, and, being equity, that has dynamic and exponential potential in both directions

Risk

Beyond criminal foobars like Enron, even established blue-chip companies are subject to the inherent risk of the market. Decades of blue-chip equity compensation disappeared in a heartbeat in market and world catastrophes like 9-11 and the 2008 financial crisis. Do you diversify away the risk of all-your-eggs-in-one-basket? Well, maybe, but would the basket be your employer’s stock or are equities as an asset type? There’s more than one type of risk.

Reward

But wait, it would be crazy not to hang on to those Google shares like they’re your ticket for the inaugural Virgin Galactic flight. Wouldn’t it? But, then, what about the eggs-in-one-basket thing? Or, how long after the IPO do you wait before you start to sell portions of your holdings? Can I sell anything, or did I get options I have to buy first? Can I sell the options? What’s that about vesting?

Know who’s not flying solo in space, equity portfolio management or financial planning?

Astronauts and space tourists

 

Own it! A well-managed equity portfolio can use your equity compensation to transform your income into self-sustaining wealth.

Click below to learn about our upcoming #WESTevent workshop on equity compensation and financially planning led by Judi Reed, Financial Advisor, and Robert Peretti, Equity Compensation Specialist, of Morgan Stanley.


Click here to learn more about  the event and get registered 

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Topics: Events, Women, Science, Career, Community, Cambridge, negotiation, Women in STEM, Workshop, Networking, Upcoming Events, Biotech, Connect, Management, Compensation, Leaders, Own It, Learn, Advocate, #WESTevent, Equity Management, Intellectual Property (IP)

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