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How to strategize your compensation

There are several main parts of your compensation at work : the base pay, bonus, and stock.. Of course there are other perks like vacation days, 401k, medical, dental, vision, drug insurance, tuition reimbursement, etc. Those are important perks to any job, but at the end of the day, they are just that. Perks.

When you think about compensation, think of how some CEO’s can make multi-million dollar salaries. Their base is a starting six-figure salary. Then they get highly compensated in bonus pay and stock.

Consider one of Hawaii’s top employers: Hawaiian Airlines.

The Hawaiian Airlines CEO Peter Ingram made $3.1m in 2021 (remember, this was still the year of COVID restrictions, which would have significantly impacted airline operations). $657,000 was his base salary, $430,120 was a bonus, and $1,944,900 was awarded as stock and another $41,633 from “other”.

Can you imagine that his compensation last year in bonus alone was far more money than some people will even see in their lifetime? Heck, even his “other” compensation is more than some people make in a year.

See how much the bonus structure at some employers can make a difference in your pay?

When you work for an employer that incentives employees to work harder for the year end bonus, then you bet your employee will work for it!

But if no matter how you work, your employer just continues to give you a small appreciation “tip”, then you need to be smart about how to negotiate your base salary.

The bonus will not “bump” your pay up enough to make a difference. I was able to raise my pay by 11.8% in 2021 by negotiating my salary versus the 2% year-end bonus I received. This just tells me that if I want to be well compensated at my current job, I need to continue to negotiate my salary because the year-end bonus will just be pennies.

Continuously evaluate where you are in your career

I wish I could say I was further along in my career, but I realize that I was not one of the lucky ones that was “red circled” to receive great mentorship and advocacy.

Sometimes it is the luck of the draw.

While you certainly can “manage up” and control your career to a certain extent, the fortunate employees are the ones whose managers take it upon themselves to promote and speak up for great opportunities for their direct reports.

Employees want growth in their careers. Companies want managers that can manage and reduce risk. Sometimes they may be contradictory to one another. You have to decide what is for you.

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