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Avoid These 5 Executive Compensation Mistakes

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Avoid These 5 Executive Compensation Mistakes

Hiring an Executive is not the same process as hiring Middle or even Senior Management. An Executives compensation package can be a tricky area to navigate and it is crucial that you approach it with the right mentality. Avoid making Executive compensation mistakes. You should be considering “what do we have to do and what will it take to get this candidate to join our team?” rather than “how much can we save?”

Successful Executives, whether they are actively looking or not are always in demand and are inundated with offers. I often hear “it’s not about the money, it’s about the opportunity to grow a business and build a legacy”. So if you are a Start Up or maybe approaching from a smaller, less market renowned brand. How are you going to attract a leading Executive to your business?

How much of a visionary Managing Director or CEO are you? Are you willing to pay £10,000 even £20,000 more than budgeted for to secure a top Executive who will double your turnover, open new markets or channels and bring with them a black book of clients and contacts built over a long successful career?

Too many companies approach hiring Executive talent the same way they approach hiring a Middle or Senior Manager manager. Here are five common compensation mistakes companies make when hiring Senior executives:


1. Assuming the candidate who is not working is desperate to work.

It is common for Executives to take time out from their careers. Even more so in the last 18 months due to Covid. Gaps in their CV’s can be as a result of taking time out to recharge, to travel the world, spend more time with their families or perhaps reassess their next career move.

Whatever the reason, the ability to take a period of time away from their career will translate that they are financially stable enough to do so. Therefore, a gap in the candidates CV does not mean you can expect to secure this senior candidate for less money or approach them in a different way

2. Not letting your recruiter serve as go-between.

If you are working with a recruiter, let them do their job and co-ordinate the conversation. We mediate the negotiations ensuring there is no tension or frustration between you and your potential new colleague. This ensures that your relationship starts off on the right positive footing.

Whilst you are no doubt an accomplished negotiator, we negotiate offers every day. We are the ones that the candidate will confide in. We know what sits behind their CV, their drivers, their ambitions and their personal situations. What their spouse thinks of the opportunity etc. Let us do our job and negotiate on your behalf.

And finally, it usually pays to let us recruiters handle the sometimes tricky conversations around compensation. When it doesn’t quite tick the box of the candidate, there is still a solution that can be found and we have the expertise to remove the doubt and push it to a successful conclusion.

3. Not considering the time factor when trying to land a senior hire.

As an MD, CEO or Director of HR – you may hire one Executive perhaps once a year. When hiring directly, companies tend to presume that the process is the same as hiring a Middle or Senior Manager. You place an advert, candidates apply, you interview and offer and that is it. If the candidate does not accept the offer, you will simply restart the process again and find more CV’s

This is where the error is. Do not presume there are more Executives lined up behind them. Remember, the successful ones are not looking, they have a long list of potential offers from perhaps more bigger well known businesses so do not presume you will be successful the second time around.

As a recruiter, I’m constantly speaking with senior-level executives. I may take a brief for a Director or CEO which must have a specific background, from a specific market, with aC-Suite specific education and in a specific location who is interested in your opportunity at that given time. I may only find you a handful of Executives for consideration. But you can rest assured they will be inline with your brief

If this candidate doesn’t work out, it could take 6 to 9 months to identify another good fit. Trust your recruiter to know what it’s going to take to get your preferred candidate on board. We are the ones with the most current knowledge of compensation for this role, sector or industry.

4. Expecting a passion for your mission to mean a compensation discount.

Any successful Executive who is willing to take a risk on a smaller business, even a startup is clearly passionate about your mission and what you are looking to achieve. The expertise they can bring and the legacy they can leave. However this does not mean a compensation discount, remember they have worked hard their entire career to get to the level they are currently on.
Yes they are keen on your vision, however they still have a market value and unfortunately, if that value is not respected then you will soon see your newly hired Executive head hunted back out of your business for a more attractive proposition

If the base salary cannot be met, be more creative. Think about equity in the business, how about an attractive bonus if they meet business critical targets – reward them for it.

5. Forgetting how stressful this process is for the candidate.

Another executive compensation mistake is forgetting how stressful this process is for the candidate. The hiring process can be stressful, there’s no question about it. However, the Executive level is even more so. Not only will they be changing jobs, but they will be taking the weight of the business onto their shoulders. They may be dealing with shareholders, they may have to oversee a merger or acquisition. They may be joining a business which is a start up and has a high level of risk, but an equally high level of reward

They’re trying to figure out what’s the right next move for their career while balancing work-life considerations like the commute, potential travel, long hours and what’s best for their family.
As much as possible, companies should try to take the emotion out of their side of the conversation and respect the candidate’s decision-making process. Empower the recruiter to mediate between the two parties and find the right solution for those involved.


So to go back to the start of this blog, your aim is to get this top Executive to join your team. By taking into account these factors, you are going to go a long way in achieving this and ensuring the Executive candidate is valued throughout the process. By taking the steps you can avoid making executive compensation mistakes.

I’d love to hear your thoughts, are their other mistakes that are often made in the Executive hiring process? Maybe you wish something had been done differently in your last interview? I’d love to hear your thoughts


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Scott Williams

Scott Williams

I’m an independent owner of Food Recruit - Search & Selection. Passionate about the Food Manufacturing industry having spent time as a Supply Chain Manager and Business Development Manager for two of the UK’s largest meat importers. High Care, Low Care, Chilled and Ambient I have worked across all markets including B2B, Foodservice, Wholesale and Retail.

I fell into recruitment in 2016 to start a Food & Drink desk in a long-standing Engineering Recruitment business in the West Midlands. Progressing on to Business Development Manager covering multiple markets before starting my own agency in September 2020.