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When the Boss Offers a Stake In the Business to Get You to Stay

By Perri Capell

Question: I am the technical director of a small, growing private company. I received an offer to become research and development director for 50% more than my current salary. When I told my boss, he offered me a 10% share in the firm to stay. Should I move for 50% more pay immediately or stay and perhaps earn more later?

Answer: At first glance, this question seemed to be about the pros and cons of accepting a counteroffer to stay at your current employer. However, your situation is more complex than that.

First, don't base your decision solely on money. In many cases, people who accept jobs only because they'll get a bigger paycheck regret it later. Although pay is important, true satisfaction comes from doing what you enjoy.

"You can make all the money in the world, but if you aren't happy, how long will you want to stay there?" asks Bill Kraus, a vice president of RWD Executive Search in New York.

More critical to this choice is your career future. How do you see it progressing and which company is more likely to help you to achieve this vision? Taking the new job might be a good career move because you would become the head of a department, perhaps supervising a technical director instead of being one.

On the other hand, your current employer may have significant growth potential, and top-tier investors may be backing it. You could experience satisfying career advancement if you stay.

Weigh these factors and make your decision on what's best for you professionally, says Joy D'Amore, vice president of human resources and talent acquisition for FOLIOfn Inc., a brokerage and investment company in Vienna, Va. "If it were me, I would assess what's most important, whether it's the potential to make a lot of money, the career opportunity, or both."

Along these lines, think about what made you consider this offer. Have you been actively searching for a new position or did a recruiter call you out of the blue? If you were looking, you likely are dissatisfied in some way. These problems may not change if you stay.

"There must be some reason why you were interviewing," says Mr. Kraus, who previously was a recruiting executive at a company. "Look at those defining factors and what they're worth."

Some recruiters say to never stay with a current employer after you've told them about a job offer, no matter how much money you're offered. They claim you'll be seen as disloyal and that your boss's "counter" offer of more compensation is designed to keep you only until your replacement can be found.

But employees who receive counteroffers aren't necessarily doomed if they stay, Mr. Kraus says. Lines of communication may be poor at their companies, and they may not have let management know they were unhappy. When these employees say they've received job offers, their managers may make sincere efforts to keep them, he says. "I don't necessarily believe that it's political suicide to stay," he says.

One sign your employer may have no plans to replace you is that it has offered you equity, which gives you ownership in the business. Still, having equity may pay off only if you stay for the long run, and your shares will be most likely to gain value only if your company is sold or has a successful public stock offering, Ms. D'Amore cautions. "Ten percent of something that isn't going anywhere is 10% of nothing," she adds.

Finally, take a good look at the new job and company and its culture. Employees at larger companies often don't have as much influence as those at smaller firms, and may not be exposed to as many challenges, says Ms. D'Amore. Some people who are happy at small employers don't fit in at larger ones.

My advice is to think it over carefully in light of the factors I've outlined and discuss the pros and cons of your options with trusted friends or family members. In the end, your decision probably turns on what's best for your career, because your career satisfaction is what's going to generate more money.

Have a question about job hunting or career management? Send it to Perri Capell . If you don't want your name used in our column, please indicate that. Due to the volume of mail received, we regret that we cannot answer every question.

Article from Career Journal Online December 2006