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10.3: Items Open to Negotiation- Cash and Noncash Components

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    1. Understand that there are many cash and noncash components, besides financial compensation, that can be negotiated when offers are presented.

    It’s important to review the various components of an offer before accepting. When identifying what to negotiate, several individuals may think only to negotiate base salary, or total compensation.

    Cash and noncash components can be negotiated, and each has a host of considerations:

    Cash Components

    • Base salary. You get paid your base salary on a regular basis, which will be weekly, twice a month, or monthly. Consider what the future salary potential could be and understand the timing. For example, most companies review performance and salary increases once per year, while others may review this twice per year.
    • Bonus. Several bonus options could be available, depending on the company and opportunity. If you are not eligible for a bonus, ask if it would be possible to receive one in the future, if your performance goes above and beyond what is expected. Ensure you know the timing of each bonus that could be available to you.

      • Sign-on bonus. Larger companies may pay sign-on bonuses, which were originally given out to reimburse students for moving expenses when they lived a certain distance away from their new work address. Corporations decided to streamline the process, and relabeled this a sign-on bonus, giving it to all candidates.
      • Quarterly or year-end bonus. Some companies allot for a quarterly bonus and a year-end bonus, both of which are paid based on individual performance and, of course, company performance (which could result in huge percentage swings either way). It’s important to understand how these bonuses are calculated and exactly what you are eligible for in advance.
    • Commission. Salespeople have a great opportunity to make commission, which is a percentage of the sales they make. This is a great opportunity, but you should also exercise caution. Understand the commission structure clearly. What happens if you do not sell anything for the first two or three months? Do you receive a base salary, or is it full commission? Is commission paid on gross sales or net profit? Do you get a draw that you will then have to pay back? Explore all of these details so you are clear on the entire structure.

    Noncash Components

    • Company stock. Sometimes, companies pay only the more senior individuals company stock or company equity. If company stock is made available to you, know the guidelines.

      • Stock options. Companies grant stock options and an individual can then decide to sell them at a specific price. The profit represents the current value, minus the option price.
      • Stock grants. Companies sometimes grant stock to an individual outright, usually with a vesting schedule to incentivize retention. If you receive a stock grant, you have the opportunity to own the entire stock.
    • Retirement accounts. 401K and 403b accounts allow you to save, and accumulate, a percentage of your salary (before tax) that you can withdraw at retirement age. Some employers match these funds either dollar for dollar or perhaps fifty cents on the dollar. There may be stipulations that will allow you to withdraw these funds before retirement, but withdrawals usually come with a sizable penalty. In some instances, you can take a loan from the amount you’ve accumulated in these accounts. Ensure you understand the many details associated with each of these retirement vehicles.
    • Benefits. Companies offer various benefits, and it’s important to review these carefully when considering an offer. Some plans allow you to take your benefits elsewhere (this is portability, and there is a fee, but it does provide flexibility). Often, these plans can be a bit confusing; many companies offer hotlines to call for further explanation. Benefits offerings can include the following:

      • Health-care benefits. These can be extensive, including elder care, child care, and adoption benefits.
      • Dental benefits. Some dental benefits cover 100 percent of the cost, while others cover only a certain percentage. Know what this is in advance.
      • Insurance. Some benefits offer travel insurance, should something happen to you while traveling on business.
      • Disability. This varies greatly per the opportunity. Some allow you to opt in for greater disability insurance. Knowing the options is very helpful.
      • Education. Some companies will contribute a certain percentage to your future education. For example, if you wish to obtain a graduate degree, they may pay 50 percent toward that, or there could be a sliding scale based on your grade. Some companies may even provide on-site advanced degree programs with special partnerships at certain schools.
    • Start date. Some companies will be flexible and others will not (especially if training programs or orientations are planned).
    • Employee perks. These could include discounted movie tickets, free admission to cultural venues, and discounted cell phone plans, representing an opportunity to save money you would otherwise spend.
    • Paid versus unpaid leave. This includes both vacation and holiday pay and sick time and personal days.
    • Lifestyle and flexibility. This could include the opportunity to telecommute, or to work a four-day schedule. Companies sometimes have broad policies and sometimes customize for employees.
    • Outplacement services and severance pay. This tool can be very useful should things not work out with the company in the long run. The bigger the company, the more likely you are to obtain outplacement and severance pay. This is especially useful for downsizings in bad economies, or when mergers and acquisitions are made.

    There are many reasons noncash items can prove to be important and sometimes critical in the acceptance of a job offer. Perhaps you have a medical condition that requires specialized treatment or medication, so medical benefits are extremely important. Perhaps you have a vacation booked in advance and you wish to push the start date off a bit to enjoy this long-planned trip with family and friends. Perhaps a lower base salary makes sense when combined with bonus potential, stock options, or grants. A higher base salary may make more sense because it’s a given, whereas bonuses and stocks are influenced heavily by economic downturns. These are important reasons to consider all elements of a job offer before accepting.

    • Knowing both the cash and noncash components of an offer can be extremely helpful when considering what you want to negotiate for, and especially so when the request for a base salary increase is refused.


    1. Select the two or three most important items from the preceding noncash list. Decide how you would negotiate for more in these areas.
    2. Pair up with a classmate and role-play with you as the candidate, and then you as the hiring manager.

    This page titled 10.3: Items Open to Negotiation- Cash and Noncash Components is shared under a CC BY-NC-SA 3.0 license and was authored, remixed, and/or curated by Anonymous via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit history is available upon request.