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Evaluating Extended Job Offers

Congratulations on hard work well done! You have what it takes and they offered you the job. Should you accept it on the spot? Was it the salary you were hoping for, and if not, are you comfortable negotiating a better salary and benefits package? Is this the right move for you long term? Basically, it comes down to assessing the job offer! The first question most people ask me is "Should I accept the job on the spot if they offer it to me?" Of course, there are exceptions to the rule, but generally giving yourself a few days to analyze the salary, company, and how it works with your plan is advisable. Most companies are happy to give you the time, as bad hiring is a costly mistake. They would rather you spend the time up front than on the first week of the job.

Salary, Benefits, and Perks—The Meat and Potatoes

Luckily at, we have a financial planner help us assess the offers that are made to our candidates on behalf of our client-companies! In lieu of having me as a Career Coach with a financial whiz at my beck and call, I suggest the following. On a sheet of paper or spreadsheet, make a list of your current salary and all the benefits and perks you are currently receiving. If you do not have anything to list on this side, chances are you should jump over the desk and kiss the person who just gave you a chance in our industry!

Start with your current salary at top on the left and the offer on the right. Salary can be defined simply as the amount of money given to you every other week for the job functions you perform. But is it really? For some of us, it is part of our self-esteem; for others, it is a means to an end. Regardless, you must make sure that the salary offered to you is reasonable for the position, and that when you factor in possible cost of living differences, if relocation is necessary, are you being paid enough to maintain or exceed your current lifestyle? Remember, your $80,000 in Eugene, Oregon afforded you two acres of land and a huge savings account but in San Francisco, you bought yourself a studio apartment with enough left over to eat some Top Ramen.

Benefits or perks often can make up between an additional 25 to 50 percent of your current salary, and most people often overlook a chance to increase their employment package by paying attention to these benefits. No two game companies have the same benefits program. For example, Microsoft is plagued with the reputation for not paying the highest salaries in the game industry. But is this really true? Their game division offers employees a very robust benefits program. This is a perfect example of the need to review and understand a specific employee benefits program. The average Microsoft employee receives an additional 35 percent in her compensation package. It can be confusing, but it is important to understand these benefits.

A few years ago, I negotiated for a Senior Programmer—not only a killer job, but equity ownership in the game company. I was dancing around my office! I helped him fulfill his dreams and also set him up for long-term growth! I was amazed to discover he and his wife were not as excited as I was. Turned out, they were hooked on the lower-than-expected base salary, and because they lacked the knowledge to understand the stock award, did not realize the significance of the employment offer.

Health Insurance

Most game companies provide a choice to employees of either a Preferred Provider Option (PPO) plan or a Health Maintenance Organization (HMO) plan. When choosing, consider that, although more expensive, PPOs give you the choice of doctors and care. Although more cost effective, most HMOs require doctor referrals for specific care thereby allowing your primary physician to make those choices for you. Human Resources will help you determine the type of plan best for you. Dental, vision, disability, and life insurance are also sometimes included. Dependants can usually be covered, although the company may charge you a fee to help cover their insurance premiums. Some companies will provide benefits for domestic partners, if you are unmarried but have a long-term partner.

Remember that the higher up the ladder you go, the richer your benefits package should get. Although at entry level you may receive a life insurance benefit of one or two times your salary, a VP at the same company may be negotiating a million-dollar policy that also accumulates cash value at retirement.

Retirement Plans, 401(k)

Some game companies offer a company-sponsored retirement account. The company withdraws the amount of money you specify from each of your paychecks, pre-tax, and deposits it in the account for you. Monies then accumulate interest and dividends without any tax due until you withdraw from the account at retirement. Most company 401(k)s allow you to invest in different mutual funds, bonds, or savings accounts. You should evaluate all of the options, and based on your risk/reward profile, invest accordingly. Some companies match your contribution up to a specific percentage of your salary. If your employer offers that benefit, remember that your automatic return on that contribution is 100 percent return on your money in addition to whatever the money earns in interest or dividends. It's frequently a good idea to diversify your retirement account into different investments. Keep in mind that there are significant IRS penalties to cashing out a 401(k) or any other tax-exempt retirement savings plan before you reach the age of retirement.

Bonuses and Raise Reviews

Most game companies do a performance review at specific times of the year, either based on your length of employment or on a calendar date. For both bonuses and raise reviews, see if you can get a written document stating what your job performance goals are and what your bonus or raise structure would be if you met those goals. If your company does annual reviews and you are accepting a lower salary, sometimes asking for quarterly or semi-annual reviews can help increase your salary quicker. If your written goals are very specific, and you accomplish them, you'll be able to argue convincingly that you deserve that raise and/or bonus.

Employee Stock Purchase Plans

These plans allow you to buy company stock at a set price. This price is usually based upon the stock market price of the company stock on one or sometimes two specific days every year, possibly with a discount percentage (such as 10 percent off) as well. If you choose to participate in this kind of plan, the company will do regular withdrawals from your paychecks for the stock purchases. This money is post-tax—that is, taxes have already been withheld for it from your salary. However, any profits are considered capital gains and will be taxed accordingly. So if you sell any of this stock, you'll pay capital gains tax on the difference between how much you paid for the stock and how much you sold it for. Usually there's a cap on how much stock you can purchase in the employee stock plan, based upon a percentage of your salary.

Stock Options

Employees benefit when the company gives you the choice (or "option") of buying company stock at a set price. If the company is publicly traded on the stock market, the option price is usually whatever the stock market price is on the day you start work. If the company stock goes up, you can sell your shares at a profit. If it goes down, obviously, it's of no value to you at all. The incentive is for the employees to work hard for the company to increase the company's profits and stock price and therefore their own profits from stock options.

If the company is privately held, the price is based on whatever the company owners or investors have set. Privately held stock can't be sold on the open market; your employee contract may have specific circumstances in which it can be sold back to the company or transferred. If the company is already public, you'll probably get fewer options, but they'll actually be worth something. If the company is privately held, the options should be greater, because there's a significant chance that they'll never have actual cash value.

Stock options, whether for public or private stock, usually have a vesting schedule, such as four or five years. This is the schedule for how soon you can buy those stock shares from the company. The incentive, of course, is for you to stay with the company so that more of your stock options will vest!

Royalties and Bonuses

These two items are performance-based incentives that can add significant extra income to your complete package. Royalties are generally based on either gross or net sales and you have the ability to negotiate your specific percentage. Remember that you must compare apples to apples when evaluating different offers. A higher percentage rate is not the key to more money; you must evaluate the company's accounting practices and distribution channels. Remember, a higher percentage on nothing is still nothing! Bonuses are also based upon the sales of the project or completion of milestones, and they are usually an amount that is divided between the development team for a particular project. Performance incentives are clearly spelled out in the employment offer extended by the game company.


Personal Assistants, on-site daycare, education assistance, corporate legal plans, cafeteria plans, and many other perks are often available in larger, more corporate-type game companies.

Other forms of compensation come in:

  • Paid vacation time
  • Paid holidays
  • Expense accounts
  • Car allowances
  • Flexible work schedule
  • Relocation expenses
  • Special equipment, software, or tools
  • Education programs
  • Termination agreement

After you have broken down the compensation package, take time to also assess the game company and the specific position offered.

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