In the past year, the demand for new talent within the life sciences sector has substantially increased due to industry advancements and various state-sponsored programs aimed at building and retaining the life sciences sector in Massachusetts. In this ever-changing environment top professionals are finding tremendous opportunities for career growth. Changing positions is commonplace within the industry and these changes can be made for personal growth, increased compensation or simply because the opportunity is too good to pass up.
Amidst change, it is essential to keep your personal and financial aspirations top of mind. There’s more to a compensation package than just a base salary.
Here are three key tips to consider during your transition to help you avoid a financial pitfall:
1. Know your current worth: Assess your current net worth including all assets that are vested benefits from your current position. For example, consider 401(k) plans and various long-term incentives. Take inventory of your non-vested benefits that you will leave behind such as unvested RSUs, stock options and your current long-term incentive plan. Estimating these components will help you while negotiating a new offer.
2. Negotiate: While discussing your new offer, use your current incentives as the base for negotiations. Take into consideration all aspects of the new offer: the proposed compensation and target bonus structure, equity compensation plan, severance package, and 401(k) matching contributions. Remember that deciding on equity compensation structure should be partially based on the information you have about the company’s future growth potential as well as your own personal financial standpoint. Making these decisions from a taxation point of view is an important part of suitable planning.
3. Plan Your Transition: Develop an action plan that will ultimately help you with all aspects of your transition. After you accept a new offer and are then in transition between jobs, allow yourself a few weeks, if possible, to cross off important action items such as: rolling over your “old” 401(k) plan, exercising stock options and meeting with your advisory team who can help you with implementation.
Transitions can be emotionally draining. It’s important to remember what is truly important. Before you decide on switching positions, consider why you want the change and how it will benefit you and your family.
“May your choices reflect your hopes, not your fears.” - Nelson Mandela