@neuric If this is an offer from a company named after a way of producing textiles, the offer isn’t strange, it’s just having to compete for talent with the US, where equity compensation is the norm and dramatically inflates on-paper salaries. That said, yes, your instinct is correct in that it is a form of cost control; they’re only committing to paying you ¥9.1M, so if the company has a down year, you will make less then the other offer.
This is a pretty standard risk to reward trade off. With the high bonus offer, you could make a lot more, but you could also make a lot less.
There are two other things to keep in mind:
1) Future employers will generally only truly value base salary when forming an offer for you should you switch companies down the line. And your base salary even at your current company will be the bases for all your future raises, should the company do raises. It would take 5 years of 3% raises for you to get to the same base salary as the other offer. So accepting a lower base salary now not only puts you at risk of making less now, but also at risk of making less later in your career.
2) While your base salary cannot be adjusted without cause, the bonus structure for a company as a whole can be. This recently happened at my company, and it resulted in significant theoretical pay cuts for many employees. So company performance aside, bonus compensation is less “secure” than base salary compensation.
I would make at least one more attempt to negotiate a higher base salary with the large bonus company if this is their first offer and you are excited by the work. No company comes with their best possible offer initially, it’s just not how the game is played. As others have pointed out, you should request additional information about the payment structure and evaluation criteria for the bonus. Do
not mention your intention to negotiate at this point. Getting the information on the bonus structure provides a natural transition into negotiation on base salary, since almost certainly the bonus structure is based on both company and individual performance, and is likely not paid out all at once (if it is textile company, bonuses are
granted annually and paid out over 3 years in 50%-25%-25% increments, so you don’t actually make the full notional compensation till year 3, and obviously you have to be still employed on payout date to get the money). This information may also simply come as part of the written offer, in which case you can skip right to the next step.
Once you get the details about the bonus structure, if I were you, I would reiterate your excitement about the possibility of working for the company. However, respectfully illustrate the that while you appreciate the potential for higher earnings from the large bonus, a 12% lower base salary relative to your other offer is a big gap in guaranteed money; bonus are only granted annually and are discretionary, so you cannot rely on them for day to day expenses. Counter with a number less than your other offer, but slight above what you are willing to actually accept; ¥10M if you’re willing to accept ¥9.75, etc. This shows them you value the potential upside and are willing to compromise, but shows that you value yourself and you have market data to prove that value in the form of the other offer. And gives them room to come back with less than you asked so they feel like they won, while still hopefully being at least as much as you wanted so you feel like you won.
The worst a company can say when you negotiate is no. They will not retract the offer, not on a first round negotiation done in good faith. And the
only time in your career you have true leverage in salary negotiations is right now, when you have multiple offers and haven’t yet committed. So use that to your advantage, and you won’t have regrets later wondering if you could have made more.
