Charles Revson, legendary founder of Revlon, had a method to his madness. He would take a $75,000 executive and offer them $125,000 or more knowing that they would increase their lifestyle to that spending level. He also knew that once that happened, he would own them. They were then at his mercy. He thought nothing of calling people at all hours of the night. On Saturdays he would frequently call executives at home and demand that they come to a Sunday meeting, often at his home in Premium Point, New Rochelle – His attitude was that if you don’t come in tomorrow, don’t bother coming to work Monday because you will no longer be employed here.
That methodology still exists at many companies and even a few ad agencies. There is a reason why companies will overpay for certain jobs - jobs where long hours are the norm, jobs working for difficult supervisors or jobs working with difficult clients. (As an aside, this is one of many reasons why employees should not compare their salaries or their jobs.) The decision to pay more than the going rate is often well thought out. Ad agencies know that once someone accepts and stays in such a job, even for a short time, it will be difficult for that employee to leave.
The other situation where this happens is when an overly aggressive candidate pushes themselves into higher and higher paying jobs, before they are really ready to perform at that level. They are often in a race against themselves and their friends and acquaintances.
Over the years I have dealt with many aggressive account people who have pushed themselves, often getting way ahead of where they should be. I remember an account executive who lied about her salary and may have exaggerated her experience. She took an account supervisor job, but came to blows with her account director because she could not perform at the level that was expected of her salary. She was let go and was out of work for a long time. I am sure her supervisor told people that she was incompetent and that hindered her ability to get work. It wasn’t that she was incompetent, quite the contrary, she just got ahead of herself and lacked the experience to handle the responsibilities that came with her level. Unfortunately, when she finally took a new job, she repeated her mistake. Again, she was fired. She ended up leaving the business. In this case, two strikes and she was out. It is a very common occurrence.
Back in the late 1999, when agencies were flying, a $45k account executive was hired as a $65k supervisor. I told the HR manager that they did not have to pay this much, but her attitude was that they really liked the candidate and did not want to get into a counter-offer bidding war. Bidding for good candidates was very common back then. Unfortunately, when business turned slow, she was the first casualty because she could not perform at the level for which she was hired.
I am afraid that just the other week I made an account person very angry when I told her I could not represent her. She was only three years in the business but swears she is making a base of $60k and received a 50% bonus (she offered to send me a copy of her pay stubs). I believe her and I also believe that in her case she is very competent and probably worth the money to her current employer, but she is just making too much money for her time in the business. She is now looking for an $80,000 – $100,000 job.. Advertising unfortunately rarely pays people that kind of money for so little experience. She is working at a difficult agency on a notoriously troubled and demanding account and her client likes her, which is apparently rare for that client. It is in the employer's interest that she stay. I am sure that her employer took a calculated risk when giving a $25,000 bonus. He knows she cannot go anywhere.
Now this candidate is in a very difficult position. I know that my clients would not pay what she is looking for so it would be a waste of time both for the company and the candidate. Her current employer has basically trapped her and until her experience catches up with her salary or she decides to move laterally, she is pretty much stuck.
The point to all this is if someone offers you a lot of money, you have to find out why and what it means. There is generally a reason why the job is paying over market.