Tuesday, June 18, 2013

Be Careful Of Jobs That Overpay

                 100 Dollar Bills Stock Photo

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.


  1. Paul, very interesting article! Not being too many years into my career but being a senior account manager, I feel that a lot of the times employers look for experience in the sense of 'years' not accounts or projects people have worked on. I recently read an interesting article on passion vs experience, and I strongly believe that agencies should look at what people can bring to the table in terms of work previously done, not years previously worked.

  2. Peter: That is very true and I fully agree. But advertising is no longer a high paying profession. In general, ad agencies like to keep pay and age in line with each other, particularly for people under thirty. Unfortunately, people have a habit of telling each other what they make (they often exaggerate) and this causes huge internal problems when an account person finds out that someone with comparable year's experience is making considerably more (or less).

  3. Ah, the golden handcuffs, the velvet coffin. Creative people are often seduced by the agency that has never done good work but supposedly "wants to change" and offers ridiculous money to someone with a good book. Once they get there, it's obvious that nothing is going to change, one's book is getting staler by the day with no way to add to it (except freelance) and the new salary and lifestyle are constraints against truly growing to one's full creative potential.

  4. Claudia: Well said. Hard to teach an old dog new tricks.

  5. Great article Paul-- it's really a tricky situation and important for candidates to be fair when putting in salary requirements. It's also hard because of the agency model-- many people often leave once they get a higher title to get a higher pay bump. The people still at the same agency assume more work, more responsibility without the recognition or the monetary incentive. In general though I've always thought that no matter where you were in a company or industry paying your dues was mandatory!

  6. Sophia: One of the problems in ad agencies is that everyone accepts the fact that an employee has to leave in order to get significantly more money. Counter offers are rarely counter offers because most agencies will only match a new offer but won't go hire. (I posted that a long time ago). Paying dues is also not a matter of money, it is about learning the rudiments of a business and, indeed, it is mandatory.

  7. I received a very valuable piece of advice as an assistant account executive: live beneath your means. Partly because layoffs are so common in our industry so I wanted a savings cushion, and partly to avoid exactly what you discussed. This has enabled me to take jobs with pay cuts and not worry about it.

    One of the best pieces of advice I ever received!

  8. @Anonymous: I never heard the expression "live beneath your means" but I love it. My accountant, many years ago, told me that I should look at savings as an expense so that I always had a cushion. He said, "If you have f--k you money, you will be a better account person because you will make better decisions if you are not concerned about being fired." And, as you point out, it allows you to take jobs based on opportunity rather than money. Thanks.


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