US companies and salaries

[Muffinbuttered]

About 18 months ago, my DH was hired into a smallish European company. Soon after, it acquired by a much much bigger and richer US company, so now pretty much everything runs out of the US - HR, payroll etc - all fine.

When DH took the job the salary was on the side low for his level of experience in his sector. However, it seemed like an exciting opportunity in a start-up type business and DH was happy with this.

However, when the company was acquired the European salaries have in no way changed since (apart from the founders of the company who of course made individual millions from the sale!) So salaries are not reflective of the fact they are now backed by this huge company and what's more, DH's US colleagues are paid much, much more than their European equivalents. I'm talking people being paid close to double over there (yes, I'm taking into account exchange rates).

Now, I KNOW US companies pay higher salaries to employees in the US because of healthcare needs etc etc, but this seems extreme and I can't help but think DH is being screwed over a bit here, because even if the salaries are going to be higher over there, my understanding is that US companies tend to pay their employees generously wherever they are based - which certainly isn't the case here.

DH thinks I'm wrong and this is just how it is. If anyone has any experience or thoughts I would love to hear them!

Is his salary competitive for his UK contemporaries in the same field with same levels of experience? If his job was like for like with another uk/Europe based employer would it be pretty much same pay?

Is ask because how salary benchmarking and comparisons usually work is looking at the location of the job too so with the cost of day to day living/taxes/insurances higher in USA this plays a role in the benchmarking and USA_UK counterparts don't necessarily need to be paid the same

I've worked for a US company before but we didn't discuss salary differences between countries.

What I did notice was that when the company closed down and everyone was made redundant, UK workers received the equivalent of 6 months' salary plus bonus whereas the US workers got 2 weeks.

I work for an American company with sites across 3 continents. We get paid according to location norms, we don't all get the same. This is standard.

@BeeBelle16 - thanks. DH's salary is low-ish for his sector here in the UK. It's not shocking, but definitely a bit lower than average, which can often be the case for startups operating out of European countries. This is the trade off that he was happy to make when he took the job - lower pay for the excitement of becoming part of a newer, growing business.

But now, his small business is part of a much bigger business...and nothing has changed. He doesn't mind at all being a smaller cog in a big wheel (despite the fact that this isn't what he signed up for), but is it wrong to expect that he would see some benefits of this?

@whirlyhead - I know UK workers have much better protection (and this is another reason why equivalent salaries are so much higher I guess) but this still seems unfair for DH's position.

Your DH needs to consider peer salaries in the UK, it doesn't matter if the business is a US one...salaries reflect the country you are domiciled and working within.

@LubaLuca - thanks. I know it's standard that people are paid according to the market they are already in, but my question is that surely now being backed by a rich US company should have some impact on the employee renumeration wherever they are? It's no secret that people who work at say, Google or Bloomberg in London are going to earn significantly more than people in the same roles in smaller, British companies...

@Valhalla17 - yes, but given his salary was on the low side for the market because it was the small European's budget at the time of hire, isn't it reasonable to expect that should change now DH is effectively employed by a different (and much richer) company?

You have to take more than conversion rate into consideration when comparing UK and US salaries.

US have less annual leave/sickness than U.K peers, they have health insurance to pay, cost of living is different, pensions, and Tax are different.

I work for a global org and when you look at salary benchmarking it's very different across the varying states in the US because each state has its own ways of paying tax and tax amounts, as well as general cost of living.

If your DHs salary is low compared to UK benchmarking then he should ask for a salary review but he needs to compare across the U.K. not with the US.

Hi op. I work for a global company in a role where I am aware of salaries. We've also gone through a number of mergers and acquisitions. I don't think your dh should expect because there's more money in the pot, so to speak, that he'd be due an increase. That's not what increases are based on.

He should though address it if he is underpaid for HIS role and location. If the company want to increase him on that basis then they will, but discussing it with his bosses in the context of having been taken over / US salaries will fall on deaf ears and would not be a very good look.

(I say all of this having managed people in the US and in other countries who earned a fair whack more than me, so I do understand how galling it can feel!)

Possibly but I also assume some of that is determined by the acquisition deal and what was agreed within that with the ⁰founding partners and the acquiring company. Maybe doubling everyone's pay during acquisition was not viable for example and more salary "calibration to market" will happen over a certain time frame.

I have worked in multinationals for thirty years and also in finance at a group level and so have a good understanding of salary costs in different countries. I have also been through a couple of take overs. And no, it absolutely is not standard to review and increase the salaries of existing staff just because of a take over. If the salary was fair before then it is fair now, if it was a bit below before then it is a bit below now but that is something for your husband to negotiate regardless of the takeover. Your husband is definitely correct.

He needs a salary review based on UK average and the productivity of his division.

Like all US employees he also needs to keep his resume current and he needs to constantly be on the lookout for better paying opportunities elsewhere (preferably with a signing bonus).

US employees on double UK salaries is perfectly normal. It certainly is in my industry. He needs to be looking at his salary from a UK perspective only

Sorry, I wonder if in giving so much detail I've been a bit confusing! To be clear, I totally understand there are reasons why salaries are higher in the US, and there are reasons for that. But I also understand that big US companies generally pay all global employees quite well - at the higher end of what is standard for the market rate in that country, if that makes sense.

So am I wrong to think that - particularly given that DH's 'original' European employers KNEW that DH was being a underpaid for his role here in the UK - they should now be making efforts to bring his salary at least in line with the market rates (or even, pay quite well now they are backed by a big multimillion dollar business 😂)?

“But I also understand that big US companies generally pay all global employees quite well - at the higher end of what is standard for the market rate in that country,”

OP this is a sweeping generalisation and not necessarily true IME. If he’s underpaid for his market then he needs to talk to his boss or look for a better paying job.

DH is in a senior position, and it just seems a bit questionable that the European company hired him according to their budget at the time, which was known to be UNDER what is average for similar roles in London. That was part of the trade off for working for a smaller, interesting, growing company.

Now he's not part of a small, interesting, growing company - he's part of a big established company - that can and does pay their US employees generously. But zilch has changed for DH over here, which doesn't seem right to me.

He should only look at how well paid he is in his location, if it isn't a fair rate then raising it is fine.
As is looking for another job.

US salaries are high because you have substantially more living costs to cover than in the UK. We are Brits living in the USA so have experienced both.
You also have very little job security so have to factor that in as well.
To get more leave than two weeks I have to start using unpaid leave.

There is nothing to stop your DH asking for a pay review but most Americans I know would love the pay and benefits of Europeans.

Depends on the uk salaries of his new company and what his salary is like compared to those peers. If he feels he isn't being paid fairly or according to the market he should pick it up with his bosses to ask them to review.

@HermioneWeasley - perhaps a bit sweeping admittedly. But I know a fair few people who work in London for US-backed law firms, banks, tech companies, TV companies...without fail they earn slightly more than their counterparts in British or European companies. Not shockingly more, and certainly not the same as their US colleagues, but definitely NOT less...and this is what bugs me.

the OP is naive in the extreme. If he want more cash he should ask for it but large US corps are not famous for being unnecessarily generous

It isn't unusual for a multi national to aim to pay in a certain percentile band in each country it works in.
If your DH's company does this and they currently aren't paying in that percentile in the UK they may gradually work on that.
But the company has just bought your DH's one so isn't going to look at increasing costs immediately on top of that expense I wouldn't have thought.
Adapting bought companies to the new parent one takes time, like turning an ocean liner.

@maybebalancing - yes I'm certainly not knocking the benefits we have here, not to mention the NHS ❤

but it just irks me that they effectively 'sold' him a slightly underpaid job and now they are in a position to pay him better, they are not doing that. Unfortunately DH is very 'english', hates discussing money looking grabby 🙄 - and with the cost of living/inflation/mortgage rates etc we are struggling a bit.

It's bugging you but does it bug DH...if yes then HE should speak to his bosses. I assume he can speak for himself.

@maybebalancing - also, it's not totally new. US acquisition was over a year ago - DH had been there less than 2 months when it happened (which also makes me think it was shifty of his then-prospective employers not to tell him as they would have known it was in the works!)

@Valhalla17 - yes of course he can speak to them, and it's up to him to sort his salary out. But I'm trying to get a handle here on whether or not what I think is correct/reasonable...because personally, I think he's being a little bit shafted.