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!

A year is new in terms of acquisition.

There are significant costs in acquiring a new company, logically a random pay rise is unlikely to amongst the first things that happens.

If your DH wants a raise he needs to pull together a case based on local market data. But if he is new in post himself this may impact how big the rise he would get.

Also it is highly likely that the staff who knew about the takeover/buyout would be under an NDA so wouldn't be able to tell people joining the company about it.

I work for a large US company. Pay is benchmarked by location. Some of the US members of my team who report to me are paid more than me because of where they are based. He could look to be benchmarked against employees of that big company in his country.

@maybebalancing - thank you. Totally valid points about a year not being long and the NDA. But I just get the uncomfortable impression that they've locked him into what is a quite a poor salary for his level here in the UK, let alone a role that is backed by a big US company 😞

You sound way more bothered about this than your DH. There is no way this company is going to hand out extra money unless they have to. You also sound pissed off with your DH that he is accepting of this. Not sure if it’s remotely the same but my DH worked in a senior position for a local firm which was then bought over by a multinational firm based in Canada, no wage increase, 3 years later they closed the whole office down and he was out of a job. Shit happens!

It does sound like your DH needs a pay rise if his pay is on par with small start up type salary. People usually take those salaries because there is a chance of a great pay out if you get equity and there is an IPO or purchase, but seems like that didn’t happen for him? He should just apply for a similar job at a different company (presumably get a better offer of salary) and let current company make a counter offer to keep him. But sounds like he isn’t very bothered about it!

@Resentful2023 - there wasn't much to benchmark him against as he was the most senior London hire. The European company roughly benchmarked against other salaries in the UK industry - but at the time were transparent that their offer was on the low side, and they claimed they were going in at the max of their own budget. Just leaves a bad taste, given what happened shortly afterwards and they haven't done anything to change things.

The low employee costs could have been part of the reason the US company was interested in the first place. Companies generally pay as little as they can get away with.

@Pinkpots - I am bothered because DH's income isn't quite what it should be and it impacts us as a family. I also think that they have slightly screwed DH over in how they handled it and what they offer him.

@mosiacmaker - yes that's kind of my point. Although DH wasn't in right at the start so wouldn't benefit from the big IPO or payout, he was still 'sold' a small growing company, and the opportunities that tend to come with that, when he took the role.

I work for a company owned by the second largest private company in the US.

We pay according to the local median, sometimes below, sometimes more depending on what people will take.

We have a whole department that provides reports to Managers for this exact reason.

I mean ask the US company to benchmark against all their UK employees. Or are they the only ones? You may find there are other benefits that come along with the change - bonus, shares, etc. But it's no harm in asking for a review from the US company benefits team, not the smaller company. However sometimes companies are acquired with the intention they are still run as a standalone and not integrated. In that case then he's probably stuck.

If he can show he's not being paid median at least then he should put together a request for a raise with data showing why and outlining his value.

Ultimately you have a DH problem not a DH employers problem.
He can ask for a pay raise based on location norns and more importantly what he has achieved in the last year since acquisition.

But I've worked in multinational tech companies for decades, if you can acquire cheap then brilliant, helps your bottom line and keeps things within budget so sorry to be blunt but he - nor you - should expect someone to offer him more just because of the acquisition.

You’re comparing apples with pears by comparing European salaries with US ones.

What the US employees earn is irrelevant the question is whether it’s competitive in the jurisdiction your husband works.

Being acquired by a larger company doesn’t automatically mean your pay should increase either. A company I worked for got acquired by a large American company and I didn’t expect an increase just because of this.

Yes it must be annoying to be in this position because I suspect some of the reasoning of taking a lower salary at the start would be to benefit as the start up grew and he may have benefitted from growth and stock options etc. Now that possibility has gone because of the takeover. The way to rectify this is for DH to approach them and ask for raise based on the "opportunity" no longer being there for him to capitalise on and therefore he expects current market rate. He should gather comparable as to what they may be. However he should also decide beforehand whether he is prepared to move elsewhere should they say no. But often its a case of you don't ask you don't get.

Do they intend to consolidate roles post-acquisition? Is it likely that senior roles are going to be repatriated to the US? I would be wary because they have more options than the small company did re: senior people. The stagnant pay may reflect that.

Of course if your DH had equity that got paid out or is promised, that could be in lieu of pay growth.

If not, then I think you’re right to be wary about the lack of growth but not about relative pay as the US market really is different. For instance he would expect to be paid more than a manager in India. Different markets, different stories.

OP again, this is not how the world works. As mentioned I have worked in multinational financial services for thirty years, in finance and through takeovers. Companies don’t take over another company and then increase everybody’s salary in the acquired company. If anything, they are looking to make economies of scale. They didn’t buy the company to pay people more, they want the acquired segment to be more profitable than it was before not less profitable.

If your husband is paid less than market, then that is on him fo tnot negotiating better when he accepted the job.

@Savoury - no, there's not a risk of moving existing senior people here to the US. One of the reasons the US company bought the European company is because they want insight and presence over here...

@Aprilx - sure, I of course know that companies don't make an acquisition and then turn around and give everyone in the company more money 😂 but what I was trying to establish is, given that DH is slightly underpaid for the UK in the first place, but now works for a big US company - it would be reasonable to ask for a salary that is more in line with a)the market and b)a company of this type?

Op it absolutely is fine for your DH to establish where he thinks he should be in the UK job market, including benefits etc, then to speak to his boss as to whether it is possible to get him there in this company.

But your DH needs to read the room first and approach any such discussion with the facts.

That said, your posts suggests that while you want him to do this, he may not feel the same way

Agreed.

I work for a US firm. Pay is benchmarked by location.

US leave and benefits are close to zero, the salary packages are not really comparable to UK packages

It’s irrelevant who the company is owned by and what the US employees earn

You cannot compare them as the terms, cost of living, etc are not like for like

When we lived in the US my husband earned considerably more for exactly the same job at the same company as when we moved back to the UK, but our housing, healthcare, was also then lower

it sounds like he is happy with what he is being paid compared to other similar roles

if he’s not then he should look for something else

If you DH works in London for a law firms, banks, tech companies, TV companies then he should bench mark his salary against those and then decide if he needs to change employer for a payrise. Whether the mother company is US or not doesn't really come into what he might want to do next ?

thanks all - I do know that salaries are benchmarked according to location, not the company as a whole.

My point/question is that surely it is reasonable to expect that if one works for a company that is small, with limited budgets that can only afford to pay up to a certain level (and the salary was known to be low for that particular location for the time) - and THEN that changes so one is now working for a large company with far more extensive budgets - it’s not unreasonable to expect that a salary should be brought in line with the market now.

Plus, as an aside - though this is not the main point - it does seem that global US companies pay their employees a bit more generously than average whatever the location. A London TV exec working for say, Apple will be slightly better paid than someone doing the same job at ITV…it’s just what I see in the industries I know.

He needs to ask for a raise based on UK equivalent roles. Unlikely it will happen otherwise