One of my clients recently accepted an offer as the CEO of a private equity-owned company and, at the same time, declined a similar offer.

At the time the declined offer was made, it was incomplete and thin in terms of compensation.  It also left open a key governance question. These open issues necessitated a lengthy negotiation which involved the executive recruiter and key principals of the private equity firm fleshing out the offer, bringing it up to an acceptable level, and resolving the governance issue (which turned out favorably in the end). However, because of this delay, my client was able to complete the interview, reference check, and offer process with the second private equity firm, creating an opportunity to choose one of two offer opportunities that were then in a “dead heat” in terms of timing.

In the end, the second offer turned out to be superior for two reasons. First, without getting into a deep tax discussion, more of the equity in the second offer would be ultimately subject to capital gains rather than ordinary tax rates. And second, the position was located in the Philadelphia area, while the first offer required a weekly commute to Washington, D. C. and a possible relocation in 18-24 months. While the second offer also needed negotiation, the executive recruiter and private equity firm were much better coordinated, more available and responsive and efficient in completing reference checks and producing the final and winning offer.

There are a number of key lessons candidates can learn from this situation:

Lesson #1

Don’t stop the search process if an offer emerges, but is not yet finalized. An extended negotiation process can provide a candidate the opportunity to a) uncover a potentially more attractive second offer and/or b) attain leverage in the initial negotiation process. Try to capitalize, in a nuanced way, on “dead time” during the natural back and forth involved in all negotiation processes.

Lesson # 2

Determine your “deal breakers” before going into a new negotiation. In this case, my client, who is in his mid- fifties, has a daughter in high school, and important personal connections in the Philadelphia community.  He quickly realized that a commute and a possible relocation would be highly disruptive to his lifestyle and happiness taking a good deal of the satisfaction away from garnering a new position.

Lesson #3

Don’t be afraid to turn down an offer – even after negotiating hard to improve it – if a better one comes along. Know, however, that you may risk arousing the ire of key principals, hiring managers or executive recruiters when doing so.  In my client’s situation, the recruiter handling the first offer was furious with my client, and let him know it. The recruiter initially failed to secure a complete and competitive offer from his client prior to the offer being made, creating a serious fissure that was only belatedly closed.  And, of course, he now had to find another acceptable candidate.

After working closely with my client to navigate both offers, I simply counseled him to take the best one available.  Looking at this from the other side, the company and recruiter would have had no hesitation selecting the best candidate they surfaced in the process, whether it was my client or not. And a first rate recruiter, undoubtedly, would likely have a highly qualified back-up candidate waiting in the wings.

In the end, my client and I were pleased with the outcome, and he is energized and excited about a new opportunity which holds great promise.