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Recently, I was informed by my employer, our start up company is being acquired by a larger firm.

I have been asked to exercise my shares, which I have.

The only question I have is regarding pay increase and raises.

I was told we will get new employment contracts and the new firm offers better benefit packages (as ours was very small so we barely had any).

I haven’t had a pay increase for 1.5 years, does this mean I am likely to get one ? Through our new employment contract ?

If not is it best if I ask one myself ? As I was already wanting to ask for one after 2 years.

Can anyone share any tips or experiences in this ?

Thanks

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  • The point of startup employees getting share options instead of high pay is so that you'll profit upon acquisition or IPO, right? So you should have profited from exercising the options. But now you'd have low pay and no options, which is bad. I'd definitely ask your boss.
    – RonJohn
    Feb 15, 2021 at 5:22
  • And sharpen your CV just in case they start cutting (research what the acquiring company does with acquired companies; maybe leave before the flood of coworkers reach the market), or working there is intolerable.
    – RonJohn
    Feb 15, 2021 at 5:26
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    Would be a better question for the Workplace site.
    – jamesqf
    Feb 15, 2021 at 18:17

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I haven’t had a pay increase for 1.5 years, does this mean I am likely to get one ?

No, it doesn't. In many companies, the benefits packages are standardized. They don't want to deal with the administrative effort of keeping track of individual benefit agreements. So when they acquire employees through a company acquisitions, they will standardize their benefits too.

But the same does not apply to salaries, as those are usually individual agreements. You now have a new employer who has no idea how good you are. They have no way to tell if you are being under- or overpaid. So they will likely leave all the salaries as they are until they made some experience with you and have good reasons to adjust them.

If you have good evidence and arguments why you deserve more money now, then you could of course always start a negotiation from your side. Some tips for engaging in this negotiation can be found on this question on workplace stack exchange. But when you don't ask for a raise, then it's unlikely you are going to get one.

You know the old saying "Good things come to those who wait"? In the workplace, that's a lie. Good things come to those who ask for them, and are not too willing to accept a "No" for an answer.

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    In my experience, many companies are stingy with raises. The best way to get a raise is to find a new job that pays you more.
    – new name
    Feb 15, 2021 at 14:07
  • So in a nutshell im utterly screwed 😂
    – H44k
    Feb 15, 2021 at 16:26
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    The acquiring company will often sort the acquired employees quickly into a few bins: essential to the success of the merger, redundant but harmless, and recalcitrant/harmful to the success of the merger. You can position yourself to be put in the first bin, by being helpful and welcoming to the acquirers. Regardless, as others have said, it's a good time to interview elsewhere. If you end up in the first bin, you can negotiate a higher salary. If not, you can move to a new job.
    – Orange Coast- reinstate Monica
    Feb 15, 2021 at 20:58
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When a small company gets acquired,

very unfortunately,

  1. It's totally common that employees get utterly, totally, completely ripped-off.

It is true that

  1. In some cases, everything works out great. You keep your job, and get better benefits and so on.

Very unfortunately, (1) is much more common.

Some points,

  • You mention that your boss "told you" you will keep your job. Unfortunately words mean, utterly, nothing. Nothing.

  • You mention that you have not had a raise for an incredibly long time. Very unfortunately the new company does not care about that at all. At the new company (if you even have a job) if you tell someone there "Oh, I did not get a raise for a long time at the old company" unfortunately they will just look past you to the wall behind, it means absolutely nothing to them.

  • The entire point, the whole raison d'etre of combining two companies is that ............ you can slash costs, ie, fire people. If you have two logo designers, you now only need one, if you have two PHP Wizards you now only need one, etc.

Again, sometimes when there's an acquisition like this, everything works out great for employees, but, typically not.

The best and really only way to get a raise is to aggressively seek for, and ideally get, a new job. Best of luck.

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    "The entire point, the whole raison d'etre of combining two companies is that ............ you can slash costs, ie, fire people." Unless you're expanding; typically it's the back office people (HR, accounting, etc) who are let go.
    – RonJohn
    Feb 15, 2021 at 18:36
  • an excellent point, @RonJohn
    – Fattie
    Feb 15, 2021 at 18:53
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Large companies often have fairly rigidly defined pay structures. They look at what each employee does, assign them a pay grade, then pay them something between the minimum and maximum of that pay grade.

The way you'd get a significant pay rise is to be promoted to the next grade up.

That doesn't mean you can't ask for a pay rise, but you're unlikely to get anything above the maximum they have set for your grade.

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  • "The way you'd get a significant pay rise is to be promoted to the next grade up." I'm not so sure that's always true (having received some "equalization" raises).
    – RonJohn
    Feb 15, 2021 at 18:59

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