Office Hours: American Teacher’s Shortage, Why You Shouldn’t Have a Side Hustle, and What to Do if Your Employer Wants to Defer Your Pay

Salary Deferral

In the real estate industry, salary deferral is a common practice, especially among startups. Scott Galloway addresses a listener's concern about being asked to defer their salary in a real estate group building hotels. He explains that while cash flow issues are typical in young companies, it's crucial to assess whether such requests are appropriate and common in the industry 1.

It's easy to feel like you're falling behind. I know that I am constantly benchmarking myself against other people, and even as I get older, it's something I struggle with.

--- Scott Galloway

Scott suggests that employees should carefully consider the implications of salary deferral and whether it aligns with their financial needs and career goals.

   

Negotiation

Negotiating deferred salary requires understanding the risks and potential rewards. Scott advises that if a company asks you to defer salary, they should offer compensation for the risk you're taking, such as equity or additional benefits 2. He emphasizes that employees are effectively investing in the company by deferring salary and should be treated as such.

You're not a bank, for God's sakes. And quite frankly, if they don't see the merit in that and they just want to defer your salary and they kind of wave off the conversation, I would start looking for another job.

--- Scott Galloway

Scott suggests consulting a real estate attorney or senior company member to ensure fair compensation and to protect one's financial interests.