Pay negotiations are always delicate, with neither side wanting to show their hand too soon or offend the other party. But savvy European managers are using finesse and assertiveness to bargain for packages that compensate them for their worth on the global scene.

At senior levels, most elements of pay are negotiable, from base salary to the criteria on which a performance bonus is based to perquisites, says Brad Dewey, managing director of European operations in London for Christian & Timbers Inc., an international search firm. While European executives have been bargaining over pay for years, talks in Europe don't resemble the "in-your-face" style of New York executives and usually are conducted with cultural subtlety and politeness, says Mr. Dewey.

The most effective discussions occur when both you and the company share similar goals and objectives. In other words, what's good for you pay-wise should translate into increased company profitability, revenues or other benefits as well. You also shouldn't start negotiating pay issues until there's a clear understanding that you plan to come on board -- assuming the compensation details can be worked out.

Heinz Brasic, chief executive officer of Upaid Systems Ltd., a global telecommunications payment-settlement software firm based in Paris, is typical of European executives who are attracted to companies that reward performance. For Mr. Brasic, who came on board last year, stock options are the most important part of his package, and he agreed to take a salary lower than he earned previously as a senior manager at Telecom Italia in Rome and agreed to accept more stock options from Upaid Systems.

In addition to compromising on his monthly income, Mr. Brasic also agreed to forgo a company car for personal use. In return, he received several hundred thousand stock options that vest over a three-year period.

"The long-term future rewards will be greater and it's all about my own performance," says the 45-year-old Mr. Brasic, "so I have a strong influence in the success of the company."

Widely Differing Pay Practices

Compensation elements and practices vary among countries, in part because of differing laws, pension and tax issues. Start-up companies are more likely to offer greater rewards for performance and stock options than bureaucratic established firms. U.K. companies are more like their U.S. counterparts, in that they might offer top executives several types of incentives. Continental firms are more conservative and likely to offer one type of bonus.

U.K. firms also are more likely to offer stock options, although companies in Germany, France, Italy and other countries are initiating stock options as well. But in France and Germany, noncash rewards taxed at lower rates and tax-deferral arrangements are sometimes more highly valued than stock options. This is because a marginal tax rate of about 55% kicks in at about 44,983 euros in France and in Germany at about 58,643 euros for single wage earners and 117,286 euros for married couples.

"The real issue about pay in Europe is how all the pieces relate to the taxation," says Annette Carroll, an executive-compensation consultant with Hewitt Associates in Brussels. "In any European country where tax rates are high, being able to provide compensation in a tax-effective manner is a plus."

Given these caveats, here's what compensation and human-resources consultants and executive recruiters say you should know before you discuss pay with an employer to ensure the best possible deal:

Remember that it's a global market now.

Competition and the erosion of global barriers are causing executives to become international commodities and for companies to view their pay on a worldwide basis, says Judith Fischer, managing director of Executive Compensation Advisory Services in Alexandria, Virginia. In the European community, local barriers to hiring and employment are breaking down, and European executives are crossing borders. This means their worth isn't restricted to market rates paid by companies in their home country, says Ms. Fischer.

"The old parameters are changing very quickly, and the first thing an executive should know is what's being paid to similar executives worldwide and the value of his or her talent worldwide," says Ms. Fischer.

At Upaid Systems, for instance, executives are compensated on both a European and global basis, in part because the company has subsidiaries and partners in Asia and South America, says Mr. Brasic.

Understand the firm's pay plan and structure.

Learn how the company plans to pay you, for instance, whether you'll receive a salary, bonus and a longer-term incentive, such as participation in a stock-option plan. Get to know the company's pay philosophy and how much it believes in pay for performance. Find out the percentage of your pay that will be risk-based, meaning you don't earn it unless you and the company achieve pre-set goals.

In the U.K., for instance, bonus-plan payouts typically are based on an exact formula, so that employees know at the outset what they'll earn at the end of the year for achieving their goals, reports Watson Wyatt Worldwide, a Washington-based consulting firm. German executive-pay plans often are straightforward, usually including a salary and bonus based on company and individual performance and a car, says Suzanne Walter, president of B.I.P. International Human Resource Consultants in Hanover, Germany.

Do some research to find out about typical pay practices in your industry and country. General information on what companies pay may be available through published surveys, such as Watson Wyatt's "Global 50 Remuneration Planning Report." English companies usually disclose pay for senior executives in annual reports. French and German companies aren't required to disclose information about executive pay, but public companies might include information in their annual reports. In lieu of published information, ask about the pay program during your talks with company officials, says Mr. Dewey.

Know the geographic scope of the job.

Obviously, the more geographic territory your position entails, the greater its pay package is likely to be. European executives often have multi-country responsibilities. For instance, in Brussels, positions often are Benelux jobs, with oversight for Belgium, The Netherlands and Luxembourg, while U.K. jobs often encompass Ireland as well. If you have responsibility for more than your home country, "there should be some sort of premium paid on that," says Ms. Carroll.

When interviewing for the new job, have a discussion with your manager about how the company views the market for that particular job. Is the scope a single country or multi-country? A scope that goes beyond your home country adds complexities to the job that might justify additional compensation.

Become familiar with stock-option plans.

Stock options, a relatively new offering among European companies, give employees the right to purchase company shares at a certain amount, usually for less than the market price. Option gains are taxed at different rates and at different points in time, for instance, at the grant date, at exercise, or when the stock is sold. In Belgium and Switzerland, employees are taxed on the potential gain on the option at the time of the grant. It's possible you could pay the tax, only to see the gain wiped out down the road.

Although some German companies offer stock options, executives aren't as interested in this pay component because so many plans are under water and valueless. "Because the market is down so much, it's very unimportant," says Ms. Walter. "They don't like it not being worth much now and to wait for the gain down the road."

Buoyed by the dot-com craze and tales of wealth in the U.S., most senior executives at early-stage European companies took significant cash pay cuts in return for large equity positions just a few years ago, says Mr. Dewey. Now they're more cautious and are asking for large equity positions and large salaries as well. "The cash portion of pay has become more important as the equity portion has become more suspect," he says.

Mr. Brasic calls himself the exception to this trend and says stock options help Upaid attract the kind of managers who are determined to make the company successful. "Everyone is contributing to the same goals," he says. "What can be achieved for the company can be achieved for their pocket."

Learn about other aspects of the company's pay plan.

Your discussion also should include information about pension benefits and perquisites and such practices as noncompete clauses, employment contracts and termination notices. Find out what the company provides in supplemental paid medical and dental benefits and pension contributions in addition to the statutory minimum pension contribution.

"You don't want to come across as being driven by the pension plan, but you can say, 'Can you tell me about your standard terms of employment and give me a copy of it?' " says Mr. Dewey.

In Germany, supplemental retirement insurance in addition to contributions to the state pension scheme is a highly valued benefit. Likewise in The Netherlands. In both countries, the government pension plans are underfunded, putting their future on shaky ground. "Social retirement insurance isn't doing well, so this benefit is important to executives," says Ms. Walter.

Ask how long executives receive pay following a termination without cause. Will you be paid but not allowed to work for a certain period? How does the company's termination policy work if you quit vs. being let go? "All these things are negotiable the higher up you go, but know the policy first and assess whether it's standard or there's some flexibility," says Mr. Dewey.

Determine where you might be able to negotiate.

Most companies don't like to pay in excess of what internal salary structures say a position is worth. Nor do they like to pay new hires more than what loyal veterans are earning. However, they might increase the number of stock options you receive or trade some of your cash compensation for equity, says Mr. Dewey.

They also may be open to increasing the size of your bonus in return for performance gains. This can be especially rewarding if your bonus plan includes an "accelerator" -- a provision that stipulates that your payout gets larger for every increase in revenues, profits or other measure you generate above your target.

If you think achieving your target won't be feasible in the first year -- for instance, if you are coming into a turnaround situation, starting a new operation or being asked to introduce change -- you might want to request that your first six months' or year's bonus payout be guaranteed, says Mr. Dewey.

If the company says it can't offer more, consider requesting an early performance review so you can secure a raise earlier than usual, says Ms. Walter. "But be sure to put it in written form, that salaries will be negotiated again in six or 10 months," she says.

Consider tax implications of the package.

If the capital-gains tax rate in your country is exorbitant, you might not want more stock options. A tax-saving approach might be to ask for part of your bonus to be placed in a deferral arrangement so it isn't paid out and taxed until later, or to have it placed in a retirement program, says Ms. Carroll. Or you could hold out for nontaxable benefits, such as private-school tuition payments for your children, a company car or monthly fuel allowance. Although German companies usually provide cars to executives, some executives ask for and receive upgraded accessories, such as air conditioning, stereo systems or leather upholstery, says Ms. Walter.

Determine your deal breakers, but be reasonable.

Before going into any pay negotiations, decide what's most important to you in your new role. At the same time, don't ask for pay amounts or elements that are beyond the company's ability to provide. Executives who move to a similar job at another company in Germany normally can expect to receive a 10% increase. The increase might be greater if they're being promoted to a higher-level position as well, says Ms. Walter.

"You can't ask for what someone makes elsewhere if the company isn't able to pay that amount," she says. If you want the job, don't ask for more than a company is willing to pay. "If a candidate is good, it will show in the first six months and then you can reopen the talks again."

For Mr. Brasic, the deal breaker was intangible. He needed to feel he was part of the company's founding team and would have the freedom to drive the operation. "If I hadn't felt that, I would have walked away from the discussion," he says.