When negotiating a fixed salary with incentive compensation, what percentage should be considered?

When negotiating a fixed salary with incentive compensation, it is important to consider potential income because it reflects the total earnings that an individual can expect to receive. This includes both the guaranteed fixed salary and the additional earnings that can be achieved through performance-based incentives.

Potential income is essential in negotiations as it gives a comprehensive view of the compensation package. Understanding how much one might earn beyond the fixed salary—based on performance metrics or bonuses—helps in assessing the complete financial picture and aligns expectations with the employer's compensation framework.

The other options do not provide a holistic view of the total compensation package. Focusing solely on the fixed salary disregards potential earnings from incentives. Variable costs are typically related to the operational costs of a business and are not relevant to personal salary negotiations. Annual leave, while an important benefit, is not directly related to income negotiations; it speaks more to time-off policies rather than the financial component of compensation. Thus, focusing on potential income provides a clear understanding of the complete remuneration landscape when discussing salary specifics.