So, it's been a while since I've last posted here. I wanted to provide an update on my situation and maybe give others that are in my situation with some ideas.
Here is what happened since July. I got an offer from one of the companies I was interviewing with. It wasn't quite close enough to my desired target, but it was more than I was making at my current job. I was seriously considering the offer, even though it would have lengthened my commute by over an hour and put me into a higher cost area during work (major US city vs. suburbs). The biggest drawback of the new position was the significantly worse health benefits, non of my family's doctors where in their network and they didn't cover out of network expenses. We did contemplate to do COBRA, which apparently you can if you leave a job and your new job has worse benefits. But doing that, along with the added commute and expenses would have eaten all but the salary difference. I negotiated hard to get the offer raised up, citing my concerns about health coverage, but this company didn't budge. In the end, I politely declined their offer.
During the same week, I had a meeting with my recently appointed director, laying out my dissatisfaction with my current compensation. He didn't know until I told him how little I was making and agreed to propose a major boost to the C-level of the company. This is all back in August.
I've gotten word yesterday that my base will get a boost of about 25% starting January, and my variable compensation target will go up by 60%-100% from what it is now, depending on what the board decides for next year.
In addition to that, my current company is also moving its offices to within a mile of my home, which will make commuting a non issue since I'll be walking/biking to work soon.
This new deal still doesn't quite bring me to the same level as what's customary for my field, however, it at least sets the right tone and I am satisfied with the outcome.
What I learned from this is that there is nothing wrong with asking, but be prepared with arguments on why you deserve more than you get right now (in my case, it helped that I've been an integral part of how the company delivers product). Also, sometimes patience pays off in the form of a nearly eliminated commute (I will still travel quite a bit for work, so we can't part with having two cars).
I hope my story can help others and serve as encouragement, even in a down economy, one can successfully negotiate raises.