Last Week in Edition 24
Last week we worked through counter offers and why accepting is almost always the wrong move. This week, we go deeper on the compensation conversation itself - specifically equity, because this is where most candidates leave real money on the table, not because they negotiate badly, but because they never understood what they were being offered in the first place.
A new offer comes in. Base, bonus, signing, equity. You look at the headline number - say, $250,000 in equity - and feel great. You accept. Two years later, you realize the equity was worth less than half of what you thought it was, vested on a schedule you did not fully understand, and came with terms that quietly cut your exit value.
This does not happen because candidates are careless. It happens because no one teaches comp literacy in school and no one teaches it in most jobs. The hiring manager is not going to volunteer it either. You have to come to the conversation already knowing the questions.
The Midweek Check-In
Do you know the difference between RSUs, ISOs, NSOs, and equity in a private company? If those terms blur together, you are not ready for the offer conversation yet.
Do you know what a vesting cliff is, and whether the role you are considering has one? A one-year cliff means you get nothing if you leave in month eleven. That is material information.
Do you know how the equity is priced and at what valuation? A grant of 10,000 RSUs means different things at different companies. The strike price or the per-share value matters more than the number of units.
The Shift That Changes Everything
Equity is not a bonus. Equity is part of your total compensation, and a part that carries real risk - dilution risk, liquidity risk, company-performance risk, and tax risk. The company is transferring those risks to you in exchange for a potential upside. Your job in the offer conversation is to understand the risk before you price the reward.
The Framework: Four Questions That Decode Any Equity Package
01What Am I Actually Getting, and How Is It Priced?
Ask the hiring manager or recruiter: is this RSUs, stock options, or something else? What is the current per-share value - and if it is a private company, when was the last valuation and at what price? If you do not have a per-share number, the equity figure in the offer letter is a marketing number, not a real one.
02What Is the Vesting Schedule?
Most schedules are four-year vest with a one-year cliff. Some are three-year. Some are 25/25/25/25 annual. Some front-load 40% in year one to keep you motivated. Ask for the schedule in writing. Then calculate what you actually receive if you leave at 12, 24, and 36 months.
03What Is the Refresh Policy?
A common trap: the initial grant looks big, but there is no refresh schedule. By year four, your equity compensation is zero while the new hire next to you is getting a fresh grant. Ask what happens at year four. Is there an annual refresh? A promotion-linked refresh? Or does your equity just stop?
04What Happens at Exit?
If the company is acquired, goes public, or you leave voluntarily - what happens to your vested and unvested equity? Are there acceleration provisions? Post-termination exercise windows (for options)? If none of this is defined, the company can change the rules on you at the moment they matter most.
Four Equity Traps to Spot
- Headline number with no per-share value. "$250,000 in equity" means nothing without the per-share price. Ask.
- Cliff that happens right before a known liquidity event. Some companies structure so you cliff out right before an IPO. Read the timing carefully.
- Short post-termination exercise window on options. 90 days is standard but cruel - if you leave, you often owe real money in 90 days to exercise. Newer companies offer longer windows.
- No change-of-control acceleration. If the company gets acquired and fires you, do you keep your unvested equity? If not, negotiate.
Your Strategy Through Friday
If you have an offer in hand
Before you respond to base or bonus, open the Equity Calculator below. Run the math on what the package is actually worth at 1, 2, 3, 4 years of tenure. Include dilution and risk.
If you are mid-process
Open the Offer Letter Red Flag Checklist. Use it to pre-write the questions you will ask the recruiter before a formal offer lands. Recruiters expect them - hiring managers respect them.
If you already signed without asking
Not too late. Most equity terms are visible in your grant agreement. Read it. Understand what you have. Plan around the cliff and refresh calendar.
The Midweek Mindset
Equity is a risk transfer. The company moves future financial uncertainty onto you in exchange for potential upside. That is not bad - it can be a great deal. But it is only a great deal if you understand the risk before you price the reward.
Four questions. Every offer. Every time.
Understand the equity before you price the offer.
Unlock the Equity Calculator and the Offer Letter Red Flag Checklist. Both free.
Open the CalculatorOpen the Checklist