You have two offers. Offer A pays $200k base. Offer B pays $175k base but includes a larger equity package. Which is better? The answer depends on which year you're looking at, how long you stay, and a dozen other factors. Here's a framework.
Step 1: Get to 4-Year Total Comp, Not Year 1
Year 1 total comp is often misleading because equity usually vests over 4 years. An offer with a large signing bonus or front-loaded RSU vesting looks better in Year 1 but may be lower in Years 2–4. Always model at least a 4-year view.
Step 2: Normalise for Vesting Schedule
Two offers both saying "$200k in RSUs over 4 years" can pay out very differently if one is front-loaded (38/32/20/10) and the other is back-loaded (5/15/40/40). Check whether you plan to stay for the full 4 years, or whether you're likely to move sooner.
| If you leave after... | Front-Loaded ($200k grant) | Back-Loaded ($200k grant) |
|---|---|---|
| Year 1 | $76,000 | $10,000 |
| Year 2 | $140,000 | $40,000 |
| Year 3 | $180,000 | $120,000 |
| Year 4 (full) | $200,000 | $200,000 |
Step 3: Discount Startup Equity for Risk
If one offer includes private company equity (options or RSUs in a startup), you need to mentally discount it. Most startup equity ends up worthless; successful exits are real but uncommon. Common practice among financial planners is to apply a significant discount to private company equity compared to the equivalent dollar amount in public company RSUs.
The Compare Job Offers tool lets you apply an optional illiquidity discount % to private company stock options, making the comparison more realistic. See the RSUs vs Stock Options guide for more on this.
Step 4: Factor in Location and Benefits
$200k in San Francisco and $200k in Austin are not the same in purchasing power. The Compare Job Offers tool includes a simple cost-of-living adjustment for major US metros. It won't replace a full COL analysis, but it helps calibrate the comparison.
Also factor in: 401k match (a 4% match on a $200k salary is $8k/year), PTO (additional days have dollar value), health insurance quality, and remote flexibility.
Step 5: Consider the Non-Financial Factors Last
Once you have the numbers clear, the remaining decision factors are personal: role fit, team quality, growth trajectory, manager, company culture, and the work itself. These matter enormously and can override a financial analysis — but you want to know the financial tradeoff you're making before you make those calls.
Quick Checklist
- ✓Model both offers over 4 years, not just Year 1
- ✓Check vesting schedule type (standard / front / back-loaded)
- ✓Account for signing bonus clawback provisions
- ✓Note cliff dates — leaving before a cliff costs real money
- ✓Apply a realistic discount to private company equity
- ✓Factor in COL if offers are in different cities
- ✓Add 401k match, PTO, and remote savings to the comparison
- ✓Ask about refresher grant policy (some companies give annual refreshers, others rarely do)