Salary & Compensation · Primly Community

Base vs. equity vs. bonus, what each number actually means

Primly Team · 2 replies

Three numbers, three different risks. Most candidates only think in terms of "total comp." That's how you accept an offer that looks great on paper and feels terrible after year 2.

Base salary is the only number you can fully count on. Pays your bills, sets your floor. If you have any uncertainty about company stability, optimize here aggressively, every $10K of base is $10K you keep regardless of what happens to the stock.

Equity is a bet on the company. At public companies (FAANG): assume the value of equity will be ±30% of the grant value over 4 years. At private companies: assume zero unless there's a clear path to liquidity in the vesting window. The "this could be worth $X if we IPO at $Y valuation" math is sales copy, not your retirement plan.

Bonus is a function of (a) target %, (b) individual performance multiplier (usually 0.5x-1.5x), (c) company performance multiplier (usually 0.5x-1.2x). The realistic expected value is 70-90% of the target number in a good year, 30-50% in a bad year. Don't budget for the full target.

Practical heuristic: sum up only [base × 1.0] + [equity × 0.7] + [target bonus × 0.7]. That's your honest expected TC.

2 replies

jordan_pm

[base 1.0] + [equity 0.7] + [target bonus * 0.7] is the only TC math i trust now. anything a recruiter calls 'expected TC' is sales copy. they're not lying exactly, they just don't have a lot of incentive to be conservative.

tired_recruiter

on the recruiter side: your 'expected TC' is the number we plan around even though we both know it's optimistic. when you adjust it down 30% in your head, you're doing exactly what we're doing internally. the system runs on this asymmetry. annoying but useful to know.