Stock-Based Compensation Calculator

Equity is where compensation gets genuinely confusing, and recruiters know it — the headline grant number gets waved around precisely because it's the easiest figure to inflate and the hardest to interpret. The first thing to nail down is what kind of equity it is. An RSU is worth the full share price at vest, so it has value as long as the company does. An option is worth only the spread between the share price and your strike, and nothing at all if the price sits below the strike. The same ten thousand shares can be worth a fortune or precisely zero depending on which it is and where the price is.

The second thing is that a grant doesn't arrive all at once. It vests over years — typically four, with a one-year cliff before anything vests at all — so the number that compares to a salary is the annualized value, the grant divided by the vesting period, not the four-year headline. And whatever hasn't vested when you leave, you forfeit, which is exactly why vesting exists and why timing a job change around vesting dates matters.

Then tax takes its cut. RSUs are taxed as ordinary income at vest, often thirty to forty-five percent all-in, so the after-tax value — what you actually keep — can be far below the headline. Any honest equity comparison is an after-tax comparison. Options add their own tax complexity, with the notorious AMT trap on incentive stock options exercised while private, which is one of several reasons to involve a tax professional before exercising anything.

Finally, and most importantly for risk: public-company RSUs are nearly cash, while pre-IPO equity is a bet. It depends on a future liquidity event that may never come, at a valuation that may not materialize, and you may have to pay to exercise long before any payout. The same nominal value is radically riskier pre-IPO — discount it accordingly. Use this calculator to value a grant properly, after tax and annualized, then fold it into full total compensation with the Salary Explorer and judge whether the company can actually deliver on it with the Company Comparison Engine.