
Ask HN: Comparing a C-level equity-based offer to my salary-focused current comp - norejisace
I didn&#x27;t grow up in the US so throughout my career I continued to had to learn about the intricacies of the American employment system including compensation packages.<p>I feel I am at a new learning point right now as I am considering a C-level role for a series G startup I really admire.<p>Below is what my current package looks like today as well as what the initial offer of the startup company stands at.<p>Through my naive eyes it feels I would be falling short quite a bit in the new environment wrt compensation and taking on a lot of the risk (with an IPO&#x2F;sale uncertain for decades)<p>My mindset is I would need to negotiate the offer quite a bit up with respect to base to make it feasible and more comparable. However, ppl more familiar in the startup industry consider it a moderate offer even against what my current package looks like right now.<p>Knowing a lot of it comes down to personal preferences, are there any individuals here that can give a rough qualitative assessment how they&#x27;d compare the two aspects and what negotiation items to potentially prioritize - happy to provide any clarification as far as anonymity is retained. Also, if there is anything missing I should make sure is clearly defined I welcome any input.<p>State:
California<p>Current:<p><pre><code>  * President title
  * 415k Base
  * 10% average yearly bonus
  * 10k yearly training stipend
  * 10% discount on stock options
  * 401k matching  
  * 80% travel
  * 9mos severance
  * Standard healthcare insurance
  * 24 days of PTO + close between Christmas and New Year
</code></pre>
New:<p><pre><code>  * C-level title
  * 300k base
  * 50% target bonus
  * Equity 0.0033 (200k ISO shares out of 60M)
  * Traditional vested over 4 years
  * Strike price 3.40$
  * Current evaluation price $9 (550M)
  * Limited travel
  * 6mos severance after 12 months
  * No 401k
  * Standard healthcare insurance
  * Unlimited PTO</code></pre>
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Eridrus
I'm not a C-level exec, don't know the difference between a C-level and
President title and this is way more than I get paid, but the new offer seems
reasonable, particularly if the 50% target bonus is a reasonable target.

I think you may also be undervaluing the equity significantly. IPO/sale
timelines are getting longer (hell, you say they did a Series G! round), but
there is likely to be a private market for the stock at this point, and since
they're giving you what is ~300k in stock compensation/yr on paper, it
shouldn't be hard to get enough value out of that to eclipse your previous
comp, and this number should basically grow year on year if the company
continues to grow.

I wonder how you feel about the severance situation; my impression was that
large severance for C-level positions was due to the difficulty of finding
another one if things fall through, and yet the startup offer doesn't have the
severance kick in for 12 months, which is when it probably most likely to not
work out.

I have a hard time imagining a Series G company without a 401k, do you mean
they don't do a match, or have they really managed to go that long without
setting one up for employees?

But anyway, the package seems fine to me, if this company works out and you
succeed there; the biggest risk to me seems like something going wrong and you
part ways before 12 month are out and you don't get any ISOs and no severance
and no bonus. So it basically sounds like it could be a 50% bump, but only if
you can execute the way they expect you to and a very bumpy ride otherwise. I
would be more concerned about how good a fit you are for the role than the
exact comp.

~~~
norejisace
Great input. To answer your questions.

\- There is no 401k but the idea is to put one in place by end of year per
leadership \- There is no private market in place yet but that is also meant
to change end of year; I am not entirely familiar with the concept and how
this impacts the comp evaluation \- Re: severance - agreed that I am taking
all the risk here given my current severance and I would need to see at least
a 3 months severance in the first 12 months \- Historically all my employers
over-promised on bonus payments; is it legitimate to ask for their track
record on target bonus payments on the C-level? \- Great point on the fit; I
consider it strong and am closely aligned with the vision of the company so
that is a big plus

~~~
Eridrus
> There is no private market in place yet but that is also meant to change end
> of year; I am not entirely familiar with the concept and how this impacts
> the comp evaluation

A company may decide to join/setup some private market to make it easier for
insiders to sell their shares, and also know the price being offered for them,
but this is not a prerequisite to selling shares. Even if the company doesn't
follow through, you should be able to sell your shares to a private buyer.
It's a pain in the ass and the company has a right of first refusal, but with
98% certainty you will be able to turn stock in a late stage company into
cash.

> Historically all my employers over-promised on bonus payments; is it
> legitimate to ask for their track record on target bonus payments on the
> C-level?

I definitely think it is fair to ask about track record, but you should also
ask how you will be evaluated. I don't know if there are clear targets in your
line of work that you will be measured against or not, but it might be clearer
how achievable that is depending on how they plan to evaluate your performance
wrt targets.

I've found US companies to be surprisingly good at paying bonuses to
engineers, though they are not 50% bonuses so maybe they don't care as much to
play games.

If I were you I would get to know how pre-IPO stock works in a bit more
detail, it's a very big part of this offer. Assuming the numbers you have are
right it's ~280k/yr in ISOs. The biggest question you should answer is where
the $9 came from. If they just took the headline valuation number from their
last funding round and divided it by the number of shares, it is probably an
over-estimate since investors over-pay in terms of valuation to secure
downside protections like liquidation preferences. You should learn what
liquidation preferences are; you could try ask the company about what
liquidation preferences/etc investors have, and maybe they'll even tell
C-level hires :)

Depending on how much research you want to do, you could try and do some
research on how much a private investor would pay for shares in the company
now to get an accurate view of how much the stock is really worth today. But
this might be getting in to the weeds. You could ask the company too, though I
dunno how much help they would be. Most companies internally price some
optimism into their ISOs when handing them out.

~~~
norejisace
Thanks again!

> You should be able to sell your shares to a private buyer.

Is there a particular "terminology" to this ability I should ensure I confirm
with the company?

> you should also ask how you will be evaluated

Great point and on my list.

> The biggest question you should answer is where the $9 came from.

It is indeed the number from the latest founding round 2 years ago so I assume
it to be high.

> you could try ask the company about what liquidation preferences

Assuming this relates to preferred stocks and if they have been issues to
investors? On my list of questions.

> Depending on how much research you want to do, you could try and do some
> research on how much a private investor would pay for shares

Any idea how you would go about it?

Thanks again for your great input. Much appreciated.

