Because I've experienced a lot of number fiddling to describe total comp. For example we offer you X equity at Y valuation, when the valuation is something they have made up internally etc. I want to know how much cash in hand I can expect. Also, offering private health insurance, when you live in a country with a decent public health care system is not much of benefit and generally not worth what the company says its worth. If it was the US, I could see how that would be valuable, but in most of Europe, it is not.
Startups are going to be like that, but you said you were interviewing at AWS. You can buy and sell their equity on the open market, so it's not really a mystery what you're getting. If they say they give you 50 shares a year, that's $137,941 a year in cash money. Probably more next year. You can sell it or hold it, but turning it into cash is very easy. Sure, Amazon could go out of business while you're holding stock grants and then you get $0... but that's exceedingly unlikely. A lot would have to go wrong for Amazon to lose all its value.
When I was new to the FAANG world I pretty much valued the stock at $0. I quickly learned that that was not correct; stock ended up being half my pay. (Probably more than half as you move further up the ladder!) The base salary is good, but another 100% on top of that was also pretty okay. I guess until you've seen it, it all seems mysterious. But I can assure it's almost as good as cash, minus whatever you pay someone to fill out all the tax forms.
As for why these companies give you stock instead of bumping up your base salary to be what you'd get by selling the stock right when it vests... apparently it's cheaper for them. It's not quite the same as printing money, but I guess it's close.
Instead of worrying about base salary vs. equity, I'd rather know roughly how much "guaranteed" compensation to expect. Guaranteed would include cash salary, immediately-sellable stock, and the amount of bonus that is not contingent on personal or company performance. The rest is "speculative" compensation: stock options, potential gains from holding stock, illiquid stock, and bonuses that might not materialize for various reasons.
This. Bonuses based on company performance are going to be extremely rare this year. My employer was up front about it, telling me in April that bonuses were suspended. That’s fine, because I treat it as a bonus, but if one was counting on it to make mortgage or student loan payments...
I never got offered private health insurance in Spain by an employer. I have it in the UK. When I was a kid I had access to private health insurance in Spain, so I know it a bit.
I find the NHS I have today is slighty worse than the Spanish equivalent I left a decade ago. Maybe because of the austerity policy of the Conservative government during the last decade, I don't know. In any case is not too bad.
Funny enough the private health insurances in Spain, which have to compete with a better public system, are WAAAAAAAAAAAAY better than ANY available in the UK.
At first I used the UK private insurance from my employer thinking "if they are being paid let's at least use them, saving resources to the NHS for people without an alternative". But not anymore...
- It's more complicated
- I have an uncomfortable relationship with my doctor when there are financial incentives involved (specially after one specific case)
I actually need to pay a 40% of the price of the insurance in income tax. The only reason I have not asked my employer to stop it is because the NHS cancer treatment times are getting longer than they should. That's the only benefit I see in them: a potentially shorter time to treatment in cases where time may make the difference between life and death.
Why base salary rather than total comp?