Evaluating a Job Offer's Total Compensation, Not Just the Base Salary
Base salary is the easiest number to compare between offers and the least complete one. Here's how to actually weigh two offers against each other.
By The Internet Compass Editorial Team — Work Platforms Desk
Base salary is the easiest number and the least complete one
Two offers with identical base salaries can have wildly different total value once bonus structure, equity and benefits are counted. Comparing on base alone systematically undervalues offers with more complex — often more valuable — compensation structures.
The goal isn't to distrust equity or variable pay; it's to weigh each component honestly, including the real probability and timeline attached to it, rather than either ignoring it or taking the most optimistic framing at face value.
Work through each offer in this order
Compare offers component by component rather than jumping straight to a total, since that's where the real differences usually are.
- 1
Confirm the base salary and any guaranteed increases
Base is the only fully certain number in most offers. Note whether it includes any pre-negotiated raise at a fixed future date, which some offers use to soften a lower starting figure.
- 2
Get the variable pay structure, not just the target
For a sales or partially variable role, ask for on-target earnings and what percentage of the team actually hits 100% of quota. A high OTE with low realistic attainment is worth less than a lower OTE with a track record of being hit.
- 3
Annualise the equity conservatively
Take the grant's stated value and divide by the vesting period (commonly four years) for a same-footing annual figure, but discount a private company's equity meaningfully against its own valuation — that value is only real at a future liquidity event.
- 4
Price the signing bonus for what it actually is
A signing bonus is a one-time, first-year-only addition, usually with a clawback if you leave within twelve to twenty-four months. Don't let it inflate your read of ongoing annual compensation.
- 5
Add quantifiable benefits last
Health insurance premiums covered, 401(k) match, and other concrete, dollar-denominated benefits belong in the comparison. Vaguer perks ("great culture", unlimited PTO with unclear norms) don't have a defensible dollar value and shouldn't be forced into one.
Equity is a probability-weighted number, not a fixed one
A private company's equity grant is commonly quoted at the company's most recent 409A or last-round valuation, which represents the company's most optimistic recent view of itself. Realised value depends entirely on a future acquisition or IPO at a price that meets or exceeds that valuation — an outcome that is genuinely uncertain for any single company, however strong its trajectory looks today.
This isn't a reason to dismiss equity in an offer comparison, only a reason to weigh it at something closer to a realistic, risk-adjusted value than its headline figure, especially at an earlier-stage company.
Frequently asked questions
- Should I ever prioritise base salary over equity entirely?
- For most people, yes, if the two offers aren't otherwise comparable — base salary is guaranteed and liquid, equity is neither. Equity is reasonably weighted more heavily only when the base and benefits alone are already competitive on their own.
- How do I compare an offer with a signing bonus against one without?
- Spread the signing bonus's value only across its clawback period (often one to two years), not the full tenure you expect at the company — treating it as ongoing annual compensation overstates the offer.