Modeling complex equity compensation
Tools for polls where equity is a meaningful part of compensation
Equity is often a meaningful part of compensation, but its structure can vary widely, from straightforward stock grants to multi-year packages with complex vesting and uncertain liquidity.
Salary Confidential includes dedicated features for polls where equity matters. These tools help respondents describe how their equity works and make results easier to interpret across peers.
There are three dimensions to think about the equity portion of compensation:
- "How big is the bag?", the size of the equity portion
- "How real is the bag?", whether that equity is likely to become liquid
- "How often do you get the bag?", how consistently equity is actually delivered over time
Salary Confidential asks respondents directly about the size of their equity package. For the other dimensions, the platform uses indexes to make equity compensation easier to compare across peers.
This approach has two advantages. The indicators combine multiple signals into a more informative measure, and they allow us to avoid exposing raw inputs in results reports, where they could sometimes become de-anonymizing.
Understanding how reliably equity is delivered
The Equity Delivery Index (EDI) measures how reliably equity is delivered as part of compensation.
EDI captures structural elements such as vesting cadence, refresh grant policies, and vesting cliffs. Together, these factors help distinguish equity programs that function as a steady part of compensation from those where equity is granted more sporadically or with long periods of exposure.
The index is expressed on a 0–1 scale, where higher values indicate equity that is delivered more consistently and with fewer structural slowdowns.
Learn more about how the Equity Delivery Index worksUnderstanding how likely equity is to become liquid
The Liquidity Trajectory Index (LTI) estimates how likely a respondent's equity is to eventually become liquid, helping put equity compensation packages from different companies on a more comparable footing.
Equity from early-stage or bootstrapped companies may never become liquid. Even later-stage equity is never guaranteed, but statistically the failure rate of investor-backed companies tends to decrease as organizations raise additional funding rounds or attract institutional investors.
LTI captures signals that help indicate how far along a company appears to be on a plausible trajectory toward liquidity. These include company stage, company age, and company size.
The index is expressed on a 0–1 scale. Higher values indicate companies that appear further along a trajectory toward a liquidity event based on the signals available today.
Learn more about how the Liquidity Trajectory Index worksA note about Total Compensation
When we calculate Total Compensation numbers, respondents tell us whether they consider the equity portion to be "sure enough" to include in that number (otherwise, TC is only cash base and cash bonuses). This also creates an additional signal in results, since we report whether the respondent chose to include equity in their TC.
We chose this approach rather than adding many additional questions to polls in order to make that determination ourselves.
In all cases, the equity information itself is still collected. If the survey includes the Extended Equity section, those values are used in the equity-specific analyses regardless of whether the respondent included equity in their TC calculation.
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