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Candidates

How to explain cash and equity in a startup offer

Present salary, variable pay, and equity separately, with clear terms and uncertainty, so candidates can understand the package.

CompensationOffers

Explain a startup offer by separating salary, variable pay, and equity. State what is known about each component and direct detailed questions to the appropriate documents and company owner.

Do not combine a speculative equity outcome with annual cash pay and present the result as guaranteed compensation.

Use separate lines for separate components

ComponentWhat to explain
Base salaryAmount, currency, and payment basis
Variable payApplicable plan, target conditions, and how it is determined
EquityAward type, proposed or approved amount, and relevant terms
BenefitsThe benefits that apply to this role and location
One-time itemsAny approved signing or relocation support and its conditions

Carta's compensation guide distinguishes cash, variable compensation, equity, and benefits, and recommends providing equity type and vesting details in an offer. Keep those distinctions visible in your explanation.

Be precise about approval status

If an equity award is proposed or subject to approval, describe that status accurately. Do not imply that a conversation itself completed the grant.

Use the company's approved language and documents. Make sure the person explaining the package knows which questions need help from finance, legal, or the equity administrator.

Explain uncertainty without a sales pitch

Carta's equity overview notes that gains are not guaranteed. An employee's eventual outcome can differ from a figure used to describe an award today.

Illustrative communication: A fictional company describes the cash salary separately and provides an equity document explaining the award and its conditions. It does not promise an exit date or tell the candidate that the equity will cover a future personal expense.

Avoid using an optimistic valuation scenario as if it were money the candidate can spend now.

Invite the right questions

Help candidates find answers about the award type, vesting, applicable conditions, available information, and where authoritative documents are maintained.

If candidates ask about their personal tax treatment or whether they should exercise or sell, direct them to qualified independent advice. Do not improvise an individualized financial recommendation during recruiting.

Keep the explanation consistent

Check that recruiter messages, the offer summary, and formal documents describe the same package. Correct discrepancies before asking for a decision.

A clear offer can still be unattractive to a particular candidate. The objective is understanding, not making every component sound equivalent.

Use the offer decision brief to organize the full opportunity. For sales roles, explain OTE and the role's actual work separately.

Put this guide to work

Hire people who build like founders.

Share the role, the outcomes this person should own, and your hiring constraints. Refery brings specialist recruiters and trusted referrals behind one brief.