How to Evaluate and Compare Job Offers

## The Comparison Framework

When you have multiple offers, a structured comparison prevents emotional decisions. Create a spreadsheet with these categories.

## Step 1: Calculate Total Compensation

### Cash Compensation

| Component | Offer A | Offer B |
|-----------|---------|--------|
| Base salary | $170,000 | $155,000 |
| Annual bonus (target) | $25,500 (15%) | $38,750 (25%) |
| Signing bonus (amortized) | $12,500 (/2yr) | $25,000 (/2yr) |
| **Year 1 cash** | **$208,000** | **$218,750** |

### Equity Compensation

Convert equity to annual value:
- RSUs: Grant value / vesting period. $400K over 4 years = $100K/year.
- Stock options: Use Black-Scholes or discount the spread by 50-70% for risk.
- Startup equity: Discount heavily (80-95%) for illiquidity and failure risk.

### Benefits Valuation

| Benefit | Value |
|---------|-------|
| Health insurance (employer portion) | $15,000-$25,000 |
| 401(k) match (6% on $170K) | $10,200 |
| ESPP (15% discount on max) | ~$3,750 |
| PTO (25 days vs 15 days) | ~$6,500 difference |

## Step 2: Calculate Net Compensation

Use SalaryFYI's tax calculators to estimate after-tax income for each offer, accounting for:
- Federal tax differences (pre-tax 401(k) amount)
- State/local tax (if offers are in different states)
- Social security on different salary levels

## Step 3: Adjust for Cost of Living

If offers are in different cities:
1. Calculate net monthly income for each.
2. Estimate housing costs (largest variable).
3. Estimate other expenses using cost-of-living indices.
4. Calculate monthly savings (net income minus expenses).

The offer with higher monthly savings wins financially.

## Step 4: Non-Financial Factors

Rate each on a 1-5 scale:

| Factor | Offer A | Offer B |
|--------|---------|--------|
| Career growth potential | | |
| Manager/team quality | | |
| Company stability | | |
| Work-life balance | | |
| Remote flexibility | | |
| Learning opportunities | | |
| Mission alignment | | |

## Step 5: Consider the Time Horizon

Calculate total compensation over 4 years (one full RSU vesting cycle):

- **Year 1**: Include signing bonus, initial RSU cliff vest.
- **Years 2-4**: Ongoing salary, bonus, equity vesting.
- **Year 4+**: Will you need refresher grants? What's the promotion trajectory?

A lower Year 1 offer with better long-term equity can be worth significantly more over 4 years.

## Key Takeaways

1. Always compare total compensation, not just base salary.
2. Discount startup equity heavily for risk.
3. Calculate after-tax income using actual tax rates.
4. Adjust for cost of living if offers are in different locations.
5. Model the 4-year total compensation scenario.