Compensation extends far beyond salary—yet most PMs don’t know how to navigate discussions about compensation when searching for a job.
Application forms and Recruiters perpetuate this by asking about your salary expectations to anchor the conversation around that single component.
It’s a complex system of benefits, bonuses, equity, and more that can significantly impact your financial future.
For PMs navigating the job market, understanding compensation is more than just knowing your worth—it’s about strategically positioning yourself for career advancement.
In this week’s issue, you’ll learn how to evaluate the full spectrum of compensation packages for Product Management roles.
Breaking Down Base Salary
Your base salary forms the foundation of your compensation. It’s the predictable, consistent amount you can count on.
When evaluating an offer, consider how the base salary compares to industry standards for your role, experience level, and location.
I also grab salary reports for the US and UK whenever I see them published; if you want one—just ask.
Key questions to ask:
How frequently is salary eligible for increases?
Understanding whether salary reviews follow a set schedule or depend on your achievements will help set realistic expectations.
What criteria are considered when salary is adjusted?
Understand which factors (performance reviews, market adjustments, or tenure) most significantly impact salary growth to gauge your long-term earning potential.
What is the total compensation band for this role?
This helps assess if you’re getting an offer at the lower, middle, or upper end of what the company is willing to pay for this role.
Equity: The Startup Lottery Ticket
At startups, equity often comes in the form of stock options. These give you the right to purchase company shares at a fixed price.
The potential upside can be significant if the company succeeds, but remember that most startups fail or never reach high valuations.
When evaluating options, consider the strike price, current valuation, potential exit strategies, and the company’s growth trajectory.
The cash value of equity at an early stage startup is practically £0.
So if you’re leaving behind a high salary, consider where compensation sits in your stack rank of priorities.
Key questions to ask:
What is the total percentage of the company I’m being offered?
Understanding this helps put the options in perspective relative to overall company ownership.
What is the current valuation of the company?
This gives context to what your equity might be worth today and helps track growth over time.
How has the company’s valuation changed over recent funding rounds?
Understanding the historical growth trajectory helps evaluate potential future value and indicates the company’s financial health.
RSUs: Big Tech’s Golden Handcuffs
Restricted Stock Units (RSUs) are actual shares granted to you, typically at established companies like Google or Amazon.
Unlike options, RSUs have guaranteed value as long as the company remains public and solvent.
The trade-off to consider: RSUs typically have longer vesting periods, designed to keep you at the company.
Key questions to ask:
What is the total value of RSUs being offered?
Understanding the dollar amount helps in comparing offers and assessing the impact on your total compensation.
How is the RSU value determined?
For public companies, is it based on current market value? For pre-IPO companies, what valuation is being used to calculate the share price?
Are there any performance-based conditions attached to the RSUs?
Some companies tie RSU grants to individual or company performance metrics beyond just time-based vesting.
Understanding Vesting Schedules
A vesting schedule determines when you actually own your equity. The standard is four years with a one-year cliff.
The “cliff” in a vesting schedule means you receive nothing if you leave before a specified initial period (usually one year), after which a portion of your equity instantly vests.
Some companies offer accelerated vesting upon acquisition or other triggers. This can be negotiated as part of your offer.
Leaders (Director and above) typically have more aggressive vesting schedules. For example, Amazon L8s and above had quarterly vesting, whereas everyone L7 and lower had shares which vested once or twice per year at most.
Key questions to ask:
What is the vesting schedule for the equity being offered?
This helps you understand the timing of when your equity will actually become yours. Knowing if it’s monthly, quarterly, or annual vesting after the cliff can significantly impact your compensation timeline.
Is there any accelerated vesting under certain conditions?
Understanding if there are provisions for accelerated vesting during acquisitions, leadership changes, or other company events can provide valuable protection and potentially increase the value of your equity package.
How does the vesting schedule align with company milestones?
This question helps you evaluate how the company’s projected growth timeline corresponds with your vesting schedule, giving you insight into when your equity might be most valuable.
Bonuses: Performance and Signing
Annual performance bonuses typically range from 5-30% of your base salary, depending on your level and company performance.
Signing bonuses can help bridge compensation gaps, especially if you’re leaving unvested equity behind. Yes, they’re still happening in 2025!
Always clarify the metrics that determine your bonus and whether it’s guaranteed or discretionary.
Key questions to ask:
How is the bonus structured between company and individual performance?
Understanding the actual bonus split ensures you know if you’re being evaluated primarily on factors within your control.
What metrics are used to calculate performance bonuses?
Understanding which KPIs or OKRs directly affect your bonus calculation will help you focus your efforts on the metrics that matter most.
Which bonus details will be formally documented in my employment contract?
Ensure all bonus details are documented in your contract to avoid misalignment later.
Benefits Beyond the Numbers
Paid time off policies vary dramatically between countries and companies. More progressive employers offer unlimited PTO or mandatory minimum vacation days.
Health insurance, retirement or pension matching, professional development budgets, and flexible work arrangements all have significant financial value.
These benefits can be worth thousands annually and should factor into your compensation calculations.
Key questions to ask:
What professional development budgets are available?
Understanding the company’s investment in your growth through learning stipends, conference attendance, or training programs can significantly impact your career advancement.
What health insurance plans are offered, and what is the employer contribution?
The difference between basic and premium healthcare plans can represent thousands in annual value, especially if the company covers a significant portion of premiums.
Is there a retirement matching program, and what are its terms?
Company matching contributions to retirement accounts are essentially free money that can significantly impact your long-term financial health.
The Art of Negotiation
Never accept the first offer.
It doesn’t matter if you’ve been unemployed for a month or a year.
Companies expect negotiation and typically leave room in their initial proposals.
Focus on the business value you bring rather than personal circumstances. Quantify your contributions whenever possible.
Remember that almost everything is negotiable – from salary to equity vesting schedules, remote work policies, and paid time off.
Go even further
Understanding compensation is just one piece of the puzzle when it comes to navigating your job search—and your career.
I share tips on negotiation, and more, in my free 7 Day Email course to land your next Product Management role.
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