Main image of article Would You Take More Equity for a Smaller Paycheck?

For many technologists, equity is a crucial part of their overall compensation package. At certain tech companies (especially the biggest, such as Google and Facebook), rising in the ranks means unlocking progressively larger stock awards. At startups, the take-home pay might be tiny, but technologists keep grinding out the hours in hopes that their equity will someday translate into multi-million-dollar payouts.

Now comes the crucial question: Would technologists be willing to sacrifice a portion of their base salary if it meant increasing their equity? The answer varies wildly at tech companies, according to the latest study by Blind, which anonymously surveys technologists about a range of vital issues:

It should come as no surprise that, at companies such as Amazon and Google that have enjoyed soaring stock prices of late, a majority of technologists would be willing to lose some of their take-home cash in order to build up a little bit more equity. However, that’s not true at every firm: Apple has been doing very well lately in terms of stock market performance, and yet 41 percent of respondents said they’d make the pay-for-equity trade-off—well behind Facebook or Lyft, where 63 percent and 69 percent of technologists (respectively) said they’d make that deal.

Of course, some of these respondents might feel like they’re already earning quite enough equity, thank you, without needing to take a cut in pay. According to levels.fyi, which crowdsources compensation data on a number of companies, software engineers at Apple who ascend to a pretty high ranking (i.e., ICT5 or ICT6) are already landing six-figure stock payouts on an annual basis

Nor is Apple alone when it comes to that kind of outsized compensation structure, at least at the biggest tech companies. At younger companies such as Lyft, on the other hand, the expectation of outsized stock performance at some future date is perhaps what drew you to work there in the first place: You want more equity because you truly think that either the company will grow, or an acquisition by an even bigger player (and the ensuing liquidity event) will make you quite rich. 

And as mentioned before, you often don’t have much of a choice at the smaller startups, especially ones that are trying to bootstrap their way to success: You’re paid less than you’d earn at a larger company, with the expectation that your two-percent ownership will translate into big bucks if the venture succeeds. For some technologists, the prospect of climbing aboard a startup on the rise is an exciting one, even if it means 80-hour workweeks; but for others, the safety of a paycheck and a big company is more important. 

If you had a choice, would you take more equity in exchange for a smaller paycheck? Everyone’s situation is different, of course, and you might feel prepared to accept a lesser salary for the chance at a huge payoff in a few years. Let us know how you feel via the quiz below (and yes, it says ‘Select all that apply,’ but please choose only one):

In a future article, we’ll let you know how people responded.