The largest number in your compensation is rarely your salary. Here is how to read what your equity is actually worth on the way out — and what employers hope you will overlook.
For most executives, equity is the single largest component of total compensation — and the least understood at the moment it matters most. When you depart, the value of that equity is governed not by intuition but by a stack of plan documents, vesting schedules, and definitions that were drafted long before you needed them.
The first mistake is to accept the company's characterization of what is 'vested.' Vesting terms frequently include acceleration triggers, and the reason for your departure — resignation, termination without cause, or a change in control — can change the answer entirely. What an employer writes off as forfeited is often recoverable.
The second mistake is to treat the release you are asked to sign as separate from your equity. It is not. A general release can extinguish claims to unpaid awards, and the timing of your signature can determine whether options lapse or survive. These documents must be read together, against one another.
Before you sign anything, take an inventory: every grant, its status, its acceleration terms, and the plan language that governs it. Then value it — vested and unvested, current and deferred. Only with that number in hand can you know whether the offer in front of you is fair, or merely fast.
This article is provided for general information only and does not constitute legal advice. For counsel on your specific circumstances, please speak with a partner.