Equity at executive level: what to ask before you sign

Start with what kind of company this is

In a listed company, equity has a price you can look up and a market you can sell into. In a private company it has neither. That single difference changes every other question, and it is why advice written for one is close to useless for the other.

The questions that decide the value

A grant you cannot value is not a grant. It is a hope with a number printed on it.

Vesting is a retention device, and that is fine

Equity that vests over years exists to make leaving expensive. That is its purpose and there is nothing dishonest about it — but it means the number you are shown is a plan for your next four years, not a payment for joining. Judge it as a reason to stay, and ask whether the reasons to stay are real.

What to do if the answers are vague

• Ask in writing, politely, once. Reasonable companies answer; the ones that cannot are telling you something.
• Get the plan documents, not the summary slide. The terms that matter are in the document.
• Take advice from someone who does this for a living before you sign, not after. This is the one part of a package where a professional opinion reliably pays for itself.
• Value the offer without the equity, and decide whether you would still take it. If the answer is no, you are being paid in something you cannot price.

The honest limit

Nobody can tell you what private equity will be worth, including the people issuing it. The aim is not certainty. It is to know what you are holding, what has to happen for it to pay, and what you give up if you leave before it does.