Total compensation (TC) is the full monetary value of an employment package, including base salary, annual bonus, equity (stock options or RSUs valued at grant), benefits, and any additional allowances. At the VP and C-suite level, total compensation typically includes a meaningful equity component that can significantly exceed base salary. Candidates and search professionals always evaluate TC, not just cash.
Understanding Total Compensation
Total compensation (TC) represents the complete financial value of what an employer pays for a senior hire. It is calculated by combining base salary, expected annual bonus, annualised equity value (options or RSUs at current or projected valuation), and the value of benefits like health insurance, 401K match, and other allowances.
At the executive level, equity is usually the largest single component of total compensation over a 4-year period. A VP hired at $280K base with a 25% bonus target and a 0.25% equity grant at a company valued at $200M has a TC of $280K + $70K + ~$125K/year annualised equity = approximately $475K per year — very different from the $280K salary alone.
Base salary
Fixed annual cash. The floor of the compensation conversation, typically benchmarked against Radford, Levels.fyi, or comparable offer data.
Annual bonus
Target bonus expressed as a percentage of base, linked to company or personal performance goals. Typically 20–30% for VP roles, 25–40% for C-suite.
Equity
The most variable and debated component. Options or RSUs granted at hire, with value tied to company valuation and dilution trajectory over the vesting period.
Benefits and allowances
Health insurance, retirement contributions, paid leave, and executive-level perks. Typically $20K–$40K in annual value at well-funded companies.
Total Compensation vs Base Salary — Series B SaaS VP Example
Why Total Compensation Matters in Executive Hiring
Candidates at the VP and C-suite level — and the search professionals who represent them — always evaluate total compensation, not just base salary. A company advertising a $250K VP role may be competing against offers with equivalent base but significantly more equity, better bonus mechanics, or more favourable vesting terms.
For founders and CEOs structuring an executive offer, understanding total compensation benchmarks by function, stage, and geography is the difference between closing the candidate and losing them at the final stage.
“Candidates never evaluate just the base. The gap between what a company thinks it is paying and what a candidate is hearing is often $100K–$200K. Both sides need to be doing the same maths.”
How to Calculate Total Compensation
The standard calculation: TC = Base Salary + Target Annual Bonus + (Annual Equity Grant Value / Vesting Period) + Benefits Value. For equity-heavy roles at startups, the equity component requires a scenario analysis — current 409A value, projected exit scenarios, and dilution expectations — to present a credible number to a sophisticated candidate.
At Majhi Group we build a total compensation model for every search we lead, benchmarked against comparable companies at comparable stage. The goal is to structure an offer that competes accurately — not to overpay or underpay.