Reading an American Job Offer Beyond the Salary Number

This looks at the components of a compensation package from the practical end — what holds up once conditions stop being ideal.

The components of a package

An offer typically consists of base salary, a bonus target, sometimes equity, a benefits package and a set of leave entitlements. Comparing two offers on base alone can be badly misleading, because the benefits difference between employers is frequently substantial.

Bonus figures are usually targets rather than commitments, and the historical payout rate is a fair question to ask. Sign-on payments are often subject to repayment if you leave within a defined period, and that clause deserves reading carefully. Ask for the full written offer including the benefits summary before deciding anything, since the summary is where the real comparison lives.

Health insurance is part of your pay

American employers typically pay a large share of health insurance premiums, and that contribution is worth a meaningful sum annually. Two employers offering identical salaries can differ substantially once premiums, deductibles and the quality of the network are accounted for.

Ask for the plan documents rather than the marketing summary, and look at the deductible, the out-of-pocket maximum and whether dependants are covered affordably. Coverage for a spouse and children varies enormously in cost between employers and is frequently the largest hidden difference. Waiting periods before coverage begins also vary, which matters if you are arriving without any other cover.

Equity, vesting and what it is worth

Equity grants usually vest over several years with an initial period before anything vests at all, which ties value to staying. Shares in a publicly traded company have an observable price, while shares in a private company have a valuation that is an estimate rather than a market. Options and restricted units behave differently, are taxed differently, and the differences are consequential enough to warrant proper advice.

Never treat an equity figure as cash in the offer comparison, and never make life decisions on a private valuation. Tax treatment of equity is genuinely complicated and changes, so a qualified tax professional is the right source rather than a colleague.

Retirement contributions and the match

Many employers offer a retirement savings arrangement with an employer contribution matched to yours up to some limit. An employer match is deferred compensation rather than a benefit, and not contributing enough to receive it is leaving pay on the table. Employer contributions frequently vest over time, which means leaving early can forfeit part of what has accumulated.

In the first year, how these accounts work if you eventually leave the country is a real question with tax consequences, and it deserves professional advice.

This article does not recommend any investment approach and nothing here should be read as financial advice.

Leave, and the American convention

Paid leave in the United States is set by employers rather than by a national minimum, and the typical allowance is lower than in much of the world. Ask specifically how many days, whether sick leave is separate, and whether unused days carry over or are paid out on leaving.

In the first year, unlimited leave policies sound generous and in practice often result in people taking less, because there is no accrued balance to use. For anyone with family in India, the length of a realistic trip home is a genuine consideration in comparing offers. Parental leave provision varies dramatically between employers and is worth checking even if it is years away from mattering.

The written terms

Employment in most American states is at will, meaning either side can generally end it at any time for most reasons. Offer letters frequently include restrictive covenants, confidentiality terms and arbitration clauses, and their enforceability varies by state.

Where your employment is connected to an immigration arrangement, the interaction between these terms and that arrangement is a matter for an attorney. Ask for the complete document set before signing, and take the time to read it, since nothing improves after signature. A verbal assurance from a recruiter that contradicts the written terms is worth exactly nothing when it matters.

The takeaway

Compare the whole package in writing, and get advice on equity and tax rather than guessing. This article is general information, not financial, tax or legal advice.

Keep copies of everything, in two places, for longer than feels reasonable.