Compensation

For a long time the answer to "what do you make?" was one number. Forty-four million won was forty-four million won, and people decided whether to take a job by looking at that figure alone. When companies lasted decades and payroll landed on the same day every month, one number carried all the information anyone needed.

The arithmetic broke once newly funded companies started hiring. A company two months past its first round cannot match the cash a large employer offers. So it carves off a slice of ownership instead, promises something extra if the year goes well, and fills the remaining gap with equipment budgets, learning stipends, and time-off policies. Less cash, more kinds of things.

That left offer conversations with nothing to compare. "We pay 44 million" and "we pay 38 million plus 5,000 shares" are two sentences that cannot be lined up next to each other. The candidate has no way to price the second half, and the company cannot state in one figure what it is actually spending on a person. Inside the company the same gap shows up differently: each hire negotiates separately, somebody who joined last month ends up above somebody who joined two years ago, and the day that becomes known is the day the earlier hire starts interviewing elsewhere.

Compensation is the word that bundles all of it. It is wider than salary, which covers only the money that arrives every month, and it includes things that are not money at all. Once the bundle had a name, three things became possible. A company can show a candidate how much is cash, how much is ownership, and how much is everything else. It can write rules about who gets what instead of settling it one negotiation at a time. And it can forecast next year's payroll before the hires happen.

The People axis follows a person from the job opening through to the exit, and splits that path into nine branches. Compensation sits sixth. Performance management, the branch just before it, records what each person actually delivered, and compensation converts that record into an amount. When the two are disconnected, review documents become files nobody opens after the quarter closes; when amounts are set without rules, there is no way to explain why one person is paid more than another.

Ten terms sit under compensation. They split into three branches: what gets paid, when the person actually owns it, and how the amount is decided in the first place.

The first branch is the components of a package. The first two are cash and the last three are ownership.

1. Base salary — the fixed amount that arrives on the same day for the same figure every month. A 44 million won salary works out to roughly 3.66 million won a month before tax and insurance come out. It is the only line in a package that is settled regardless of performance, which is why candidates ask about it first and concede on it last.
2. Bonus — money added on top based on how much of an agreed target was met. Annual bonuses paid once at year end, quarterly incentives, and sales commission set as a percentage of contract value all live here. A common design sets the target at 10 percent of base salary and pays anywhere from 0 to 20 percent depending on the review outcome.
3. Equity compensation — a share of company ownership handed out instead of cash. Shares in a private company cannot be sold today, so this is not spendable money but a claim on what the company might be worth later. It comes in the two forms below.
4. Stock option — the right to buy shares at a price fixed in advance. With the right to buy 5,000 shares at 5,000 won each, a later share price of 20,000 won means paying 25 million won to hold 100 million won of stock. If the price falls below 5,000 won nobody has to buy, so there is no loss, but the line is worth zero in that case.
5. Restricted stock unit (RSU) — shares handed over outright once conditions are met. Nothing has to be bought, so the value does not fall to zero when the share price drops. In exchange the company actually gives up that ownership, which is why RSUs show up mostly at public companies or at private ones where a per-share price is already well established.

The second branch covers when promised shares become the employee's own. It applies to equity only.

1. Vesting — the practice of handing over promised shares gradually with time served rather than all at once. Four thousand shares on a four-year schedule move across at roughly 83 shares a month, so someone who stays two years leaves with half of them. Without this structure a person could collect the full grant in their first month and resign in their second.
2. Cliff — the stretch of time that has to pass before vesting starts working at all. On a four-year schedule with a one-year cliff, somebody who leaves at eleven months takes nothing, while somebody who reaches twelve months has a full year's 1,000 shares land at once and then accrues monthly from there. It exists to filter out very short stays.

The third branch covers who sets the amount and on what grounds.

1. Pay band — a floor and a ceiling written down in advance for each job and level. An engineering level three band might run from 52 million to 68 million won. It stops the strongest negotiator from simply being paid the most, and it gives finance a basis for estimating how much payroll grows with each planned hire.
2. Total rewards — base salary, bonus, equity, and benefits added up into a single figure. This is the unit people use to compare offers. The catch is that the equity portion is an assumed value rather than a current one, so the same offer totals anywhere from 50 to 70 million won depending on the per-share price assumed.
3. Benefits — everything provided outside of pay. Legally required insurance and severance sit on one side; meal allowances, hardware budgets, learning stipends, health checkups, and home-office reimbursements sit on the other, set by the company as it likes. Converted into cash the amounts look small, yet they register strongly because people encounter them daily.

The three branches interlock in order. The framework sets the range for a role, the components split that amount between cash and ownership, and the conditions decide when the ownership half actually lands. Change one branch alone and the others fall out of alignment. Raise one person's number without touching the band and everyone at that level is now inconsistent; hand out generous equity with no vesting attached and that equity gives nobody a reason to stay. Set a wide band with no bonus design behind it and managers start using the top of the band as the reward for one good year, spending room that was supposed to last several.

"The offer is 52 million in total rewards. Cash is 44 and the rest is equity vesting over four years."

Cash and equity are being quoted separately rather than as one figure. Of the 52 million, 44 lands in a bank account, and the remaining 8 only fills in over four years of staying.

"That number is above the top of the band. Raising it means revisiting the level."

The amount the candidate asked for sits past the ceiling written down for that level. Granting it as a one-off would put the new hire out of line with everyone already at that level, so the level itself has to be reconsidered instead.

"Leave before the one-year cliff and you walk away with nothing."

A check on the conditions attached to equity. Resign before month twelve and every share that felt like it had been accumulating disappears.

At Pagedeck this comes up in two places: when an offer goes out, and once a year when amounts are reset. As headcount reached 45, Grace wrote down a range for every job and level, and since then the figures quoted in negotiations come from that sheet.

Last quarter a candidate at Theo's level asked for four million won above the top of the band. Grace had two options. Hold cash at the ceiling and add equity, or place the candidate one level higher. The second option meant adjusting four existing people at that level too, which worked out to 16 million won of additional payroll this year. The team went with extra equity, and the question Mia raised in the room was about conditions rather than amounts. Equity on a four-year schedule behind a one-year cliff is worth close to nothing in the candidate's first year, and quoting the total rewards figure without saying so leaves the two sides describing different jobs by month three.

The most common mistake is using compensation and salary as the same word. The number that shows up in a bank account every month is the salary, the number printed in a job posting is the salary, and everything else feels like a bonus round. But the share of total rewards that base salary accounts for varies enormously. At a recently funded company it often runs 60 to 70 percent, with equity and bonus covering the rest. Treating the two words as equivalent leads people to pick the wrong offer: they compare 44 million against 40 million, take the first, and miss that four years of equity attached to the second can make it the larger package. Writing both offers out line by line — cash, bonus target, equity per year, benefits — before comparing anything is usually enough to catch it. The reverse is just as costly. Equity only becomes worth something if the company does well, so taking that number at face value and cutting cash deeply means four ordinary years in which daily life gets tight long before any shares matter.

The other frequent error is reading a large share count as a large grant. Five thousand shares sounds substantial on its own, and companies often quote the count without the percentage. A share count by itself says nothing. In a company with one million shares outstanding, 5,000 shares is 0.5 percent; in a company with ten million, the same 5,000 shares is 0.05 percent. A tenfold difference hides inside an identical sentence. On top of that sit the price at which the shares can be bought, the number of years before they are fully owned, and whether there will ever be a way to sell them. Skipping those checks and cutting cash in exchange leaves some people with nothing to show a few years later. The questions worth asking are four: what percentage of shares outstanding the grant represents, the purchase price, the per-share price set in the most recent funding round, and the vesting and cliff terms.