Two offers, compared with arithmetic

Do the sum on paper

Two offers feel like a choice between two vibes. They are mostly a choice between two spreadsheets, and the spreadsheet takes twenty minutes.

Here is one worked all the way through. The currency is rupees and the method is currency-agnostic; substitute your own.

The two offers

A: product start-up, fully remote. Quoted as ₹20,00,000 CTC: fixed cash ₹15,60,000; employer provident fund ₹86,400; gratuity accrual ₹75,000; insurance for self ₹18,000; variable at target ₹2,60,000. Six thousand share options at a strike of ₹180, current fair value ₹180.

B: global capability centre. Quoted as ₹18,50,000 CTC: fixed cash ₹14,04,000; employer provident fund ₹86,400; gratuity accrual ₹67,500; family insurance ₹96,000; contractual bonus of 8% of fixed, ₹1,12,320. Three days a week in the office, an hour each way.

A looks ₹1,50,000 better. Now do the work.

Step 1: guaranteed cash

The money that arrives whatever happens.

A: 15,60,000
B: 14,04,000 + 1,12,320 (contractual)  = 15,16,320

Nearly identical. The headline gap has already almost vanished, because A’s extra was mostly a target.

Step 2: expected cash

Ask what the variable actually paid. Suppose A’s team has paid 50% of target for two years:

A: 15,60,000 + 1,30,000 = 16,90,000
B: 15,16,320

A is ahead by about ₹1,74,000, and roughly ₹1,30,000 of that is contingent on a payout history you should verify rather than assume.

Step 3: employer contributions

A: 86,400 + 75,000 = 1,61,400
B: 86,400 + 67,500 = 1,53,900

Real money, close to equal, and gratuity only vests after a qualifying period, five years in India, so treat it as long-term rather than annual.

Step 4: benefits you would otherwise buy

A insures you. B insures your family. If comparable family cover would cost you ₹45,000 a year, B is ₹45,000 better in avoided spending. For somebody with dependants or a parent to cover, this line is often larger than the salary difference and is the one people leave out.

Step 5: costs of the job itself

B requires three days on site, an hour each way:

transport: ~3,500/month  = 42,000/year
time: 6 hours/week x 45 weeks = 270 hours

Money is easy to net off. The 270 hours are not money, and you should not convert them into money: write them down as hours and decide what they are worth to you, which depends entirely on your life.

Step 6: equity

Six thousand options at a ₹180 strike when the fair value is ₹180 are worth zero today. They may be worth a great deal later. The honest entry in the comparison is: expected value zero, with an unquantified upside I could not value because I do not have the share count or the preference stack.

Never let equity break a tie you would otherwise decide the other way. It is a bonus if it lands.

The result

              A            B
guaranteed    15,60,000    15,16,320
expected      16,90,000    15,16,320
employer      1,61,400     1,53,900
benefits      —            +45,000
job costs     —            -42,000, -270 hours
equity        0 (upside)   0

A is ahead by roughly ₹1,20,000 of expected cash and 270 hours. B is ahead on certainty and family cover. That is a real decision rather than a difference in headline numbers, and you can now hold it in your head.

The column you cannot compute

Everything above is the easy half. The half that decides how the next two years actually go:

• Who you would report to. The largest single factor in whether a job is good, and impossible to quantify. Weight what you saw: did they listen in the interview, could they describe the team’s failures, did they answer “why is this role open” without hedging?
• What you would learn, and what job it makes possible afterwards. Early in a career this frequently outweighs a 10% pay difference. Later, with dependants, it frequently does not. Both are correct positions and only you know which one you are in.
• The company’s stability. A start-up’s cash runway is a fair question and a good one will answer it.

The regret test

When the arithmetic is close, ask which rejection you would rather explain to yourself in a year. Turning down more money for a manager you trusted is a decision people rarely regret. Turning down a job you wanted for eight per cent more is a decision people regret constantly.

The limitation

You are choosing under bad information, and no amount of care fixes that. The interview showed you three people for four hours; the reality is forty people for two years. Do the arithmetic because it removes the errors you can remove, then accept that the residual uncertainty is large and that this is what everybody else is doing too.