# Usage: curl -sSL https://seed.show/hiring.offer.negotiation | bash -s <install-path>
# <install-path> is the directory where the file should land.

set -euo pipefail
[ -z "${1:-}" ] && {
  echo "install requires a path: curl -sSL https://seed.show/hiring.offer.negotiation | bash -s <install-path>" >&2
  exit 1
}
TARGET="$1"
mkdir -p "$TARGET"
DEST="$TARGET/seed-fold.AMjZ89.folded.md"

cat > "$DEST" <<'PORTDOWN_00D831B5'
<!--
This is a `.folded.md` archive — a directory packed into one markdown
file. The markers below are load-bearing; don't edit them directly.

To unpack (requires bash — if you have no shell, tell the user):
  1. curl -sSLf https://fold.dom.vin/skill | bash -s <INSTALL_DIR>
  2. <INSTALL_DIR>/fold/scripts/unfold <this-file>
     (or: unfold <this-file>  if fold/scripts is on your PATH)
-->

---
fold: true
marker: 320573
at: 2026-05-07T16:16:09Z
root: seed-pack.iVISYJ
---

<!--fold:320573@file path="README.md" mode="644"-->
# hiring.offer.negotiation

Offer construction and negotiation context for agents. What to know before benchmarking compensation, structuring total rewards, or advising on negotiation strategy.

**Level check first.** Before doing anything with compensation numbers, establish: what level is this role? (e.g. L4/L5 at FAANG, "Senior Engineer" at a Series B startup). Level is the primary determinant of comp band — title is unreliable. If level is ambiguous, ask. Wrong level = wrong benchmark = wrong advice.

**Never state a specific salary number without fetching current benchmarks.** Salary ranges compress and expand with market conditions. The structural logic here is stable; the numbers are not. Always fetch from sources.md before citing a dollar figure.

---

## What NOT to do

- Do not anchor on base salary alone. Base is the psychologically salient number; total comp is the economic number.
- Do not calculate option value as (% ownership × last round valuation). This uses the wrong share class and ignores the preference stack. See equity mechanics below.
- Do not treat a candidate's competing offer as necessarily real leverage — counter-offer acceptance rates are high (50–80%), and most candidates who accept them leave within 12 months.
- Do not recommend an offer without knowing the company's internal band for that role. Ignoring internal equity creates retention problems that materialize 6–12 months later.
- Do not advise on RSU-vs-ISO tradeoffs without modeling the candidate's specific tax situation. The answer depends on strike price, 409A basis, AMT exposure, and liquidity outlook.

---

## Mental model: joint problem-solving, not zero-sum

The framing of "negotiation" implies adversarial positions. It is usually wrong. Both sides want the deal to close. The employer needs the role filled; the candidate chose this company. The goal is to find the structure that works for both — and that often means restructuring rather than just moving numbers.

When constraints conflict — candidate wants $X, internal band caps at $Y — the resolution is rarely "pay whatever it takes." It is more often: reclassify the role to a higher band, restructure the TC mix (more equity, different vest schedule, sign-on that doesn't recur), or accept that this candidate cannot be closed at a number that works internally and move to the next one.

The internal equity problem is real and often invisible. Every offer creates a precedent. A new senior engineer brought in at $230k when existing senior engineers are at $195k creates a retention problem — not immediately, but when they find out. HR tracks this; hiring managers often forget it in the heat of closing.

**The internal equity constraint is primary. Market rate is the secondary constraint.** You cannot close a candidate priced below market. But you also cannot build a team if every offer blows up your bands.

---

## Offer structure: the components

**Base salary** — The recurring, certain component. Determines mortgage qualification, paycheck math, and psychological anchor. For candidates below staff level, base is the dominant number in their decision — not because they are being irrational, but because it is the only guaranteed component of TC.

**Annual bonus** — Typically expressed as a percentage of base (10–20% for individual contributors, 20–50%+ for leadership). Structure varies:
- *Target bonus*: what you receive at 100% performance. Usually the headline figure in offer letters.
- *Cliff vs. ramp*: some bonuses pay nothing below a performance threshold (cliff); others scale proportionally from zero.
- Candidates correctly discount bonus heavily — it is contingent. Do not use it as the primary negotiation lever.

**Equity** — The highest-variance component and the most commonly misunderstood. See equity mechanics section.

**Sign-on bonus** — One-time, non-recurring. Effective for bridging a gap (unvested equity at prior employer, relocation costs) without permanently moving base. Sign-ons typically have a repayment clause: leave within 12–24 months and you owe some or all of it back. They do not compound into future increases. Companies use them to close gaps without internal equity exposure.

**Benefits** — Healthcare premium coverage, 401k match, PTO, parental leave, equity in benefits (some companies offer ESPP). Quantify the 401k match — at 4% match on a $200k salary, that is $8k/year in real money. Premium healthcare coverage at full company expense can be worth $15–25k/year for a family.

**ESPP (Employee Stock Purchase Plan)** — Common at public companies. Employees contribute from paycheck (usually up to 10–15% of base), the company applies a discount (typically 15%) and sometimes a lookback provision. At a 15% discount with 6-month lookback, returns are effectively floored at 15% on the contributed amount.

---

## Equity mechanics

Equity is a contingent claim on future company value. The conditions under which it converts to money — and the tax treatment — vary significantly by instrument.

### RSUs (public or late-stage private)

RSUs are a promise to deliver shares when vesting conditions are met. No strike price — RSUs have value as long as the share price is above zero. Tax: FMV on vesting date is ordinary income. At public companies, this is simple: shares vest, tax is withheld via sell-to-cover. Standard grant: 4-year vest, 1-year cliff (25% at cliff, monthly or quarterly thereafter).

*Double-trigger RSUs* (common at late-stage private companies): vesting requires both a time condition AND a liquidity event (IPO, acquisition). This prevents the tax-without-liquidity problem — shares don't vest until there's a market to sell them.

**Equity refreshes:** After the initial grant vests down, high performers receive refresh grants to maintain retention incentive. Refreshes are not guaranteed and vary by company — they are an HR retention tool, not a contractual right. Ask about refresh philosophy during negotiation; it matters more than the initial grant for long-term TC.

### Stock options (startups and early-stage)

Options grant the right to purchase shares at a fixed strike price (set at 409A FMV on grant date). The option has value only if share price rises above the strike before expiration.

**ISOs (Incentive Stock Options):** Employees only. No ordinary income at exercise (but the spread may trigger AMT). On qualifying disposition (sale 2+ years after grant, 1+ year after exercise), gain is taxed at long-term capital gains rates. Annual exercise cap: $100k at ISO treatment. Exercise window: typically 90 days after termination — a critical detail for candidates leaving a company before liquidity.

**NSOs (Non-Qualified Stock Options):** Employees, contractors, advisors. The spread (FMV minus strike price) at exercise is ordinary income, subject to payroll taxes, regardless of whether shares are sold. No $100k cap.

**409A valuation:** Private companies must obtain an independent 409A appraisal to set the strike price at or above FMV of common stock. Done annually or after material events (funding rounds, acquisitions). The 409A value is the common stock FMV — always lower than the preferred stock price investors paid, because preferred has liquidation preferences and other rights that common lacks.

**Valuing options correctly:** An option for 0.1% of a company at a $1B preferred valuation is not worth $1M. Steps: (1) get the 409A common stock FMV, not the preferred price; (2) model the preference stack — how much does preferred get before common participates?; (3) apply your probability estimate of a liquidity event; (4) discount for time and dilution. For a company with significant preference overhang, options can be worth a fraction of the naïve calculation.

**Exercise window:** Most options expire 90 days after leaving the company. Some companies offer extended windows (2–10 years). An extended exercise window is a significant benefit — it removes the "exercise or lose it" pressure and allows for better tax planning.

### Vesting cliff and acceleration

**Single-trigger acceleration:** All unvested equity accelerates on a single event (usually acquisition). Less common — acquirers dislike it because it removes retention incentive post-close.

**Double-trigger acceleration:** Equity accelerates only if two conditions are met — typically acquisition + termination without cause or constructive dismissal within 12–18 months. This is the standard in most offer letters. Negotiate for it if it is absent.

---

## Negotiation dynamics

**The competing offer:** A candidate who discloses a competing offer is signaling the price of their departure — not necessarily their intent to leave. Standard response: extend your best sustainable offer, don't get into a bidding war on numbers you can't support internally. Bidding wars create internal equity problems and often fail to retain anyway — acceptance of counter-offers from current employers has high subsequent attrition.

**The "we don't negotiate" position:** Some companies claim firm offers. It is usually not firm. The levers are: start date (earlier or later), sign-on structure, equity refresh guarantee, remote work, title, and sometimes base. Even "firm" offers bend on non-cash components.

**Base vs. total comp framing:** Candidates anchor on base; companies prefer to negotiate on TC. Neither party should accept the other's frame uncritically. Translate every offer to TC before comparing. A $180k base at one company vs. $165k at another means nothing without knowing the equity, bonus, and benefits values.

**Signing bonus as bridge:** If base is constrained by internal bands but the candidate needs $X, a sign-on can close the gap without creating a recurring internal equity problem. Both sides can agree to this — it is not a trick. Be explicit about the repayment cliff.

---

## What AI is changing

**Automated benchmarking:** Tools like Pave, Radford, and Carta are moving compensation benchmarking from annual surveys to near-real-time. AI layers on top of these can suggest offer bands dynamically, flag internal equity compression in real time, and identify outliers before they become attrition risks. The structural logic of how bands work hasn't changed; the speed and coverage of data has.

**Pay equity analysis:** AI tooling is being applied to identify gender, race, and tenure-based pay gaps within companies. Some companies run these proactively (and adjust accordingly); others only do so under legal pressure. This affects offer construction — companies with active pay equity programs have tighter bands and less discretion at the individual offer level.

**Offer recommendation engines:** Some ATS and HRIS platforms now generate offer recommendations from benchmarking data. These recommendations are only as good as the job-matching logic that maps the role to the survey taxonomy. Mismatched job levels (mapping a senior IC to a manager survey cut, or vice versa) produce wrong recommendations. Always sanity-check AI-generated offer numbers against the actual job description and internal band.

**Pay transparency laws:** California (SB 1162), Colorado (Equal Pay for Equal Work Act), New York City, and Washington require salary range disclosure on job postings. This is compressing the range of offer discretion — when candidates know the posted range, they anchor to the top. Companies in these jurisdictions are adjusting their posted ranges to be tighter and higher. If you are operating in a transparency-law state, the posted range is a commitment; opening offers at the bottom of a wide range creates legal and reputational risk.

**What stays human:** Retention judgment (whether a specific person is worth the equity refresh cost), counter-offer dynamics (whether to engage at all, and how to structure it), and equity refresh strategy (when, how much, to whom) all require context that market data cannot supply. These decisions sit at the intersection of manager judgment, team dynamics, and individual employee trajectory — no benchmark resolves them.
<!--fold:320573@file path="glossary.md" mode="644"-->
# glossary

Total compensation components and equity mechanics. Reference when a term appears in an offer letter or negotiation context.

---

## Cash components

**Base salary** — Fixed annual salary, paid on a recurring schedule (biweekly or semi-monthly). The certain component of TC. Determines mortgage qualification, tax withholding, and the psychological anchor in negotiation. Does not include bonus or equity.

**Annual bonus (target vs. actual)** — A variable cash payment, typically expressed as a percentage of base salary (e.g., "15% target bonus"). *Target bonus* is what you receive at 100% individual and company performance — it is the number in the offer letter. *Actual bonus* varies by performance. Bonus may have a cliff (zero below a performance threshold) or ramp (proportional from zero). Not guaranteed; candidates should discount it.

**Signing bonus (sign-on bonus)** — A one-time lump-sum payment at hire. Non-recurring — it does not appear in future years. Typically subject to a repayment clause: leave within 12 or 24 months and you repay a prorated or full amount. Used to close gaps (unvested equity at prior employer, relocation costs) without permanently affecting base salary or internal equity bands.

**ESPP (Employee Stock Purchase Plan)** — Common at public companies. Employees contribute a percentage of base (typically up to 10–15%) during an offering period. At the end of the period, shares are purchased at a discount (typically 15%) to the lower of the stock price at the beginning or end of the period (the lookback provision). The discount is taxable as ordinary income at purchase.

**401k match** — Employer contribution to the employee's 401k retirement account, conditional on employee contributions. Typical: 50% match on up to 6% of salary (= 3% of salary in employer contributions). Some plans match dollar-for-dollar up to 4–6%. Vesting schedules vary — cliff (immediate full vesting after X years) or graded (partial vesting over time). Quantify this when comparing offers.

**Benefits value** — Healthcare premium coverage (employer share of monthly premium for employee and family), dental, vision, life insurance, short- and long-term disability. Full family healthcare coverage at employer expense can be worth $15–25k/year. Some companies offer HSA contributions, mental health benefits, or childcare subsidies with real dollar value.

---

## Equity: public company RSUs

**RSU (Restricted Stock Unit)** — A grant of company shares that vests over time. No purchase price required — RSUs have value as long as the share price is above zero. Tax: the fair market value of shares on the vesting date is ordinary income, subject to withholding (usually via sell-to-cover, where a portion of the vesting shares is automatically sold to cover taxes).

**Grant value** — The dollar value of an RSU grant, calculated as (number of shares × stock price at grant date). This is the number in the offer letter. Actual value at vesting depends on the stock price at each vest date.

**Annualized grant value** — Grant value divided by the vesting period (usually 4 years). Used to express equity as a TC component: a $400k RSU grant over 4 years = $100k/year annualized.

**Vesting schedule** — The timetable for when RSUs become yours. Standard: 4-year vest, 1-year cliff.

**Cliff** — The minimum tenure before any equity vests. Standard is 12 months. Leaving before the cliff means forfeiting the entire grant.

**Equity refresh** — Additional RSU grants made to existing employees, typically annually as part of performance reviews. Refreshes are not guaranteed — they are a retention tool, not a contractual right. The cadence and size of refreshes vary widely by company.

---

## Equity: startup options

**Stock option** — The right (not obligation) to purchase a specific number of shares at a fixed price (strike price) within a set time window. Has value only if the share price rises above the strike price before expiration.

**Strike price (exercise price)** — The price per share the option holder pays to purchase shares. Set at or above 409A FMV on the grant date. If the company's share price rises above the strike, the option is "in the money."

**FMV (Fair Market Value)** — For public companies, the market price. For private companies, the 409A appraised value of common stock. Distinct from the preferred stock price investors pay.

**409A valuation** — An independent third-party appraisal of the FMV of a private company's common stock, required by IRS Section 409A. Done annually or after material events (funding rounds, acquisitions). The 409A value is the common stock FMV — always lower than the preferred stock price, because preferred stockholders have liquidation preferences and other rights that common does not.

**ISO (Incentive Stock Option)** — Can only be granted to employees. No ordinary income tax at exercise (but the spread may trigger Alternative Minimum Tax). Qualifying disposition (sale 2+ years after grant date, 1+ year after exercise date) qualifies for long-term capital gains rates. Annual limit: $100k of options becoming exercisable in a given year can receive ISO treatment. Exercise window after termination: typically 90 days (some companies offer extended windows).

**NSO / NQSO (Non-Qualified Stock Option)** — Can be granted to employees, contractors, and advisors. The spread (FMV minus strike price) at exercise is taxed as ordinary income, regardless of whether shares are sold, and is subject to payroll taxes. No annual cap. After termination, typically 90-day exercise window.

**AMT (Alternative Minimum Tax)** — A parallel tax calculation that can apply when exercising ISOs. The spread (FMV minus strike price) at exercise is an AMT preference item — it may trigger additional tax even if no shares are sold. Candidates with significant ISO exercises should model AMT exposure before exercising.

**Exercise window** — The period during which an option can be exercised. Most offers: 10 years from grant date, or 90 days after termination, whichever comes first. Extended exercise windows (2–10 years post-termination) are a significant benefit — they remove the "exercise or lose it" pressure and enable better tax planning.

**Early exercise** — Some option grants allow exercise before vesting (purchasing unvested shares). Allows the holder to start the long-term capital gains holding period clock early and file an 83(b) election to lock in the current FMV as the cost basis. Useful when the 409A value is low (early-stage company) and the expected appreciation is high.

**83(b) election** — An IRS election to recognize the fair market value of unvested shares as income at grant date (rather than at each vest date). Filed within 30 days of the grant or early exercise. If the company succeeds, this converts future appreciation from ordinary income to capital gains. If the company fails, the ordinary income recognized at grant is not recoverable.

**Secondary liquidity** — A transaction in which early shareholders (including employees) sell shares to a buyer before a public liquidity event. Common mechanisms: secondary funds, tender offers run by the company, and direct sales. Provides liquidity without a public market. Availability depends on company policy and shareholder agreements.

**Liquidation preference** — A right held by preferred stockholders to receive a minimum return before common stockholders receive anything in a sale or liquidation. A 1x non-participating preference means preferred gets their money back first; anything above goes to common. A participating preference means preferred gets their money back AND participates in the remaining proceeds. For option holders, a significant preference stack can mean common stock is worth zero in a "down exit."

**Preference stack** — The total set of liquidation preferences held by all preferred stock classes. Affects the value of common stock (and options) in any exit below the total preference amount. Understanding the preference stack is required to value startup equity correctly.

**Cap table** — The table of all equity ownership in a company: who owns what, in what instrument, at what price. Includes founders, employees (via option pool), and investors (preferred). Required to model dilution and liquidation preferences.

**Option pool** — Shares reserved for employee equity grants, carved out of the cap table. Typically 10–20% of shares on a fully diluted basis. New option pool creation (usually required as a condition of a financing round) dilutes existing shareholders before investors, not after.

**Vesting cliff** — See cliff above. Applies identically to options: no options vest until the cliff date (typically 12 months).

**Single-trigger acceleration** — All unvested equity vests on a single event (typically acquisition). Uncommon in most offer letters — acquirers dislike it because it removes post-close retention incentive.

**Double-trigger acceleration** — Unvested equity accelerates only if two conditions are both met: (1) a change of control (acquisition) AND (2) termination without cause or constructive dismissal within a specified window (typically 12–18 months post-close). The standard negotiating position for employees; ask for it if it is absent.
<!--fold:320573@file path="sources.md" mode="644"-->
# sources

Fetch these at task time. Salary benchmarks change; fetch before citing numbers.

## Compensation benchmarking

1. **Levels.fyi** — crowd-sourced TC data (base + bonus + equity), normalized by company and level. Strong coverage for FAANG and late-stage tech. Methodology explains what "total compensation" means in their data:
   https://www.levels.fyi/methodology

2. **Pave** — real-time benchmarking from connected HRIS systems. Widely used by People teams to build and maintain internal bands. Methodology covers how they aggregate and construct percentile cuts:
   https://www.pave.com/blog/how-pave-benchmarking-works

3. **Radford Global Compensation Surveys (Aon)** — enterprise standard survey methodology. Covers job matching, aging factors, and percentile cuts. What "50th percentile market rate" actually means in survey terms:
   https://radford.aon.com/surveys

4. **Carta Total Comp** — real-time equity and cash benchmarking from Carta's cap table data. Particularly useful for startup equity benchmarking:
   https://carta.com/blog/total-compensation-benchmarking/

## Equity and tax

5. **IRS Section 409A guidance** — Treasury regulations on stock option FMV requirements. The source for understanding why 409A valuations exist and what noncompliance costs:
   https://www.irs.gov/pub/irs-drop/n-05-01.pdf

6. **Holloway Guide to Equity Compensation** — the most comprehensive practitioner reference for equity: option mechanics, RSU mechanics, 409A, AMT, early exercise, secondary markets, negotiation. Written for employees, not lawyers:
   https://www.holloway.com/g/equity-compensation

7. **FASB ASC 718 (Stock Compensation)** — accounting standard governing how companies expense equity awards. Relevant to understanding grant date fair value and why expense on the income statement differs from economic value to the employee:
   https://asc.fasb.org/718

## Pay transparency laws (fetch jurisdiction-specific)

8. **California SB 1162** — requires employers with 15+ employees to post pay ranges on job postings; requires annual pay data reporting to DFEH:
   https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB1162

9. **Colorado Equal Pay for Equal Work Act** — requires salary and benefit range disclosure in all job postings, including remote roles that could be performed in Colorado:
   https://leg.colorado.gov/bills/sb19-085

10. **New York City Local Law 32** — requires employers with 4+ employees to include salary ranges in job postings for NYC roles:
    https://www.nyc.gov/site/cchr/media/salary-transparency-law.page

11. **Washington State Pay Transparency Law (HB 1696)** — requires posting salary range and benefits description for all job postings:
    https://app.leg.wa.gov/billsummary?BillNumber=1696&Year=2023

## Total rewards frameworks

12. **SHRM: Designing and Managing Base Pay Systems** — practitioner overview of how companies structure base pay, including internal equity band construction and market positioning decisions:
    https://www.shrm.org/topics-tools/tools/toolkits/designing-and-managing-base-pay-systems
<!--fold:320573@end-->
PORTDOWN_00D831B5

# ── post ──
MARKER=$(awk '/^---$/ { f++; if (f==2) exit; next } f==1 && /^marker:[[:space:]]/ { sub(/^marker:[[:space:]]+/, ""); print; exit }' "$DEST")
[ -z "$MARKER" ] && { echo "seed: archive has no marker — corrupt" >&2; exit 1; }
awk -v m="$MARKER" -v outdir="$TARGET" '
  BEGIN {
    # Match <!--fold:<m>@file path="X"--> with an optional mode attr after
    # the path (fold emits  mode="644"  on executables).
    file_re = "^<!--fold:" m "@file path=\"([^\"]+)\"( mode=\"[0-9]+\")?-->$"
    end_re  = "^<!--fold:" m "@end-->$"
  }
  $0 ~ end_re { if (current) close(current); exit }
  $0 ~ file_re {
    if (current) close(current)
    line = $0
    sub(/^<!--fold:[^@]+@file path="/, "", line); sub(/".*$/, "", line)
    current = outdir "/" line
    dir = current; sub(/\/[^\/]*$/, "", dir)
    if (dir != current) system("mkdir -p \"" dir "\"")
    printf "" > current
    next
  }
  current { print >> current }
' "$DEST"
SEED_EXTRACTED=$(find "$TARGET" -type f -not -path "$DEST" 2>/dev/null | wc -l)
if [ "$SEED_EXTRACTED" = "0" ]; then
  echo "seed: archive contained no files — refusing to delete the source" >&2
  echo "  archive preserved at: $DEST" >&2
  exit 1
fi
rm -f "$DEST"

echo "" >&2
echo "✓ seed unpacked → $TARGET ($SEED_EXTRACTED files)" >&2
find "$TARGET" -type f | sort | while IFS= read -r _sf; do
  echo "  ${_sf#${TARGET}/}" >&2
done
echo "" >&2
if [ -f "$TARGET/SKILL.md" ]; then
  echo "This seed contains a skill (SKILL.md). Install it in your agent's skills directory." >&2
  echo "" >&2
fi
echo "Install the seed skill if not already installed:" >&2
echo "  https://seed.show/skill" >&2
echo "" >&2
echo "Publisher prompt:" >&2
sed 's/^/  /' >&2 <<'__SEED_PROMPT_END_AC1F2B__'
You have offer construction and negotiation context for agents. Read README.md for the structural mental model — offer components, equity mechanics, negotiation dynamics, and what AI is changing. Fetch sources.md for compensation benchmarking sources (fetch at task time; salary numbers change). Read glossary.md for precise definitions of every TC component and equity term. Never state a specific salary number without fetching current benchmarks from sources.md first. To share your own context bundles: curl seed.show/skill | bash
__SEED_PROMPT_END_AC1F2B__
exit 0