Equity Compensation Calculator

Value an equity grant across vesting with exercise cost and dilution.

About Equity Compensation Calculator

Nothing vests before the cliff, after which the accrued portion vests immediately. Options are only worth the spread above the strike price, so a grant can be worthless despite a large share count. Quoted equity values usually ignore both dilution and exercise cost, which together can halve the realisable value of a grant at an early stage company.

Formula

Equity Compensation

Vested value = vested shares × (share price − strike price)

cliff: No shares vest until the cliff is reached, then the accrued portion vests at once
dilution: Later funding rounds reduce the ownership each share represents

Worked example

With the default values below, Equity Compensation Calculator returns Vested Value Net of Exercise Cost of $24,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Shares grantedminimum 0: 8,000
Current share priceminimum 0: 12
Strike priceminimum 0: 4
Vesting periodaccepts 0.5–10 years: 4 years
Cliffaccepts 0–48 months: 12 months
Months elapsedminimum 0 months: 18 months
Expected annual dilutionaccepts 0–50 %: 12 %

Results

Vested Value Net of Exercise Cost: $24,000.00
Shares Vested: 3,000
Cost to Exercise Vested Shares: $12,000.00
Annualised Equity Value: $16,000.00
Full Grant Value After Dilution: $38,380.50

Step by step

1Values used
2Equity Compensation
3Vested Value Net of Exercise Cost= 24,000.00
4Shares Vested= 3,000
5Cost to Exercise Vested Shares= 12,000.00
6Annualised Equity Value= 16,000.00
7Full Grant Value After Dilution= 38,380.50

Assumptions and limits

The result is derived only from the 7 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or fees or charges into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Equity compensation involves substantial risk and complex tax treatment that varies by instrument and jurisdiction. Private company shares may be illiquid or worthless. This is not financial or tax advice; consult qualified advisers before exercising or relying on equity value.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Equity compensation involves substantial risk and complex tax treatment that varies by instrument and jurisdiction. Private company shares may be illiquid or worthless. This is not financial or tax advice; consult qualified advisers before exercising or relying on equity value.

Frequently Asked Questions

How is Equity Compensation calculated?

Vested value = vested shares × (share price − strike price) Nothing vests before the cliff, after which the accrued portion vests immediately. Options are only worth the spread above the strike price, so a grant can be worthless despite a large share count.

Why does Equity Compensation matter?

Quoted equity values usually ignore both dilution and exercise cost, which together can halve the realisable value of a grant at an early stage company.

What values do I need to enter?

This calculator takes 7 inputs: Shares granted, Current share price, Strike price, Vesting period, Cliff, Months elapsed, Expected annual dilution. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.