This article explains why you will never get wealthy/rich when working for a startup. IMO, Tthis level of bonus is not worth the effort.
When you have the brackets set up, you put a multiplier next to them. There are no hard and fast rules on multipliers. You can also have many more brackets than four. I am sticking with four brackets to make this post simple. Here are our default brackets:
Senior Team: 0.5x
Director Level: 0.25x
Key Functions: 0.1x
All Others: 0.05x
Then you multiply the employee’s base salary by the multiplier to get to a dollar value of equity. Let’s say your VP Product is making $175k per year. Then the dollar value of equity you offer them is 0.5 x $175k, which is equal to $87.5k. Let’s say a director level product person is making $125k. Then the dollar value of equity you offer them is 0.25 x $125k which is equal to $31.25k.
Lets say you get a package at around $150K as a key employee. Thats a bonus plan valued at $15K per year. Thats peanuts compared to the effort they are asking from you.
Employee Equity: How Much? – AVC : http://avc.com/2010/11/employee-equity-how-much/