Offer Letter Explained: Every Section in Plain English
Seven sections. Each matters more than it looks.
Role and Title
Your title follows you to your next job. Confirm reporting line, location, and remote-work expectations in writing. "Hybrid" means different things to different companies.
Compensation
Base salary, bonus structure, guaranteed first-year amounts. Get the bonus formula. "Target of 15% based on company and individual performance" without a formula means they can pay anything from 0% to 15%.
Equity
Shares, vesting schedule (usually 4 years with 1-year cliff), strike price, acceleration on change of control. Ask for total outstanding shares so you know what percentage your grant represents.
Benefits
Health, dental, 401(k) match, PTO, parental leave. Ask for the actual benefits summary, not bullet points. "Competitive health benefits" could mean a $6,000 deductible.
Restrictive Covenants
Confidentiality, IP assignment, non-compete, non-solicit. Most negotiable and most consequential section.
Have a lease in front of you right now?
Upload it. Our AI flags every red flag mentioned in this guide — in under 10 seconds.
Decode My LeaseFrequently asked questions
Should I sign on the spot?
No. A reasonable employer gives 48-72 hours. Pressure to sign immediately is itself a red flag.