FDE equity explained: RSUs, options and the terms to get in writing

By FDE Interview Prep, a SourceStrongAI company

In this post12 sections

1. Why the equity line is hard to read
2. RSUs, options and cash in lieu
3. What FDE postings and offers show
4. Vesting math: turning a grant into a yearly number
5. Private-company equity: valuation, liquidity and tender offers
6. PPUs: what they are, and what to ask
7. The questions to get answered in writing
8. Common mistakes with FDE equity
9. Put the equity beside the rest of the offer
10. Questions people ask
11. Keep reading
12. More from the blog

You have an FDE offer in front of you, and the equity line is the one number you can’t price. One Blind poster who itemized a Google FDE offer in May 2026 had RSUs on a 38/32/20/10 vest: 38% of the grant in the first year and 10% in the last. ^[1]Source 1Google (FDE) vs NVIDIA (AI Infra) – Offer comparisonPublisherBlind (teamblind.com)Source typecandidate report on Blind For the posted bands, see our forward deployed engineer salary guide.

The short answer to RSUs versus options: a restricted stock unit (RSU) turns into a share as it vests, at no cost to you, so it is worth something whenever the stock is. A stock option is the right to buy a share at a fixed exercise price, so it is worth something only above that price, and you pay to use it. At the same headline value, RSUs are the safer bet; options pay more only if the share price climbs above the price the grant was sized on, and pay nothing at or below the strike. Cash in lieu of equity is just cash. Before you compare two grants, get the instrument, the schedule, the price behind the count and the rules on selling in writing.

Why the equity line is hard to read

An equity grant is several numbers written as one. Behind the headline sit:

• The instrument. Units, options, cash instead of either, or something you have never heard of.
• The count and the price. A dollar value is a count of units times a price someone chose. Which price, and chosen when?
• The schedule. When each slice becomes yours, and what you lose if you leave before it does.
• Liquidity. Whether you can sell what has vested, and when.
• Tax. When you owe it, and on what value.

Two grants with the same headline can differ on every line, so “is this equity good?” has no answer until each is filled in.

RSUs, options and cash in lieu

RSUs

An RSU is a promise to give you a share, or its cash value, when it vests. You pay nothing to receive it. At a public company, a vested RSU becomes a share you can hold or sell. In the US, the value at vest is taxed as ordinary income, and your employer may withhold some shares to cover the tax.

A private company may grant double-trigger RSUs. The first trigger is time: your vesting schedule. The second is a liquidity event the plan defines, such as an IPO or an acquisition. Until the second trigger, a unit that has met its time condition has not settled, so you hold no share and have nothing to sell. Ask what counts as the second trigger, and whether the units expire if it never comes.

Stock options

An option is the right to buy a share at a fixed exercise price, the strike, set when the option is granted. What you would gain by exercising today is the gap between the share’s worth and the strike, times the number of options. If a share is worth less than the strike, the option is underwater: exercising it today gains nothing, and it pays only if the price rises above the strike before the option expires.

Options carry three things RSUs don’t:

• You pay to exercise. Buying the shares costs the strike times the count, plus any tax the exercise triggers.
• An exercise window. When you leave, the plan gives you a set period to exercise vested options; after it closes, they are gone. At a private company, that can mean paying real money for shares you can’t sell yet.
• Two tax treatments in the US. Incentive stock options (ISOs) and non-qualified options (NSOs) are taxed differently. With an NSO, the gap between the share’s value and the strike is taxed as income when you exercise; with an ISO, it generally is not, though it can trigger the alternative minimum tax (see the IRS guide to stock options). An ISO exercised more than 3 months after you leave is taxed as an NSO, under the ISO rules in the US tax code. Ask which you hold, and talk to a tax adviser before you exercise.

Cash in lieu

Some offers pay cash instead of equity: no upside, no liquidity problem. Ask when it is paid, whether you repay any if you leave early, and whether it replaces a grant others in the role receive.

What FDE postings and offers show

Start with what employers write. As of September 2026, here is what FDE postings from Palantir, Google, OpenAI, Scale AI and Anduril say about equity. ^{[2, 3, 4, 5, 6, 7]}Source 2Forward Deployed Software Engineer (New York, NY)PublisherPalantir (Lever)Source typecompany job postingSource 3Forward Deployed Engineer III, Generative AI, Google Cloud — Google CareersPublisherGoogleSource typecompany job postingSource 4Forward Deployed Engineer (FDE) - SF | OpenAIPublisherOpenAISource typecompany job postingSource 5Forward Deployed Engineer, GenAIPublisherScale AI (Greenhouse)Source typecompany job postingSource 6Scale AI Greenhouse job feedPublisherScale AI (Greenhouse)Source typecompany job boardSource 7Forward Deployed Engineer, Air Defense (FDE)PublisherAnduril Industries (Greenhouse)Source typecompany job posting

Of these, only Palantir’s names the instrument; our lesson on reading an FDE job posting shows how to log that gap as a question for the recruiter. Scale AI’s posting grants equity only to “eligible roles”, so ask whether yours is one. ^{[5, 6]}Source 5Forward Deployed Engineer, GenAIPublisherScale AI (Greenhouse)Source typecompany job postingSource 6Scale AI Greenhouse job feedPublisherScale AI (Greenhouse)Source typecompany job board

Offers are where the instrument appears, and here the evidence is individual candidates, each speaking for one offer:

• Google, RSUs. The May 2026 Blind offer above: RSUs on a 38/32/20/10 vest, plus a bonus and a sign-on. ^[1]Source 1Google (FDE) vs NVIDIA (AI Infra) – Offer comparisonPublisherBlind (teamblind.com)Source typecandidate report on Blind
• Cohere, options. One Blind poster reported, in January 2024, an offer from Cohere’s forward deployed engineering team, paid as all base with no bonus, “plus some options”; terms may have changed since. ^{[8, 9]}Source 8Cohere offer evaluationPublisherBlind (teamblind.com)Source typecandidate report on BlindSource 9Cohere FDE team - to join or not?PublisherBlind (teamblind.com)Source typecandidate report on Blind
• Scale AI, cash in lieu. One Reddit poster reported, in October 2025, a remote Scale AI FDE offer that included cash in lieu of ESOPs, alongside a joining bonus and a performance bonus; the poster did not state the currency or the location. ^[10]Source 10Need Help with Offer Evaluation: Scale AI FDE vs existing SDE role(5 YOE) (post by u/psinghal20)PublisherReddit r/cscareerquestionsSource typecandidate report on Reddit
• Anthropic, RSUs and options in one report. One candidate with an Anthropic software engineer offer, not an FDE offer, reported on Blind, in October 2025, being told they would get double-trigger RSUs after the first year, and that the recruiter said not to think of them as priced the same as the stock options they had received. ^{[11, 12, 13]}Source 11Anthropic offer - advice + RSU info?PublisherBlindSource typecandidate report on BlindSource 12RSU Valuation for current Anthropic offers?PublisherBlindSource typecandidate report on BlindSource 13Anthropic options exercise windowPublisherBlindSource typecandidate report on Blind

None of these is a pattern. They show that “equity” covers different instruments, so ask which one yours is.

Vesting math: turning a grant into a yearly number

A grant is a total over several years. To set it beside a salary, turn it into what you receive each year, using your own letter’s schedule. Here is a made-up grant on an even schedule and on the front-loaded shape one Blind poster reported for their Google offer. ^[1]Source 1Google (FDE) vs NVIDIA (AI Infra) – Offer comparisonPublisherBlind (teamblind.com)Source typecandidate report on Blind

# Illustrative: a made-up grant
grant = 200_000   # value at grant

def by_year(pcts):
    return [round(grant * p / 100) for p in pcts]

even  = by_year([25, 25, 25, 25])
front = by_year([38, 32, 20, 10])
print("even ", even)
print("front", front)
print("after 2 yrs", sum(front[:2]), sum(even[:2]))
# even  [50000, 50000, 50000, 50000]
# front [76000, 64000, 40000, 20000]
# after 2 yrs 140000 100000

Same total, different shape. The front-loaded schedule pays more if you leave after year two and falls every year after the first, so if you plan to stay, ask whether refreshers are granted and what decides them.

The cliff is the other number. Levels.fyi says, from user submissions, that Anthropic equity vests over 4 years: 25% in year one, then monthly in years two to four. ^[14]Source 14Anthropic Software Engineer SalaryPublisherLevels.fyiSource typeself-reported pay on Levels.fyi A schedule can put that first-year slice behind a cliff: nothing vests until the cliff date. Here is what a one-year cliff followed by monthly vesting means, with made-up inputs:

# Illustrative: 1-year cliff, then monthly
def vested_pct(months, cliff=12, total=48):
    if months < cliff:
        return 0.0
    return min(months, total) / total * 100

for m in (11, 12, 18, 30):
    print(m, "months:", vested_pct(m), "%")
# 11 months: 0.0 %
# 12 months: 25.0 %
# 18 months: 37.5 %
# 30 months: 62.5 %

Leave one month before the cliff and you keep nothing. Know your cliff date before you sign. With double-trigger units, passing the cliff meets only the time condition.

RSUs versus options, head to head

Now the comparison the headline hides. Take two made-up grants at the same company, sized to be worth the same at the share price the offer was built on (sized_at, above the strike), and see what each is worth as the price moves:

# Illustrative: same company, two made-up grants
sized_at = 20.0  # share price the offer used
rsus = 1_000
options, strike = 4_000, 15.0
for price in (10, 15, 20, 30):
    r = rsus * price
    o = options * max(price - strike, 0.0)
    print(price, "RSUs:", r, "options:", o)
print("equal at", sized_at,
      rsus * sized_at == options * (sized_at - strike))
print("cost to exercise:", options * strike)
# 10 RSUs: 10000 options: 0.0
# 15 RSUs: 15000 options: 0.0
# 20 RSUs: 20000 options: 20000.0
# 30 RSUs: 30000 options: 60000.0
# equal at 20.0 True
# cost to exercise: 60000.0

At the price the grants were sized on they are equal. Above it, the options pull ahead fast, because every option gains the full rise. At or below the strike, the options are worth nothing, while the RSUs keep much of their value. And the options still cost money to exercise. When a recruiter quotes options as a dollar value, ask what share price and strike it assumes.

Private-company equity: valuation, liquidity and tender offers

At a private company, the price behind the count is the first thing to pin down. One poster in Anthropic’s interview loop asked on Blind, in May 2026, what valuation Anthropic RSU grants are based on. ^{[11, 12, 13]}Source 11Anthropic offer - advice + RSU info?PublisherBlindSource typecandidate report on BlindSource 12RSU Valuation for current Anthropic offers?PublisherBlindSource typecandidate report on BlindSource 13Anthropic options exercise windowPublisherBlindSource typecandidate report on Blind That is the right question to ask of any private grant, and the answer belongs in writing.

Three things to understand before you trust a private valuation:

• The headline valuation is not your price. Investors in a funding round buy preferred stock, with rights employees’ common stock lacks, such as being paid first in a sale, so a funding-round price is not the value of a common share.
• Options use a different number. In the US, the strike for private-company options is set at no less than the fair market value of the common stock (for ISOs, the tax code requires it; a Section 409A valuation sets it), which can sit well below the latest round’s price. A dollar figure built on the round’s preferred price makes a grant look bigger than one built on the common-stock value.
• A grant you can’t sell is worth less than one you can.

Liquidity at a private company comes from an IPO, an acquisition or a tender offer, where the company or its investors buy shares from employees at a set price. In March 2026, Decagon’s blog announced the company’s first employee tender offer. ^[15]Source 15Decagon closes employee tender at $4.5 billion valuationPublisherDecagon blogSource typecompany blog Ask whether your employer has run one, who could sell, how much, and whether unsettled double-trigger RSUs could take part.

Our method for a private grant is to write down three versions of it: the recruiter’s number, a number with a discount you choose for time and risk, and zero. If the offer only works in the first version, you know what you are betting on.

PPUs: what they are, and what to ask

A profit participation unit is a contractual right to a share of a company’s future profit distributions, granted in place of stock. It carries no shareholder vote, and it pays only when profits are distributed or the units are bought back or sold.

Some AI-lab pay talk mentions PPUs. For Anthropic, we found no source that does:

• Anthropic’s careers page mentions competitive salary and equity packages without naming the instrument. ^[16]Source 16CareersPublisherAnthropicSource typecompany hiring page
• Levels.fyi’s Anthropic Forward Deployed Engineer page describes equity only as stock or equity grants on a 4-year vesting schedule, with no mention of PPUs. ^[17]Source 17Anthropic Forward Deployed Engineer SalaryPublisherLevels.fyiSource typeself-reported pay on Levels.fyi
• The Blind threads we found mention options and RSUs, never PPUs. ^{[11, 12, 13]}Source 11Anthropic offer - advice + RSU info?PublisherBlindSource typecandidate report on BlindSource 12RSU Valuation for current Anthropic offers?PublisherBlindSource typecandidate report on BlindSource 13Anthropic options exercise windowPublisherBlindSource typecandidate report on Blind

If an offer does name PPUs, or any instrument you don’t recognize, ask what it pays out on, when payouts happen, whether returns are capped, how often units can be sold, and how they are taxed.

The questions to get answered in writing

A verbal answer is a starting point; the offer letter and plan documents are what bind.

Here are the words for the call, once the offer arrives:

You: “Thanks, I’m excited about this. Before I compare it, could you send the equity terms in writing: the instrument, the number of units, the price per share you used and the vesting schedule?”

Recruiter: “It’s our standard package.”

You: “Understood. I’d still like it in the letter or the plan summary, so I’m comparing like with like. What happens to vested equity if I leave, and to unvested equity if the company is acquired?”

For a private-company grant, or options, add these:

You: “Is the dollar value based on the latest preferred price or the common-stock value? And for vested options, how long is the exercise window after I leave?”

Recruiter: “We use the last round.”

You: “Thanks. Could you add the share count and the strike to the letter so I can run my own numbers?”

Keep the tone curious: you are asking what the grant is, not arguing about its size. If the recruiter says the number itself is fixed, our model answer for a final equity number covers what to ask next. If the terms arrive with a short clock on them, the one-week offer deadline has the words to buy time.

Common mistakes with FDE equity

• Comparing headlines across instruments. Options and RSUs with the same dollar figure are different bets. Convert both to a yearly value first.
• Dividing a front-loaded grant evenly. Plan on the later years, or ask about refreshers.
• Treating a private valuation as a sale price. Until a tender, an IPO or an acquisition, it is a number on paper.
• Forgetting the cost of exercising. Options can cost money to keep when you leave.
• Trusting pay talk over your letter. Only the letter and the plan documents bind.

Put the equity beside the rest of the offer

Once each grant is a yearly number with its risks written beside it, you can compare whole offers. How to compare two FDE offers works through that. How to negotiate an FDE offer covers what to ask for when equity is fixed, such as level, sign-on or start date. And if you are reading H-1B filings to check a base salary, what posted bands and filings show explains why a filing never includes equity.

These questions are easy to read and hard to ask while a recruiter waits. Start with the free model answer to What are your compensation expectations?. The other offer-stage questions, including a final equity number and a one-week deadline, have model answers in Pro. Pro starts with a 7-day free trial.

Questions people ask

What is the difference between RSUs and stock options in an FDE offer?

An RSU is a promise of shares that become yours as they vest, so it keeps some value as long as the shares are worth anything. A stock option is the right to buy shares at a fixed exercise price, so it is worth something only if the shares are worth more than that price, and you pay to exercise it.

What is a profit participation unit (PPU)?

A profit participation unit is a contractual right to a share of a company’s future profit distributions, granted instead of stock, with no shareholder vote. It pays only when profits are distributed or the units are bought back or sold, so ask about caps, payout timing and the rules on selling before you compare it with RSUs.

How do I compare equity between two FDE offers?

Turn each grant into a yearly value using the offer letter’s own vesting schedule, and discount private-company equity for the chance that you cannot sell it for years. Then put the yearly equity beside base and bonus at target, with the risks written next to each number.

Keep reading

Guides

• Forward deployed engineer salary: what employers post and file

Lessons

• How to read an FDE job posting line by line
• The evidence map: what employers publish, what candidates report, how to read both
• FDE, software engineer, solutions architect, sales engineer: telling them apart

Questions

• The recruiter says the equity number is final. What do you ask next?
• If we make an offer, we will need an answer within a week. Is that workable?
• What are your compensation expectations?

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