In a recent viral video, Indian YouTuber and startup cofounder Ishan Sharma shares vital advice for job seekers, particularly those considering positions at startups. After facing backlash for his views on tipping culture in the U.S., Sharma took to LinkedIn to discuss a common pitfall in salary negotiations.

He emphasizes the importance of fully understanding the components of your compensation package. “When negotiating your salary, know your CTC breakdown: how much is in hand, what are the ESOPs, and how do they compare to the city’s cost of living?” he advises.

In the video, Sharma recounts a cautionary tale from a college graduate who accepted a seemingly lucrative job offer at a Silicon Valley startup. The graduate was offered a base salary of $120,000 plus an additional $120,000 in stocks, which he initially perceived as a total compensation of $240,000.

However, the reality was far less appealing. The stocks were structured to vest over four years, meaning the actual annual compensation was closer to $160,000. After accounting for living expenses and taxes in San Francisco, the graduate found himself with little left to save.

Sharma warns that while high salaries may seem attractive, especially to fresh graduates, the reality can be misleading. “Offers can sound lucrative but may come with hidden details,” he cautions. He stresses the necessity for job seekers to understand stock vesting and the real value of their compensation before committing.

Despite Sharma’s warnings, some LinkedIn users argued that a $120,000 base salary is still a strong offer for recent graduates. They questioned the tax implications and encouraged a breakdown of living expenses.

In a competitive job market, Sharma’s insights serve as a reminder for job seekers to approach salary negotiations with a clear understanding of their entire compensation package.