[Legacy] Pay Types: Calculated TDC, Annual Equity, and Refresh Equity

Overview

Pave now supports advanced compensation structures including Annual Equity, Refresh Equity, and calculated Total Direct Compensation (TDC) to help you benchmark and manage comprehensive pay bands more effectively.

Understanding the new pay Types

Annual Equity

The target equity value an employee should vest over a single year. This is commonly used in TDC calculations and is particularly valuable for companies with unique or shorter vesting schedules.

Refresh Equity

The value of non-new hire equity grants received by an employee in the past 12 months. These grants are typically awarded for retention, performance, or other organizational needs.

Calculated Total Direct Compensation (TDC)

The complete compensation an employee should receive annually, automatically calculated using this formula:

Calculated TDC = Cash Components [Base + Variable + Bonus] + Annual Equity Value

Configuring pay types

Step 1: Data Source Mapping

1. Navigate to Market Pricing → Data Sources
2. Upload your compensation data OR save a Pave datacut  
3. Map relevant fields to TDC, Annual Equity, or Refresh Equity
4. Save your mappings

Step 2: Benchmark Jobs

1. Go to Market Pricing → Benchmarking → Edit job mapping
2. Select the new compensation types in your survey mapping group  
3. Save changes and generate matches
4. Review benchmarks and apply any necessary adjustments

Step 3: Generate Pay Bands

1. Navigate to Market Pricing → Bands
2. Select Annual Equity, Refresh Equity, and Calculated TDC in Band Generation  
3. Set min/mid/max values for each compensation type
4. For Calculated TDC:
   • Ranges are automatically calculated based on your cash and annual equity selections
   • If Base + Variable + Bonus are selected, these calculate the "Cash" portion
   • If only Total Pay is selected (without Base), Total Pay becomes the "Cash" portion
   • To include bonus calculations, ensure bonus percentage values are uploaded

*TDC benchmark values come directly from survey data (not calculated) so you can compare your calculated ranges against market benchmarks*

Step 4: Upload Band Data

1. Navigate to Market Pricing → Bands → Import existing compensation bands. Define your job structure
2. Define your job structure. Click Compensation Types
3. Configure the pay types for the bands.   
   • TDC is a calculated field based on the cash & annual equity selections (see above).
   • No TDC range values need to be uploaded, since they are calculated.
   • If TDC range values are uploaded, they will be ignored.

Edit bands and add pay types

• Compare the calculated TDC range values to the TDC benchmarks directly from the market data.
• The TDC range values cannot be edited directly, but the TDC range values will update when the other values are edited.
• Add new pay types to existing band sets through Settings  

Reminders

• TDC ranges cannot be edited directly - they're calculated from cash and annual equity components
• Don't upload TDC range values in templates - they're automatically calculated
• TDC benchmarks come from survey data - only your calculated ranges are computed by the system

Frequently Asked Questions

Q: How is annual bonus included in TDC calculations? A: If annual bonus percentage is present in your band data, bonus is calculated as Base × Annual Bonus % and included in the TDC formula.

Q: What if I have both Base and Total Pay values? A: The system prioritizes Base (plus Variable/Bonus) for calculations. If Base isn't available, it falls back to Total Pay.

Q: What's the difference between Annual and Refresh Equity? A:

• Annual Equity: Used for benchmarking against standard annual vesting and TDC calculations, common among public companies
• Refresh Equity: Discretionary grants for retention, performance, or other specific organizational needs