Company Numbers & Your Pay

When leaders talk about company performance, a few terms do most of the work. Money flows from the top line down to the bottom line, with a different kind of cost subtracted at each step. Once you can picture that waterfall, an earnings call stops sounding like code and starts sounding like a story: here’s what we sold, here’s what it cost us, and here’s what we kept.

Reading the income statement, top to bottom

Revenue is total sales — every dollar that came in from customers before any costs are taken out. It’s called the top line because it sits at the top of the income statement. A company can grow revenue fast and still lose money, which is exactly why the lines below it matter.

Subtract the direct cost of making what you sold (cost of goods sold) and you get gross profit — what’s left to run the rest of the business. Subtract the cost of running the business (salaries, rent, marketing — the operating expenses) and you arrive near EBITDA. Keep subtracting interest, taxes, and the accounting charges for wear and tear, and you land on the bottom line.

EBITDA — Earnings Before Interest, Taxes, Depreciation and Amortisation — strips out financing choices and accounting effects to show roughly how profitable the core operations are. It’s a favourite on earnings calls because it makes very different companies easier to compare: two firms might have wildly different debt loads and tax situations, but EBITDA lets you size up their underlying engines side by side. The flip side is that those stripped-out costs are still real — interest and taxes get paid with actual money — so EBITDA flatters a company that’s drowning in debt. Treat it as a useful lens, not the final word.

Earnings (also called net income, the bottom line) is what’s left after everything — all costs, interest, and taxes. This is the true profit, the number that ultimately belongs to the owners. An earnings call is the quarterly meeting where a public company walks investors through these figures and takes questions.

Quick anchor: revenue is what you sold; earnings are what you kept. Everything between them is a list of costs.

Your compensation, decoded

The same plain-English-once-you-know-it logic applies to your own pay. Recruiters and offer letters lean on a handful of acronyms:

• Base — your fixed salary, paid regardless of performance. This is the number that hits your account every month.
• Bonus / STIP — Short-Term Incentive Plan: a yearly bonus tied to your performance and the company’s, usually quoted as a percentage of base. A “15% target bonus” on a $100k base means roughly $15k if targets are met — it’s variable, not guaranteed.
• LTIP / equity — Long-Term Incentive Plan: shares or stock options that vest over several years (often four), designed to reward you for staying and for the company doing well over time. You typically can’t cash these in all at once.
• Total comp — base plus bonus plus the annual value of equity, added together. When a recruiter quotes an exciting number, they almost always mean total comp, not base.

A worked comp example

Say an offer is “$180k total comp.” That might break down as $120k base, a 15% STIP (around $18k target bonus), and $42k of equity per year vesting over four years. Three very different things are bundled into one headline. The base is certain; the bonus depends on performance; the equity depends on both time and the share price holding up. Knowing which is which lets you compare two offers honestly instead of being dazzled by the biggest single number.

Spot it: which number?

Read each question and decide which financial metric answers it, then tap a card to flip it.

Sort the comp pieces

Drag each item into the bucket it belongs to — or tap an item, then tap a bucket. Hit Check placement when you’re done.

How to use it

On an earnings call or in a company all-hands, trace the waterfall: when someone celebrates record revenue, ask yourself whether earnings grew too, or whether costs ate the gains. When you read your own offer or annual statement, separate the guaranteed base from the variable bonus and the time-locked equity — and ask how the equity is valued and when it vests. If a recruiter quotes “total comp,” politely ask for the base-bonus-equity split before comparing roles.

Why it matters

These words show up in every earnings report, board update, and job offer you’ll ever encounter. Understanding the journey from top line to bottom line lets you judge whether a company is genuinely healthy or just busy. And decoding base, STIP, LTIP, and total comp turns a confusing offer letter into a clear picture — so you can negotiate on the parts that matter and know exactly what you’re being paid.