Equity compensation at several public companies like Google and Facebook is in the form of direct…

Equity compensation at several public companies like Google and Facebook is in the form of direct stock grants, yes. Employees can sell these shares once vested on the public market for full retail value during either an open trading window following public (typically quarterly) investor disclosures or can in the Fall opt in to forcibly auto-selling all of their shares for the next year as soon as they vest. (The latter is my recommended approach.) As compensation this is amazing for employees because public shares are basically same-as-cash and come with wildly less risk than options which can quickly be rendered worthless.

In terms of levels, it will vary significantly per employee even at a given level (hence my encouragement for people to negotiate here!) but I would say that if you’re an L3 (a few years industry experience) your equity comp is going to help round out your annual bonus but not be life changing. As an L4 (mid-career) it will probably double your cash bonus. At L5 (senior) it will probably start approaching your cash comp. At L6 (staff) it may be significantly larger than your total cash comp. By the time you get to L8 (Director and above) I would expect cash comp to be a very boring and small percentage of overall compensation.

Put another way, folks who are getting paid millions of dollars a year in total compensation are getting only a tiny slice of that from their cash base salary. So long term that’s really the wrong place to fixate on when looking to negotiate and grow comp.

Back to your point on startups — they are not economically rational since you can probably make more risk adjusted returns at a large stable company. If all you care about is risk adjusted returns you should definitely never start a startup or work for one. But that doesn’t mean that those who do startups are dumb or even that they haven’t run through the math; they do it because they love making something new. They love the process. And they are willing to take an economic hit to live the dream. That decision, when made eyes wide open, deserves our respect.