Land, Stock, and the Long Con of Getting Paid in Promises

Somewhere in a WeWork-adjacent conference room right now, a startup founder is explaining to a new hire that the salary is a little below market, but the equity more than makes up for it. The options vest over four years. The company is pre-IPO. This is a ground-floor opportunity.

This pitch is approximately eight hundred years old.

The Original Equity Package

Feudal land grants—called fiefs—were the dominant compensation structure in medieval Europe for several centuries. A lord needed military service. A knight needed income. Cash was scarce, minting was inconsistent, and paying soldiers in coin required a treasury that most regional lords simply didn't maintain. So they paid in land.

The arrangement looked generous on paper. You got an estate. You got peasants to work it. You got rents, harvests, and local authority. The catch was that you didn't really own any of it in the modern sense. The land reverted to the lord if you died without an approved heir, if you committed a felony, if the lord decided you'd failed your obligations, or—and this one came up more than you'd think—if the political winds shifted and your lord lost his own standing. Your wealth was real, but it was contingent. It vested on someone else's schedule and could be clawed back under conditions you didn't fully control.

If that sounds familiar, it should.

Four-Year Vesting Schedules Aren't New

Modern equity compensation—RSUs, stock options, performance shares—operates on a logic that would have made complete sense to a 12th-century baron. The company needs your labor. You need income. Instead of paying you entirely in cash today, they pay you partially in an asset that might be worth something later, provided you stay, provided the company performs, provided the market cooperates, and provided no one changes the terms before you get there.

The cliff vesting structure, where you get nothing if you leave before year one, is basically a loyalty oath with a spreadsheet attached. Medieval knights had to show up for military campaigns or forfeit their holdings. Modern engineers have to survive the reorg or forfeit their unvested shares. The underlying psychology—tie the worker's wealth to continued service—hasn't budged.

What has changed is the sophistication of the paperwork obscuring this fact.

Illiquidity Is the Feature, Not the Bug

Here's the part of this history that tends to get glossed over: the illiquidity of feudal compensation wasn't an accident. It was a retention mechanism. Land you can't sell, in an economy with limited cash markets, keeps you exactly where the lord needs you. You're not poor. You're just not mobile.

Private company stock works the same way. Pre-IPO equity is worth whatever the last funding round said it was worth—until it isn't, and you can't sell it to find out the difference. Employees at companies that never go public, get acquired at a bad valuation, or simply run out of runway have learned this the hard way. The asset existed. The liquidity didn't.

Even public company RSUs come with blackout windows, trading restrictions, and tax timing that means you don't actually control when you can convert your compensation into something spendable. You hold the grant. The company holds the conditions.

This is not a conspiracy. It's just incentive design, and it's very old incentive design.

When the Deal Actually Worked

To be fair to the feudal system—and to modern equity—there were genuine winners. Knights who backed the right lord, survived the right wars, and held their fiefs through stable political periods accumulated real, multigenerational wealth. Early employees at Amazon and Apple and Google became genuinely rich. The deal can pay off.

But the historical record is also full of knights who served loyally for decades and died with their estates contested, their heirs dispossessed, and their years of service effectively uncompensated. The variance in outcomes was enormous, and it correlated heavily with factors the knight couldn't control—succession crises, royal politics, the health of the lord's other ambitions.

Early startup employees face a structurally similar distribution. A small number of companies return enormous equity value. The majority do not. The worker's skill and effort influence outcomes at the margin, but the bulk of the result is determined by market timing, founder decisions, and capital dynamics that no individual employee controls.

The Mesopotamian Version

Before we get too focused on medieval Europe, it's worth noting that paying workers in non-cash assets is older than feudalism by several thousand years. Mesopotamian temple economies compensated workers in rations—grain, oil, beer—rather than silver. The rations were real and necessary, but they were also controlled by the institution doing the distributing. You couldn't negotiate the price of grain. You couldn't save it indefinitely. You received what the temple decided was appropriate and you spent it on what the temple's economy produced.

This isn't a perfect analogy for equity compensation, but the underlying structure—we decide what your labor is worth, we pay you in something we control the supply of, and your ability to convert that into general purchasing power is limited—is recognizable across every era of recorded economic history.

What You Should Actually Be Asking

None of this means equity compensation is a scam. It means it's a negotiation with an information asymmetry baked in, and it always has been. The questions worth asking before accepting a compensation package heavy in deferred assets aren't new questions. They're the same ones a sensible knight should have been asking in 1150:

Who controls the conditions under which this asset vests? What happens to my position if the organization's circumstances change? What's the realistic market for this asset, and who gets to set that price? What are the conditions under which this deal gets revised without my consent?

The specific vocabulary changes—fiefs become options, lords become founders, homage becomes a four-year cliff—but the underlying negotiation is identical. You're being asked to accept future, contingent, illiquid value in exchange for present, concrete labor.

Five thousand years of that transaction says: it sometimes works out great. It sometimes doesn't. And the party with more information about which outcome is likely is almost never you.