Even in Silicon Valley, the "vast majority of compensation" is not tied up in options because again, statistically, most employees will never realize significant gains from their options.
Take a senior engineer at a startup with a $125,000/year salary. He has options that are fully vested after four years. Let's say his options represent a .5% equity interest in the startup after dilution and there are no liquidity preferences to deal with (a highly unlikely scenario). His company would need to have a $100 million exit for him to walk away with a pre-tax amount equivalent to his gross salary over those four years ($500,000). In 2012, according to CB Insights, over half of startup exits were less than $50 million, and more than 80% were less than $200 million.
And my point isn't about average engineers. My (corrected, I admit I was overstating things with the original phrasing) point is that, in some companies, the really huge comp differentials come from non-salary compensation. So just looking at salaries is not, in those cases, a complete or honest picture.
I'm not sure I understand the point you're trying to make.
If you're not a founder or in executive management, there is rarely any value in looking at equity "compensation" at an early-stage startup. Again, as can be seen in my example, when you're dealing with sub-1% equity amounts post dilution and liquidity preferences, as most employees are, the numbers simply don't work in your favor. To walk away with a meaningful windfall that is substantially higher than the cash salary earned over your vesting period, you will need an exit that is statistically very unlikely.
Any employee who expects his or her equity stake to be on par with founders and executive management is wet behind the ears, and any individual who has dreams of becoming fabulously wealthy is far more likely to realize those dreams by starting a company than going to work for one.
