Tech stocks outperformed market even when market was on a historical bull run. This might not (and probably won't) hold true in the future but it does bias all our current anecdotal samples.
I think the FAANG people I know who supposedly make 500k/yr only got to those numbers by never selling a single share and then reporting total net worth including appreciation divided by time worked. Their base salary isn't actually that crazy. People who sell all their shares for index funds didn't do as well.
I am guessing this isn't what you wanna hear but, They don't do a post hoc calculation.
It is usually the salary + stock award that will vest over 4 years. For most companies with a flat vest, the total will come to 500k/yr for certain levels.
The appreciation is all yours. Future perf bonuses which will be each 6 months or a year are on top of this. Some companies do adjust for what you're making in that year and cut down the perf bonus (In a previous company I once got a promotion without any stock because our stock had tripled in the time...) - but these companies have a serious growth outlook. Once the stock flattens, there will be a major drain and they know this.
On average over a long period, but in this case you are invested in one company over a very specific entry date and period of time, with some critical periods blocked from selling.
Facebook peeked around the end of July 2018 at 209$, if you got stocks then you might be in trouble, or already sold out after seeing 124$ during December 2018.
Some people supposedly working for Netflix have total comp mostly in cash within $100K of the $500K figure you put out. But of course if other companies total comp isn’t that good in future, Netflix won’t have any reason to give out that much cash salary either if it’s true.
I think the FAANG people I know who supposedly make 500k/yr only got to those numbers by never selling a single share and then reporting total net worth including appreciation divided by time worked. Their base salary isn't actually that crazy. People who sell all their shares for index funds didn't do as well.