What is a compensatory pick?
An extra pick awarded to a team that lost more qualifying free agents than it signed, in rounds 3 through 7.
Teams that lose more qualifying free agents than they sign get extra picks the following year. They fall in rounds 3 through 7, slot at the end of their round, and are capped at four per team.
The formula is not published. It is keyed to the departing player's new contract value, his playing time and any postseason awards, but the precise bands are inferred from years of outcomes rather than read off a rulebook. Everyone projecting compensatory picks in the spring, including us, is estimating.
We project conservatively on purpose. Under-promising a pick is a much smaller error than telling someone they have a third-rounder coming and watching it not arrive.
Since 2017 they can be traded, which is why they now show up in trade math rather than sitting as untouchable extras.