The Full Time Equivalent is the total of all positions using the percentage of the appointment rather than the number of individual employees. This is what the headcount looks like for the same employees using each measure:
Employee A - .5 appointment
Employee B - 1.0 appointment
Employee C - .6 appointment
Employee D - .4 appointment
Using Headcount, there are 4 employees
Using FTE, there are 2.5 employees (.5 + 1 + .6 + .4 = 2.5)