I do the job of a senior engineer and yet am paid a bit less than what's listed for an entry level engineer. And I live an incredibly comfy life. What's the catch? Are these for more than 40 hours a week? Is silicon valley really that expensive? Or are they literally giving college grads enough money to retire by 35?
There is not necessarily a catch. Pay is not based on cost of living -- it's set by market rates, and the market rate for software engineers in these areas who can do the jobs required at these companies is high. All these companies operate at an immense scale where an engineer, through what is often a simple change, can add significant value to the company.
So, yes. For now, these companies are giving college grads enough money to retire by 35 (assuming the college grads are halfway financially savvy).
That's assuming you want to leave the whole 2 million principal in your will to your children. I don't see why - if you want to retire, you can consume the whole principal while you live.
You can't plan to spend your last dollar on your deathbed unless you can predict every expense, the market, and the day you'll die, especially over a retirement that long (potentially 50+ years). Planning to leave something behind is really your only chance, unless you're comfortable with a very high chance of bankruptcy along the way.
Even at a meager 2% interest that’s $40k a year. That’s a comfortable wage in much of the USA, especially if you’ve been camping in an RV for a decade to retire.
I don't believe anything I read on HN about the lifestyles of the SV elite, but I think this scenario is comical if it were representative.
You get paid well into six figures but have "to camp in an RV for a decade", and then you retire with a $40K income. You could have just gotten a $40K job at some place* that didn't kill your soul! In ten years, you'd be making at least $60K. And if you burned out for whatever reason anyway, you could go on disability.
You read through all the advice in these blogs [1][2]. Seriously.
If you are invested in low cost index funds, most assume you can safely withdraw 4% a year and not deplete your principal. If you're retiring at 35, you might want a greater safety margin, so let's say 3%. That gives you 60K a year.
How do you retire on 60K a year? Obviously take what I'm saying with a grain of salt as I'm a relatively young person and haven't done any of this yet. But...60K is the median household income in the US, so half of families in the US live on less. If you're retired, you can probably save in ways others can't. For instance:
* Housing. You don't need to stay in a high cost of living city, so move to a much cheaper area (maybe a college town).
* Education. You have much more time, so send your kids to all public education, and use your extra time to educate them further.
* Debt. You have a ton of assets. Why hold any debt?
* Automobiles. Bike instead, if you're physically able.
* Health. Probably the hardest one since insurance in the US is tied to employment. I understand the recommended approach here is to pay out of pocket for a plan, but many have trouble with this. Of course, the standard advice is to use the extra time you have due to retirement to stay as healthy as possible, but I acknowledge this isn't a perfect plan.
Good advice. Just one nitpick: The 4% rule, which states you can as a rule of thumb safely withdraw 4% of the starting capital per year in real dollars (IE increase it each year to account for inflation), is intended for a standard retirement period (65+) and does expect the principal to decrease.
There's more debate as to what would be a safe withdrawal rate over the long term without depleting principal, but I expect 3% would be a bit on the high side, although not unreasonable if one has a backup like part-time work.
Of course, that's assuming you withdraw 3% of the initial amount each year and adjust for inflation. Obviously if you only withdraw 3% of the current amount each year you'll never run out, by definition, but you might end up with shrinking spending money.
Still, just a nitpick. I agree with you in principle for sure.
That's a bit incorrect. Returns from a typical investment portfolio have been over 4% for the last 10-20 years, so that's the amount you can withdraw without depleting any principal. If you're looking to consume your whole principal by the time you die you can go way ahead of 4%, easily double that.
> Returns from a typical investment portfolio have been over 4% for the last 10-20 years, so that's the amount you can withdraw without depleting any principal.
Past results do not guarantee future performance. People in the FIRE community generally look at market performance since the final decades of the XIX century. For many, even these numbers do not guarantee anything, as the growth during these days reflected USA entering its golden age. Who knows if it will last through XXI century.
at this point a reasonable response is "there are no guarantees". If the 4% rule was back-tested through the great depression and generally came out fine, it's probably in the right ballpark.
As another FIRE blogger puts it, "3% or less is a near sure bet as anything in this life can be"
We've basically been in a continuous bull market over the past 11 years; it's not a representative sample. Nor is any period of 10-20 years nearly long enough to tell you much about long term stock market returns. Plus, valuations (ie P/E or P/B) are significantly inflated currently compared to the past. Since valuations can't inflate forever, future market gains over the long term are expected to be lower than past.
In addition, we're talking about a real withdrawal rate; a 4% real rate of withdrawal will be approximately a 6% nominal rate assuming inflation sticks around 2%. It's very unlikely you're going to maintain that from a balanced portfolio over the long term without depleting principle at all. Might be possible with an all-stock portfolio if you get lucky, but significant chance of failure if you get a poor sequence of returns.
Easily by not living in the Bay Area. People FIRE at 1 million, which I always found a bit silly considering we're in the midst of an amazing market hyperinflated by some rather concerning fiscal policy, but with 2 you can weather a lot of bad years.
Family with kids in a big, expensive city? Probably not.
Monthly expenses = 3k mortgage+ 500 property taxes + 2k daycare for one child(or 529) + 1.5k for food and other = 84k
Without compounding interest you need 10 years to get 2m, and these salaries are for 5+ or more years of experience. (And you need down payment, etc.).
Living in those areas is expensive.
If you are making 500k, that's a different story :-)
Yup, I forgot about it. 7-8k max out of pocket (in-network) for family. In some companies there is also some payment for the health plan out of pocket. But the diff here is that on HSA plans the out of pocket comes before taxes.
With no or self-sustaining offspring, you can retire on $US2M in savings just about anywhere in the world; not silicon valley and a handful of similar locations. Most of the world, including many places you would consider holiday resorts and amazing places to live, is quite achievable if you stay away from boats, fast cars and gambling. Its how people doing the same job in other cities get by earning half as much.
Now I wonder how many of these jobs are 100% work from home. I'm not sure a salary doubling could take me away from my family and into commuting an hour a day. But I mean, if they're going to pay me to engineer in my pyjamas, sure! =)
None of them are 100% work from home. Work from home pays work-from-home market rates, not high end silicon valley rates. There will be some, but they will have negotiated a switch from office work to remote work after a few years, or have hard to source specialist skills.
I effectively have 100% work from home for a FANG. I live in the Midwest and my compensation is the same as engineers working from HQ. I worked from HQ for a few years then told my manager I was gonna quit to move closer to family and we ended up being to arrange this. I fly to HQ a few times a year to have face time with my team. Not sure how long this arrangement will last, but it’s been awesome so far.
Pay is partly based on cost of living, and cost of living helps to set the market rates.
You'd have to pay me 10 times more than I get now, with a huge hiring bonus, to make me move to San Francisco. I'm not alone in this thinking. This is why the market rate is high.
Part of that is sort of circular, due to the bidding war for housing. Part is that some people just hate the political insanity. Part is that people have family connections elsewhere and they have hobbies that are incompatible with San Francisco.
Let’s say you’re the median American SWE getting paid $80k a year. You’re saying you wouldn’t move to SFBA for less than $800k/yr in total compensation? I find that hard to imagine.
I can see what it costs. Getting $800k/yr means a house of about $1,600,000 should be affordable, but that gets you trash. Getting a "house" that PHYSICALLY TOUCHES the neighbor's house will go for more than that in a semi-tolerable San Francisco neighborhood. That is substandard living conditions.
How do you afford housing wherever you make $80k? Unless literally everything comparable costs 10x in SF, there's no logical way you can say 10x is the mark at which SF wages are pegged at.
$1.6m will get you 2,200 square feet of sweet, sweet detached single family living in Pacifica, Berkeley, or Marin. Double an $80k annual income will get you a 640 square foot home with $250/square foot land and construction costs, so not a particularly high end or spacious place.
Briefly looking at redfin shows that my 500kish house would be 3.5 millionish in Mountain View. Similar in SF but it's a lot harder to find a directly comparable house. That's a 14k monthly difference in the mortgage. Equivalent to 240k annually after taking taxes into account.
Using that number means I'm roughly at par with a FAANG salary given my level. But it's not like the FAANG engineer is setting fire to that 240k. Depending on where you are in your amortization schedule 20-80ish % of your payment goes to principle. And my 500k house is probably going to be worth 800k in 10 years while the bay area house would be 4.5-5 million. When you take that into account I'm probably at 70% of an equivalent FAANG position.
The more important thing to look at here is risk. FAANG salaries and bay area real estate prices are out of whack with the fundamentals. If you get in and out without the bubble bursting you're sitting pretty. If it bursts or even has a 10% correction the FAANG engineer is way behind.
One can rent a perfectly decent home in Cupertino with 3 bedrooms and 3 bathrooms for under $4,500 [1]. Price to rent ratios are very high for most SFH properties, so renting is often the right move. This will allow families to send their kids to public schools ranked among the best private schools in the nation for free, without any charter or magnet lotteries. I don't think rent for any comparable home in, say, Austin is more than $2,000/mo cheaper, or $40,000 before tax. That's a much narrower gap to justify than most of the hyperbole in this thread and especially narrow if both partners are working: job opportunities in the Bay Area are strong for almost all kinds of professions.
My company is shown here; the number for my level seems roughly correct. There have certainly been times when I had to work harder than I would have liked, but it's not crazy.
The way I see it, every job has downsides, and I could certainly leave to go somewhere a bit more relaxed. But the problem I always run into justifying that is, say I go somewhere where the total compensation is 50% of what I get now- am I really going to like that job twice as much? Tech industry is tech industry, at the end of the day. So, probably not.
We do a job to get paid. So, getting paid is nice.
You have to keep in mind that a 1br apartment in a second tier area will run you like $2k, and that will not be an especially nice apartment. That seriously cuts into the "retire in 10 years" plan.
I find it hard to believe that you're reading HN while still being surprised about the cost of living here?
By the time you're 35, you'll probably have a family with kids. You don't want a long commute to spend more time with said family so your 2000 sq.ft. house on a 7000 sq.ft lot will cost between $1.5M to $2.5M.
You won't get any needs-based financial compensation to send your kids to college, yet chances are that you don't want to deny them going to the best college that they'll accepted to. Add another $200K per kid if they're going to a UC school.
Everything is going to be a bit to a lot more expensive than elsewhere. Childcare, the electrician and plumber who charges $175 per hour (they need to live too), eating out etc.
$400K in yearly pre-tax compensation reduces to something like $250K after tax?
There's no way you're going to retire at 35, unless you're willing to give up on a lot of niceties of life before bailing. I don't know anyone who did.
That's a lot size, not a house size brotato. That's 0.16 acres, which is actually below the standard lot size in the US for most houses. Standard lot size in the US is around 0.25 acres.
2000sqft is a larger home, but not absurd if you're married and have two kids.
Nobody needs a luxury car. Nobody needs to eat at nice restaurants. Nobody needs vacations in Europe. Nobody needs a $1000 phone.
But if I had to choose one thing where I have no problem spending more than what is strictly needed, it's going to be the place in which I'll be spending the vast majority of my time for the rest of my life.
If it makes you feel any better: for the low end of my range ($1.5M), you're not going to get that 7000 sq.ft. You'll be buying a house on a 3500 sq.ft. lot, so the argument still stands.
Go on Zillow or Redfin and look at Bay Area housing prices near major tech companies (Cupertino, Mountain View, Palo Alto, San Francisco) and you'll see that 1 million dollars is entry level for a single-family home, and ~700k is entry-level for a condo that has HOA payments ~400-500 per month.
That's the bottom line -- cost of living is so high the salaries need to be high too, or people won't accept them.
You're implying high housing prices cause higher salaries when it is almost certainly the other way around. High salaries and limited supply seem to be the key causal factors in high housing prices.
It's a vicious cycle. People are still coming to the area and they demand high salaries because housing prices are high, and housing prices are high because of the high salaries of people already living in the area.
As others have said, the catch is incredibly high cost of living. The housing market has grown by something like 10%-15% annually, for years.
Obviously, it can't grow like that forever - even professional couples have problems pooling together money for a down-payments on decent median priced homes.
And while you're building equity by owning, you're also kind of stuck to keeping up with salaries / career trajectories.
But you know, with higher salaries comes more purchasing power. And then you also have foreigners parking their assets in the housing market, similar to what's happening in NYC and Vancouver.
It's hard to compete even with a nice $500k salary, when some foreign investor can casually overbid you with millions in cash.
Sounds a bit dramatic, yes, but that's life in most cities with hot markets and high salaries.
I'm a senior engineer at FAANG, work 40hrs/wk, and get paid $400k+/yr.
The cost of living is higher, but it's well under the increase in pay for being in the area. My current living situation is actually pretty cheap; I split a 4BR house, live 7 min from work, and pay $1650/mo for my portion of rent/utilities.
Most people I know tend to get 2BR apartments and split it with someone, usually paying $2000-2500/mo.
You're also stuck renting, with three other people, with a $400k salary. Conversely, I bought an 1800sqft house in upstate New York, alone, and the total per month is roughly $1400(mortgage, property/school tax,utilities).
He’s not “stuck” renting, he’s choosing to rent because he wants to save money and doesn’t mind having roommates. You can absolutely afford your own apartment on far less than 400k/year in the Bay Area.
So? Not everyone is brainwashed by their banal suburban upbringing into thinking that home ownership is the highest state of enlightenment a human can achieve. I can afford to buy a place outright in cash but I still rent because I like the flexibility and have no interest in betting a large fraction of my net worth on the direction of real estate prices.
Dunno, what’s the return on property, less maintenance turnover and annual wealth taxes vs the market? What’s the risk of dumping so much capital into exactly one asset vs a stock portfolio?
Home ownership is the strongest correlating factor with financial independence and overall net worth. Even in the Bay Area, owning a home and the equity in it is generally the most critical asset financially independent people have.
I'm not going to claim renting is universally bad, as it has some upsides (mainly flexibility), but it's definitely financially less savvy than buying, and is generally something you wouldn't want to optimize for at high salary.
You know whats an even stronger correlating factor? Having $400k liquid per year.
Homeownership is advertised as owning an extremely leveraged illiquid asset whose margin calls take years, which is the only reason why it works for people that don't have enough cash to be financially independent another way.
Additionally, I'm slightly concerned about a possible real estate bubble + I'm not sure if I plan to live in South Bay for 5+ years (the usual amount of time needed to keep your house for it to be worth it financially).
It's not that I can't afford a house, I can; I'd just rather have my money in an index fund and rent instead right now.
Yes yes yes oh my god yes. Rent eats most of the difference. 300$/mo for a parking space, etc. However, non-local things (like amazon purchases) are the same price everywhere, so you still have lots of purchasing power for those things.
> Or are they literally giving college grads enough money to retire by 35?
Only if you play it right. If you have a high-earning spouse or are willing to live with multiple roommates into your thirties, have no kids, rent an apartment, and live modestly + save diligently. Want to live alone and get food and drinks with your friends every day? That will seriously handicap any strides towards financial independence until you're nearing the 300k range, and even then it takes you from "rocketship bank account" down to "really great life". Very much a first world problem, but if the goal is "retire at 35", the distinction matters.
> Or are they literally giving college grads enough money to retire by 35?
This is it.
All the answers about Bay Area Cost of Living are just as applicable for people making $150k and would be the same answers if those were the "high salaries" being paraded around.
All thats happened is that the tech sector has multiple of the largest publicly traded companies in the world, all in one place, and its brushing up against the compensation style that the finance sector has had for decades, which has always been divorced from cost of living and closer to the value brought to the organization. Its a good deal with a lot of potential to get better, or the market slows down and it gets worse.
For everyone who doesn’t know, you’re getting shafted at that medium size startup/company. Most of these FAANG engineers are not geniuses, they just studied for the interviews
I know. I get paid lower than an entry level engineer while managing, developing and maintaining the entire web presence for our company - public site, e-commerce store, etc.
I get paid 1/50th of what the company made in e-commerce sales (similar amounts through other channels).
I can’t quit and prepare for a job interview as I need to maintain visa status. And my workload averages ~60h/week.
The visa situation is just terrible, I knew so many smart coworkers who were afraid to move because of H1B uncertainties. Ultimately this hurts everyone in the industry because labor markets require a liquidity to function properly.
What uncertainties exactly? Just interview normally and if you get an offer then you can accept the offer and they will start the H1B process. You will get the H1B approval in about three weeks. Then you can put your two weeks notice. Overall it will take around 5 weeks from your offer date to your joining date which is pretty reasonable. If there is a delay in the H1B or it does not get approved, then you can continue to work at your old place. Pretty much everybody on H1B these days is following this process.
I'm curious: you've chosen to tie this pretty closely to your real world identity. Aren't you concerned at all that a company that you're beholden to and is willing to underpay you will just let you go if they find this?
It sounds like (guessing based on phrasing) ameen is the only, or only senior, technical staff member? Why would they let them go? If I were a cartoon-villain, mustache-twirling higher-up for said company, what this post tells me is that the situation is currently working, that my employee knows the score, and they don't seem liable to do anything about it except complain on the internet. In a really evil way, wouldn't it be reassuring to them?
I should be clear, I sympathize with the situation and hope that ameen's employer is not cartoonishly evil, and instead would maybe even realize they have improvements to make. But just thinking about possible outcomes of someone venting on the internet, firing doesn't seem like one that makes any sense.
If they are such a central team member to an ecommerce operation, likely the company feels equally stuck with them (e.g. how many sales would be lost if the site went down while looking for a replacement, and would the company even survive that?).
Totally, nail on the head. And folks from my company don’t really frequent HN (although I wish I worked for such a company).
I’ve learned a great deal about how not to run a business, treating employees right, delegating tasks/responsibilities, designing for automation, etc. I do hope when I get my green card to start my own startup (lifelong goal of mine) and try to set an example of everything I see wrong with our industry.
You're definitely getting shafted if you're working for a privately held start-up and they don't give you a 10 year exercise window. Many start-ups pay "median" salary or below, which make their numbers look bad versus levels.fyi. But in many cases if a start-up has an exit, then early employees will easily eclipse what they'd earn at FAANG. (Later employees, maybe not ..).
Actually it’s rare for the options to be worth more than FAANG options. Only the earliest stage employees do well, and adjusted for the risk they take, it’s a really bad deal
If I have learned one thing is that's much better to get paid very well for 20 years at a big tech company than it is to be paid median at some smaller outfit hoping to hit the jackpot.
Because even when the start-up has a successful exit, and even if you were an early employee, you'll still have a very small chance of out-earning your buddy who joined big tech.
This has been especially true in the past 10 years: look at the stock prices of Google, Facebook, Apple, etc. They've all gone up significantly, making those yearly RSU additions even more valuable. In a rising market, a 4 year vesting schedule works to the advantage of its owner.
Worst thing is when one of these average fuckers from FAANG decides they want a change and is now your director of engineering at $medium_startup despite knowing fuck all.
No comment on the "shafted" aspect, but the "not geniuses" thing is exactly correct, and I wish I had realized it sooner.
I didn't apply for google when I left college because I didn't feel like I would "meet the bar". ~4 years later, feeling like I was a much stronger candidate, I interviewed, hoping to barely scrape by and be the dumbest guy in the room to keep leveling up.
I was dumbstruck by just how totally normal everyone was. Everyone I met at google struck me as being in the 50-75th percentile of my peers in startup land. They're not some high-powered cohort of elite intellectual supermutants. They're regular people. I was ready at graduation, and sold myself short for no good reason.
Now that I work at a BigCo, I feel even more strongly that the bar is, if anything, on the low side, simply because an org that big needs a constant influx of warm bodies. We hire more people in a month than some of my past employers would hire in the lifetime of the company. It's flat out impossible to staff 5,000 people while demanding that they all be in the top 10%.
There are weird and arguably arbitrary hoops to jump through, but you can do it. Interview prep was radically simpler than EG buying a house (in terms of prep, context gathering, etc.)
If this is for real, _everyone_ I know is getting completely screwed.
I have a hard time believing any of these numbers. If I earned any of these amounts for 2-3 years, I could live off the interest for the rest of my life.
These are not salaries. It’s total comp. My total comp. calculating pension and benefits in the Great White North is similar, and that’s govt. to boot. Total comp is always a highly misleading number.
Many companies hope that engineers don't know their value or that they simply aren't willing to relocate near one of the tech hubs. A trick of startups is to woo you with stock options which almost never amount to any value. You also have to watch out for REMOTE work where many companies seem to place an excessive $ on the "privilege" of working from home.
I'm willing to relocate for better pay so that I can afford nice things.
I want to have a place where I have room for a chicken coop (30 chickens) and a 1-acre fish pond. I'm willing to commute by car for a maximum of 15 minutes. A slightly longer commute might be OK if I can afford to commute by horse and the employer doesn't mind.
You can find this in many places around the Bay Area outside SF. I have 5 acres and keep chickens in Woodside, and it's 15-20 minutes drive to several big tech companies in Palo Alto and Redwood City. Some people keep horses here.
Yeah seriously. Just the land for a regular house lot can easily be over a million dollars in the area, and 1 acre can hold like six of those. So five acres...like thirty million dollars? Unless there's some weird situation I've never heard of.
5 acres in area where minimum lot is 5 acres is much cheaper than in area where minimum is 5k sq ft. In most areas you can’t subdivide lot - that’s the reason houses in Atherton on huge lots are so cheap (relatively).
The land is what you're generally paying for in any real estate deal. It doesn't cost millions to build these houses, but the land is valued as such because it's finite.
Nice, but I don't see how it generally works. The highest levels of pay in the article was $950,000. Wikipedia says that in Woodside "The median household income in the town is $212,917, and the median family income is $246,042."
Double those pay numbers to determine the price of a house that a person can afford... and it is not looking good. I looked around on www.trulia.com a bit. An empty lot of questionable geological status goes for $1,500,000. A small empty lot far from the tech companies goes for $500,000. Most of the actual homes go for millions.
So I guess yeah, it could work for the experienced person earning $950,000 per year at Facebook. That would allow building $500,000 of house on the $1,500,000 empty lot, assuming you can solve the geological issues and get the permits redone.
That is the top pay listed though. It's the top level at the top company.
Why on Earth do you think you need to make 950k/year to afford a million dollar home?
The mortgage on a 2 million dollar loan (which would be a 2.4 or 2.5 million dollar home) is 10k/mo or 120k/year, which is solidly affordable on a 400k income.
I know of 5 and 6 bedroom houses than can be gotten for that much in Palo Alto and Cupertino.
This is assuming you never lose a job or can get a new one to replace current one easily. When market downturns, those equity based salaries will go heavily discounted, and you might not be able to afford mortgage anymore.
People overestimate their max credit payments... And financial system incentivizes that (why wouldn't you borrow from 401k? It's just your retirement savings)
Which are great reasons to be responsible and run a large emergency fund, or be responsible and make 450k combined before buying the house. But not reasons to make 900k.
None of the major tech hubs fit this. Hell, I'm not sure any medium-sized tech hubs fit this. 1 acre is a hell of a lot of land for a real city, and 15 minutes doesn't get you very far by car most of the time at rush hour.
In Berlin (not exactly a techhub so about 100k for a good engineer), they are currently selling a plot of about 2 acres (8500sqm) for 1.5M (plus cost of a good new house ~= 300k). About 30min by public transport to city center. 40min to the new Tesla factory by car...
(Though even if serious, I would not do that as you can get more land further out much cheaper and why do you need a pond directly at your house, having it within 1 hour reach for the weekend should be enough)
I am serious, aside from minor personal details being changed. (different animal, etc.)
The pond is so that the kids can go fishing out in the back yard. They don't need transportation, they can be watched from the house, they can have friends over, and there is no performance pressure to catch fish before it is time to go home. They can float on the pond with a canoe or a makeshift raft.
Having a little creek is fine too. Kids can build damns, dig for crawfish, catch frogs, pan for gold, make waterwheels, and so on.
The kids can camp in the backyard, complete with a campfire. The larger back yards have room for shooting.
These companies are also ludicrously selective. I think to think I'm a pretty good engineer and I have built up a lot of management experience to boot and I can barely get the time of day from any of them. I only ever got to the interview round twice and I felt like I did really well and just never heard back.
Here in Canada entry level SWEs are getting paid 60k-70k CAD (45k-55k USD). It's worse in Europe.
These numbers are absolutely mind boggling. Even with a higher cost of living and California income taxes, you still have at least 100k of free money to invest.
It's no wonder so many people apply for jobs at FAANGs. A job at a FAANG is practically a ticket to early retirement.
At one point I fancied the idea of working abroad for fun, I could learn a language and try something new. The income disparity was far too great compared to the US, so I never did it.
The one exception: Google pays pretty well in Switzerland, but I hear it's hard to land.
Same. We've toyed with the idea of moving permanently if only because healthcare here's so bad and doesn't seem likely to get significantly better any time soon (the most "left" ideas beginning to creep into the Overton window still don't address prices seriously within the next decade). However, as a developer making way under FAANG comp levels, I'd still struggle to make more than like 2/3 what I do here, in Europe. Before taxes.
NY state pays all IT people (with a 4-year degree) $56K to start currently. Of course, you get a pension(!) and good health insurance. Private sector companies often don't pay much higher, and have much worse benefits.
It is worse in Europe, but try getting a FANG job in Europe and they still pay extremely well.
My base pay is 150K pounds and not in London! Definitely I have a very niche skill in demand and I had to work really hard and be luck at the same time, to land at this role, but I will any day pick Europe with all the other benefits that a European country gives me.
I think your niche skillset is probably the main reason, I doubt many FAANG people at an engineer level in the UK (especially outside London) make anywhere close to that.
I've been getting offers on that range in London for a few years now but they're senior management roles and I have a pretty unique skillset, FAANG recruiters haven't even bothered contacting me for like 10 years (they were chasing much harder when I was a junior engineer)
Average senior software engineer salary in Vancouver is apparently $80-130k, median at $100k even.
The manager from a FAANG company that called me up the other day said the engineer position they're hiring for in Vancouver (senior-ish, but nothing exceptional) has a compensation package ranging from $200-270k.
It's not just the location. I think these companies are just really good at extracting value out of engineers and scaling to make good use of engineers, so it's worth it for them to pay well above market to acquire as many people as they can.
And to the rest of your message -- yes. I love the company I'm at right now and am being compensated fairly well for the market, but with a wife and a new baby on the way there's no way I can not follow up on a job with that kind of pay. For us that's the difference between never affording to enter the Vancouver real estate market and being able to buy a house for cash before we're 40.
The housing prices you see SF are unheard of in Europe, outside maybe only London. And even then, we're talking about the most gentrified areas of London.
FWIW, I make a "meager" half of those starting salaries, but I'm able to save around $80k / year. Why? Because I pay next to nothing in housing.
Purchased my home for $15k. Dropped another $15k in renovations, and that's gonna last a good time. I'm on the track to early retirement, and it's completely possible other places too.
I took a huge pay cut moving away from a big and expensive city, but I can save a lot more, and with a ton less work-related stress.
Can you say more about your home? Perhaps rough size and country? 15k is really cheap even if you bought it a while ago.
I assume you’re in Europe somewhere from your comment, but even Bulgaria which is fairly cheap isn’t that cheap. For example, housing outside the center of town in Sofia is about 1000 euros per square meter [1] (for sq ft folks, multiply sq meters by 10 roughly). Varna is a bit cheaper at 700 which is a bit below the countrywide average of 750.
Bulgaria is often listed as the cheapest country in the EU, so I’m curious to understand if there’s a drastic housing price drop somewhere. But even $30k to buy would mean about a 30 sq m (300 sq ft) flat, which is more like microhousing.
Northern Norway, but there's a ton of variance in prices here. You can easily move tens to hundreds of thousands in one city, so to find the cheapest you really need to look hard. I found a relatively old and run-down place, but which was easy to fix.
With that said, I have a very nice salary - relatively speaking - but as mentioned, it's around half of what jr. Engineers make in SW.
I'm lucky because my background from both Business and Engineering has been a good mix for landing my current gov. job - and the pay is good because the area / location is not very attractive, and it makes harder to get talent here. (I grew up here, so that's no problem).
Work involves a lot of travel, and I travel otherwise during my vacations, so things rarely get boring.
I've worked all over the world, but after I turned 30, I really haven't had the big-city needs, so living somewhere rural doesn't bother me anymore.
Software in Norway and saving $80k per year? In government, no less? That means post tax you're making in the ballpark of $150k, or maybe a bit less if your expenses are very low? Very good number for the location regardless.
I'm able to save $20k per year in Norway (south) and consider that great, relatively speaking. Remote work? I didn't think the public sector jobs paid this well.
Not quite software (scripting at most), but in a senior engineering position with leadership role, and with a ton of travel - had almost 100 days last year. OT pays well, too. (So the salary varies a bit from year to year)
But the largest portion of savings boils down extremely low COL - I have a grand total of $800 / 7000 NOK in expenses pr. month, that includes everything. Pre-tax anywhere between $120k-$130k, depends on OT and travel.
State / gov. (directly or owned) jobs can pay pretty well, if you find the right positions - but they tend to lean towards engineering or medicine.
Really nice and thanks for the info. GJ on getting to a ridiculously low COL. My costs are on the ballpark of $1000 per month excluding housing costs, but housing costs easily approach that number as well. Which obviously reduces the potential savings rate dramatically.
i.e. can you draw a line between devs who get paid a lot and those who don't?
I wish there was a date on this article (and all blogs) but it looks like it's from 2015.
The conclusion isn't crisp, but to me it's plausible that the trends have continued since 2015, e.g. maybe it's more bimodal 5 years later (though I haven't really been paying attention). I would be interested in a followup.
If you want to know the lay of the land in terms of compensation in the Bay Area, put your house on the market as a rental. You'll get to see the offer letters from Google, Facebook, Apple etc.
It was enlightening, and made me go to my manager to ask for more.
The number on levels.fyi closely match what I saw in those offer letters.
That's a very clever way to see real paystubs! Landlords get too much info in my opinion, especially commercial landlords. I wish there were something like credit scores for income. You can share your paystubs with that "income score" company which will then just tell the landlord if the rent is less than 25% of your income and hence you can afford it.
It's real. I mod r/cscareerquestions and work at Google. You can search the subreddit for "salary sharing" and find our threads where people are sharing various offers.
I have never worked in the valley, so the answer to this question might be obvious to the people working there. What happens to all the experienced engineers?
According to this, the Senior, Staff, or Principal titles are generally for people with 5+ year experience? Those roles make up 30%, 10%, and 3% of companies respectively. That leaves 57% of engineers in positions listed are usually for people with 0-5 years experience. Does that mean over half of engineers are relatively new to the industry? Are there large numbers of engineers that go their entire career without getting a Senior title? Are there large numbers that end up changing industries? I know some people transition from hands on engineering to management, but there can't possibly be that many management jobs to make up that difference, right?
It's so variable that I don't think there's even a good answer for this. My current company does the engineer -> management track, so there can absolutely be an abundance of management jobs. You can also work as an Junior/SEII/Senior for 5+ years without being promoted at all. Keep in mind all of these titles are arbitrary/subjective.
Most companies in the valley have a terminal level (a level at which you're not expected to progress to the next one) that's close to level 3 in the chart here. In my experience, a lot of people don't progress beyond that. For the ones that do, the number of years of experience plays a smaller role than the quality of the experience itself.
That took me by surprise too. One hypothesis could be that so many companies that levels.fyi tracks have grown so quickly that they've chosen to stuff themselves full of relatively junior SWEs. I think there are lots of reasons people in strategy positions would choose to do this, whether I agree with them or not.
But re-read the description of "Software Engineer (II)" closely:
> Typically 2-5+ years of experience. [...] At many companies, this is considered a 'career-level', as in you
can spend the rest of your career operating at this level without being pushed out for not being promoted.
So, it doesn't suggest it caps out at 5 years, and this could be where people who do "good, but not outstanding" work end up. Also the next level says "Role shifts more towards design rather than implementation depending on size and expectations at company.", so maybe the big break isn't "seniority and how good you are at your job" but rather "can you, and do you want to, work at the next level of design abstraction?"
I started working at FANG recently, after spending 15 years in a different field. The very first thing I noticed was how young the average employee is. It was a little startling. I've heard different theories:
* Today's big tech companies are still relatively young, so the workforce is young.
* The companies have grown exponentially in recent years, and they've hired many new grads to meet hiring targets. This would also shift the average employee age lower.
* The people who joined these companies 15-20 years ago would likely be very well-off financially by now, so they don't need to keep working. They've retired early, created start ups, left the Bay Area, etc.
I think there's likely some truth to these claims. But Silicon Valley also has a reputation for ageism, so who knows.
There was a peak in the mid-80s, and another around 2005.
CS enrollments reached a max around 2000, at the height of the dot-com bubble. But when the bubble burst in 2000-2001, enrollments plummeted in 2002, 2003 and 2004, leading to the local minimum in graduates in 2009.
I'm getting a bit of a dot-com feeling around these compensation figures, especially seeing the sign up bonuses and how tangible stocks are considered as normal compensation now. The FAANGs remind me a bit of Microsoft, Cisco and Intel before their y2k peaks.
I do get some of that feeling. The differences is that the FAANGs are all public, have been for a while, and have real revenue. The dot-com bubble was mostly fueled by VC, IPOs, and a virtuous cycle (though I guess Microsoft, Cisco, and Intel had been public for a while, and they did survive the bubble burst).
Facebook and Google do ads, and most online advertisers look for immediate, real value. These success stories are as real as e-commerce.
That brings us to Amazon. It's e-commerce is real, but margins are low. AWS looks more like the dot-com bubble in that some of that money is coming from VCs. If funding dries up, AWS gets hit. That said, there's a larger migration to the cloud, and that's also real.
Apple makes high-margin phones that people all over the world buy. Full stop.
Netflix is the least like the others. It's smaller, and while it revolutionized how we consume content, it's current model is heavily funded by debt, and it's facing stiff competition. No one's talking about how Netflix will take over long-form video, they're griping at having to pay for six streaming services.
The alternate story for tech salaries is that PCs and the internet weren't ready for prime time in 2000. After the bubble burst, there were too few CS grads for when the internet was finally ready. The internet wasn't ready until 2006-2010 when most people had broadband at home, smartphones matures, and LTE was ready.
I'm surprised it started growing even that early. When I attended school (2007-11), we thought CS jobs would be outsourced to India/China/etc. (we were wrong).
I started a few years before you and remember people saying I was crazy to go into development since the jobs were all being outsourced. They might have been wrong in the long run, but I did spend the first few years of my career managing offshore development more than doing actual development.
>The very first thing I noticed was how young the average employee is. It was a little startling. I've heard different theories
These salaries come with a big gamble on SV real estate and the market performance of these companies. The first one is a big difference between young and middle aged people. In my 20s I averaged a new home every year as my financial situation changed and I wanted to live in different parts of a city. Now in my 30s with a wife and kid I don't expect to move for 10+ years. The only way to achieve that is buying a house. Which, in SV, means plunking down 3-4 million. That's doable given the salaries, but it's a huge bet that the real estate bubble won't burst.
Same thing with the market performance. Sure, the FAANGs + MS (and minus Netflix) make a ridiculous amount of money and that likely won't change. But what about companies like Snap, Pinterest, Lyft, et.al. that lose money? There's a huge risk that these companies (1) go bankrupt or (2) decide to focus on profitability and slash their engineering workforce.
If you're a 20 something renter you ride the gravy train as long as it keeps coming. If you're a 30 something with small kids and a mortgage you want stability.
Now in my 30s with a wife and kid I don't expect to move for 10+ years. The only way to achieve that is buying a house. Which, in SV, means plunking down 3-4 million.
I think you're pretty deep in the bubble or you have really extreme tastes. I have tons of friends in their 30s with kids in SV and NYC. Almost all of them are renters. The actual financial calculation for renting vs. buying in these markets is brutal. You need to stay for 10-20 years for buying to start to make sense.
Also, you don't need $3-4mm in either of these markets to buy a place suitable for two adults and a child. There are plenty of 2 bedrooms for a third of that.
Many go to management. You realize as you get older that the whole “you can progress up the salary chart as an IC just as well as management” is a total crock.
If you want to afford a nice house in a good neighborhood with good schools in the Bay Area, you’ve got to go into management.
I kinda disagree, Oracle/HP (personal experience) and Google/IBM (extremely good friends) both have career tracks for IC which go up to ‘Distinguished Engineer’ level, and where compensation can be equivalent to a VP on the management track.
What you might be trying to say is there are more available positions at VP than DE, so your chances of making it are better? Or that being promoted to VP is easier than to DE? I think having seen how the sausage is made, would agree with both of those.
Yes, that's exactly what he's saying -- the "just as well" part is key. Sure, there's an IC track that goes up to the SVP level at many companies, but it's statistically much harder to climb pretty much everywhere.
I think most companies do not even have IC roles analogous to SVP. Google has two Senior fellows, and those are two guys who are far too famous and responsible for too much of the Google backbone infrastructure.
> both have career tracks for IC which go up to ‘Distinguished Engineer’ level, and where compensation can be equivalent to a VP on the management track.
Sure, it exists. How many DEs do you know of, vs. VPs?
How do you get a DE job? Usually you are the most well known person in your field.
How you do you get a VP job? You have to be a pretty good manager.
At Google, there are 100s of VPs. There are maybe 10 DEs, if that many.
That's the BS. It's like saying "there is totally a path to getting really rich as an actor!". Sure, there is a path, but not a lot of people make it. And even the ones that do usually get there by also doing the management path (producer) at the same time.
The lie is in the claim it's just as easy to climb the DE ladder as it is the VP ladder.
> At Google, there are 100s of VPs. There are maybe 10 DEs, if that many
Fwiw, the number is significantly higher than 10, though still fewer than there are VPs.
That said, things get tricky: there are DEs who have reports, and there are VPs with no (or trivial, like 3) reports. But either way, if your metric is DE/VP or if it's manager of a large org vs IC/TLM, the number of IC-track people is higher than you suggest.
There are a lot more people working in software now than there were 20 years ago. Even if everyone over 40 who started in the industry was still there, they would be totally outnumbered by young people.
Ageism is real, but so is the growth of the engineering profession, and so is early retirement (which is definitely possible at the salaries senior people make, especially if you consider they bought houses in Silicon Valley for a lot less than they sell for now).
> Does that mean over half of engineers are relatively new to the industry?
Jackpot!
All it takes for this to happen is that the number of software engineers in the world grows by 10--20% every year. (Because this means it doubles every 5 years, which means half the workforce has less than or equal to five years of experience.
I recall reading somewhere that the actual growth of the workforce is even greater than that -- somewhere around 25%!
It’s not “manage” but “lead”. Which basically means the technical aspects. Certainly I’ve seen lots of great leadership from people with 2-5 years experience.
What I've personally seen is that the smaller the company the more experienced people you'll have, because they need more independent people and have less time/resources to mentor juniors.
So the proportion for a large majority of startups is not similar to what this document shows, which is centered to bigger (1000+ engineers) companies.
Often times experienced engineers eventually move to much smaller companies that aren't as likely to appear on levels.fyi
They might get tired of the politics at their company, or they just want to try something new, or founding/joining a smaller company might be the easiest way for them to continue to get promoted
I get Airbnb and Stripe being up there for entry-level engineers, those companies are almost printing money.
But Lyft, haemorrhaging money, is top of the list, and Oracle - the company no-one in the Bay Area or on HN seems to work for, and everyone seems to hate - is 5th? Are there legions of quietly-well-paid Oracle engineers out there just keeping their heads down and getting on with the job? Why isn't Oracle in the more senior lists - they make complex and expensive databases, isn't that something you need to pay a lot of money to get really smart people to work on?
And Netflix, which I thought famously paid very well, only pops up in one tier?
It's more likely I'm misinformed than this list is wrong, but I find this pretty surprising.
I know a number of people at Oracle, senior engineers mostly. They are not the online forum aficionados. They do their work, get paid go home to their family, plan vacations just like most other folks out of the tech industry. Very industrious and well deservedly compensated, if I do say so myself. Not just Oracle folks either, there are plenty of companies that are not buzzing or on everybody's lips but treat their employees ridiculously well. Look at SAS for example. Some of the happiest and most well compensated people I know.
Thanks, this makes sense to me. It’s a good reminder of the boundaries of my personal bubble. I’ve always figured there must be a bunch of Oracle engineers out there (there just has to be) and wondered why I’d never met one in the Bay. 99% chance this says more about me and my network / social circle than anything else. I’m happy that Oracle engineers are getting paid well and (hopefully!) getting on with enjoying their lives :)
I went to NC State, which SAS recruits heavily from (for obvious reasons).
The people that work at SAS are not the top tier, at all. They have a surprisingly large number of test engineers too. From what I gather the 35 hour a week thing is a myth, and benefits are mediocre compared to top tech companies.
Yeah, the public perception (mostly created by the company) of SAS is very different from reality. The work is mostly boring, the pay is just ok and the lifestyle balance - while better than the Bay Area - is definitely not 35 hours a week on average. Historically the COL in the RDU area has been a major selling point but even that is changing as property prices continue to rise across the Triangle.
At some point Oracle Cloud (OCI) started poaching engineers from Amazon by paying ungodly money, so much so that there was a running meme on Blind about this.
I'm not sure about the salaries, but I'm more sure Amazon isn't in Seattle, CA. (Staff engineer slide).
I'm also wondering how much of the salary (which certainly contains a lot of stock) is due to stock appreciation. If someone joined Amazon in late 2016, the value of their stock awards has more than tripled.
Do offers for these companies go this high, or is this only after a few years? This seems it's more "what I'm getting paid now" rather than what the offer was.
Assuming this is the levels.fyi dataset, it is “what I’m getting paid now” rather than offers. Levels.fyi doesn’t seem to filter based on offer vs ongoing salary, and the submission form doesn’t include flagged offer vs ongoing.
Yeah good point! we’ve actually been thinking about how to support it - potentially collect the number of shares / RSUs so that offers can be more dynamic
Salary negotiation is pretty one sided today with companies holding all the cards. Better visibility into numbers will definitely help level the playing field.
Collecting offer letters is an interesting way to build trust in data. What's the incentive for someone to upload their offer letter though?
It's not all the cards but companies (recruiters) usually have information asymmetry on their candidates. Sites like levels.fyi are a good remedy, with the right info and counteroffers you can negotiate salaries/sign-on bonuses up by pretty large amounts.
I tried this in West Norway recently, being as firm in the negotiation tactics as possible. Didn't yield higher offers at all! So that tells me the market here is actually not nearly as competitive as all the consulting companies try to make people believe.
In other words, the success of this strategy is market-dependent, but it certainly seems to have a huge effect in SV.
For the employer that means hiring the next best candidate, or not hiring anyone for that position. For you it means taking the next best offer, or staying at your old place etc.
The concept is closely linked to opportunity costs.
In general, you can negotiate an agreement only between your BATNA and their BATNA.
(Part of interviewing in batches is that you can credibly present that your BATNA is very high. So you can be tough in negotiations.)
Yep, I'm aware of this and use it. I guess in these terms, my claim is that the BATNA of most companies here is actually that they have all the engineers they need at low cost. But are presenting publicly that they have a shortage and more people should become engineers, so that they can get them even cheaper.
It might be competitive in the other direction: too many engineers, not enough opportunities. Then it becomes a bidding war to see who will accept the least pay.
Just a few years ago many large silicon valley employers (including some companies on the above list) were part of an illegal anti-poaching agreement and were sued and settled with the DOJ for it. Just because engineers get paid a lot doesn't mean their employers aren't scummy.
Might be the team or sub-org you were in. This data is also for fresh offers in 2019; most FAANG engineers who started prior to 2019 are earning less to much less than listed.
This is false. I'm friends with many people across many companies, and we all openly share salary information, including RSUs. The numbers are fairly close, there's no way it's off by half. The biggest difference is Netflix, I would have expected them to be higher. Their biggest difference is they pay cash, and the culture is either you fit in and are extremely happy, or you're terrified of getting fired and you are within less than 6 months.
This is the biggest difference between now and 15-20 years ago. Before it used to be a secret but now everyone shares the data.
Manager since when? Maybe 6+ years ago it could've been half.
I'm L5 and I earn 400k+ (I joined last year), the compensation on levels.fyi also lines up accurately to my company's compensation data group (in which individuals anonymously report their salary).
These compensations are also accurate to those reported on Blind (anonymous work discussion app) by hundreds of individuals.
I have many co-workers and friends, and know the soft max paybands of each level. The comp reported on levels.fyi is very accurate.
Most of these numbers are including RSUs, which are treated like regular income. It is usually wise to sell at vest, in which case you can then buy food or pay rent.
If RSUs vest every quarter and the companies are public and fairly stable (like almost all of them in the list) then there isn't a very big difference.
It’s worth nothing that most of these numbers are inflated from share price increases boosting the value of RSUs vesting over 4 years. New offers at the higher levels from those companies are unlikely to be that high unless you are coming in at the top of the pay band for the level.
Lists like these are incredibly misleading, as they include non-cash bonuses. First off, these bonuses (say, RSUs) take a while to vest (incurring opportunity cost), can go down (there's risk), and so on. For example, being an early junior engineer at the next unicorn can make you orders of magnitude richer than working for FB or GOOG as a distinguished engineer (basically top 0.0001%). But that's kind of a silly data point, because you're probably making a 70k salary, whereas the distinguished engineer is making like a 250k salary.
So let's stick with cold hard cash or let's stick with bonuses, but it's misleading to conflate them.
At Facebook, Google, and Snap, at least, the RSUs start vesting immediately (no cliff) and are as good as cash as the stock is liquid. It's not very clear what your distinction is.
Even if liquid, these salaries probably reflect people vesting stock from years ago - and the high end would include people vesting stock offered at a much lower valuation. In this kind of ranking there’d be a bias towards companies with rapidly growing share prices ... and remember that last performance is no indicator of future returns.
I'm an L5 that joined a FAANG last year, and earn 440k/yr. If I counted stock inflation, it would be 500k/yr. Most people don't count stock inflation into their total compensation.
When I compare the numbers for my level, I see a salary that is more or less in line with mine, and I see RSU compensation that is in line with the number of RSUs that I received in 2019.
In other words: it does not take into account stock appreciation.
I don't know whether or not that's generally true, but from where I sit, the numbers seem sound and are not inflated due to a rising stock market.
It's true, but for most people they consider the yearly (or monthly) bonus and liquid RSU vests as equivalent to salary, so it's mostly apples to apples. RSU can go up or down, but you take the value at current market price as part of the offer.
I know some companies like Facebook have crazy signing and relo bonuses ($50-100k+), however the base may be much less (Taxes are also different as I recall)
Also a couple of the companies listed (Airbnb and stripe) have yet to go public so those RSUs are not exactly liquid cash like with goog/FB stock
Most companies and employees do not see 4-year stock awards (whether options or RSUs) as "bonuses" but rather part of regular compensation. There are some cases where engineers get additional awards, or some stock-based compensation is tied to objectives by contract, but levels.fyi has a "bonus" field for that data.
I agree that levels.fyi is doing a poor job of comparing the value of RSUs. For example, Microsoft / LinkedIn stock grew 55% in 2019 and pays a dividend. If MSFT did that again this year, it might eclipse Aramco. It would be more useful if levels.fyi simply recorded the raw grant details (e.g. RSUs uniform 4yr vesting N shares) and used stock price data to facilitate comparison. That's especially key when looking back upon offers 3-4 years back to asses salary growth (and potentially find oddities like no-poaches).
Risky or not, you'd be exceedingly dumb to not take RSUs into consideration when accepting a job offer somewhere. Chances are that they'll be a major part of your total compensation come tax filing time.
The data points are incredibly non-misleading. Most of the companies reported are public, and the compensation is already cold hard cash or publicly tradable RSUs (usually without even a 1-year cliff).
Not that hard depending on your natural cognitive ability. Just grind leetcode questions. For higher level interviews, also study up on systems design questions.
I think that's underselling things. These companies have very low admit rates, and leetcode is pretty tedious. That said though, divide the compensation difference by 200 hours of studying and it probably works out to a worthy investment.
One reason they have very low admit rates because most candidates are absolutely awful and cannot code at all, even if they have years of software development experience! Grinding leetcode is definitely worth it.
> You could retire at 35 and not have to work for the rest of your life.
Why does everyone on this site want to “retire by 35”? I don’t know anyone who retired (or plans to retire) at 35. Besides, hand-waving about “basic financial literacy” aside, doing so would require living like a broke college student from age 22 to 35, and then moving to an RV in Nebraska to live out the rest of your natural life in “retirement”. What the fuck is the point?
I don't want to retire at 35, but I would like to be able to if I burn out, can't find a job, or whatever. Not having to work ever again (but choosing to continue to work) eliminates a lot of sources of stress for me.
It's not about wanting to, it's about having the option. Then you can do whatever you want. There's no downsides, and it gives you much more leverage in negotiations even if you continue working exactly as before.
Before you go gaga over this figure, here's a reality check. Oracle only paid such high wages in their OCI division which had a blank check. After their brutal fight with AMZN over the cloud wars and the subsequent reality check, they've had a ton of layoffs (surprise, surprise). So I would take this comp with a pinch of salt.
What I'm taking away from this is that many (most) companies are grossly underpaying their engineers. I've been through the SF/NYC Senior SWE interviewing gauntlet twice in the past three years, and received 10+ offers at half this rate. Levels claims to be checking offer letters, which is great IMO. It's really hard for people to know they're being undervalued when the employers are low-balling and the self-reporters are lying.
I think it's less that self reporters are lying and more that there's a selection bias among self reporters. Engineers with average salaries probably don't bother to report.
Levels.fyi seems to be pretty accurate in my experience, though there may be selection bias as there are more offers at the top of band than bottom submitted.
> many (most) companies are grossly underpaying their engineers.
No, that's simply unfair to the companies who don't have billions of dollars in free cash flow or effectively infinite amounts of VC money.
The top firms have gotten themselves into an insane bidding war which has a side effect of creating an oligopoly on talent, as it's simply unrealistic to impossible for many firms to compete. Not to mention they apparently pay many people these sort of salaries to do basically nothing [1]: they've decided it's better to simply retain talent than risk them going to a competitor, regardless if they provide any value or not.
That all said, as an employee in whole debacle, you should simply focus your interviews on firms willing to pay these levels and maximize your income while you can.
Under/overpaying has nothing to do with how much any particular firm has and everything to do with what other companies are willing to pay. If there's a bidding war, then whatever that produces is the fair market rate.
Yes, it's the market rate but no, that doesn't mean it's necessarily a good buy; it's set by the most optimistic buyer. Buyer's remorse is sometimes a thing in auctions too.
That's the reason we have labor unions -- to stop those that otherwise would work for low wages and/or in deplorable conditions, from doing so. Thus undercutting those that "hold out" for fair wages and conditions.
Think about it. If the entire graduating BSCS class of 2020 banded together and declared they would not work for less than $400k/yr starting, FAANG would simply have to pay that (they have the cash). It's because there's one dipshit willing to work for $250k TC that all the rest have to take that salary as well.
>> Not to mention they apparently pay many people these sort of salaries to do basically nothing [1]: they've decided it's better to simply retain talent than risk them going to a competitor, regardless if they provide any value or not.
I don't think Google is purposely ok with some of their employees doing basically nothing. I've heard the theory that companies pay for some top talent who don't generate value just to prevent them from going to competitors, but is there any hard evidence for it?
> The top firms have gotten themselves into an insane bidding war.
That may be true, but there's more to it than that. The first wave of successful IPOs (Facebook, Amazon, Google, Twitter, etc.) caused a spike in housing prices as employees purchased houses. On top of that, companies have added tens of thousands of new jobs, without proportional growth in the housing supply. So housing prices are now absurd, and these companies need to pay more so their employees can buy smallish houses on the peninsula at $1.5-$2.5M a piece and have a middle-class quality of life.
Just look at Vancouver as a far more extreme example of how local property prices can be out of whack with wages.
House prices are a function of wages (or, more accurately, have a floor set by wages if land is constrained) not the other way around.
Also, the level of entitlement by a lot of such engineers I find to be borderline disgusting. Why do you think you're entitled to a $1.5m house at all let alone 3 years out of college? If you really want cheaper housing (as a function of income) just move to a lower income area. It's actually pretty simple.
But the most objectionable part for me is not just how much of a non-problem this is but it completely ignores people with real problems, like, oh I don't know, the people who drive the shiny white buses who need to live 2+ hours away. Or those not in tech who have to do the same.
Engineers are compensated well now because of the value they create for their employer, nothing more, nothing less.
> House prices are a function of wages (or, more accurately, have a floor set by wages if land is constrained) not the other way around.
I guess if you state it as a fact, that makes it true?
But if that’s the case, why would the company pay an engineer more when she moves from the Austin office to the NYC office? She has become more valuable to the company overnight? And the most valuable engineers just happen to live in the most expensive cities?
Sorry, but salaries are impacted by cost of living. Because if they’re paying top talent too low relative to cost of living, those engineers will just move elsewhere, as you suggest.
Yes, this puts a tremendous amount of pressure on the housing market, affecting everyone in the Bay Area. I’m not claiming this is good.
Vancouver is a different situation entirely.
> Why do you think you're entitled to a $1.5m house at all let alone 3 years out of college?
This is not at all what I said. And most people I know here cannot afford a house 10+ years out of college, unless they’ve worked at a top-paying company all those years.
Who is claiming they’re entitled to it? I’m saying companies are offering it to retain employees, because it’s in the companies’ best interest.
> it completely ignores people with real problems, like, oh I don't know, the people who drive the shiny white buses who need to live 2+ hours away.
And there are plenty of people less fortunate than the bus drivers. By your logic, if they don’t like it, they can just move somewhere cheaper. Maybe it’s just too late in the evening, but I’m not really seeing your point here.
No, COL definately is a large reason. Even the same engineers at Google will get paid different amounts based on where they are located. I believe the Bay area is x1.5 more than other cities, for google.
Yes, labor market competition is the primary factor. But is there a place in Australia where engineers can work for higher salaries and the same or a lower cost of living?
In the US, the discrepancy between Bay Area and non-Bay Area salaries is not as great as they seem at first glance, once the real cost of living is factored in.
> No, that's simply unfair to the companies who don't have billions of dollars in free cash flow or effectively infinite amounts of VC money.
I mean.... so what? Why should I, as an engineer, care if some companies are suffering under the "unfairness" of high salaries?
> which has a side effect of creating an oligopoly on talent
It doesn't really make sense to use the work oligopoly, which has certain negative connotations, for a situation where companies are merely choosing to outbid others.
I would only use the term oligopoly, if there is some sort of unfair barrier to entry, such as because of some government law that is hindering competition.
> I mean.... so what? Why should I, as an engineer, care
You shouldn't, you should always maximize your income. That wasn't my point. My point was the guy shouldn't interview at a 5-person bootstrapped startup and act bewildered when they cannot offer Facebook level comp packages.
> oligopoly
It's absolutely an oligopoly. There are a small number of firms who possess the capital to compete on salary and that creates a extremely high barrier to entry. It's not a bad thing, it's just the reality of the situation. There's plenty of options though, e.g. don't decide your HQ must be in San Francisco.
Maybe that's true of Walmart and GM, but your random A/B round startup? I don't think it is unfair at all. They could offer legitimate equity of they choose not to. Sure, it would be still be a gamble but at least it would be French roulette and not the West Virginia lottery.
Some of the numbers are skewed by the unicorn startups: since employees at Airbnb and Stripe (and Lyft and Pinterest, at the time these numbers were reported) can't sell their equity, and since the equity may drop considerably after IPO, these companies compensate by offering more of it.
LinkedIn is widely known for paying extremely well (to the chagrin of people at parent company Microsoft). Same with Netflix.
I think it's more that software development's divided between the maybe—maybe—5% who are looking at comp at these levels, and everyone else who's in the $70K-180K range, with a cap somewhere in lower-leadership positions that perhaps reaches $200K, maybe mid $200Ks at best as you start to move into management proper. Anything past that you've gotta really nail some niche that someone with lots of money (probably finance) needs and likely become a consultant of some kind, or move into the smallish (relative to all US software development) set of positions that compensate like the ones at the link.
Relative to all software development, I mean. There are tons and tons of places employing anywhere from hundreds to tens of thousands of developers each, in the US, not paying anything like this. And almost no smaller shops are, of course. All the positions at all the companies like this, even though most of them are large, I'd still be surprised if it's more than a single-digit percentage of all software positions in the US.
This is top 5. Look at the difference betwen position 1 and 5 (30% (sic!) for entry level). Ask yourself how many companies are in the SV area?
Then think where MEDIAN of those numbers is.
Looking at top 5 is like looking at best performing stocks in last year (from 5000 of ohers), and thinking "YEAH, thats what I should expect from my future investment portfolio".
Your portfolio should only contain FANG companies. Every single one has outperformed the market by at least 2X and up to 6 X over the last 5 years.
The contrarian position now is to double down on a small number of stocks where the business model function as a data aggregator hence FANG. As opposed to index tracking style portfolio investing, even your Uber driver has ETF's.
> Your portfolio should only contain FANG companies. Every single one has outperformed the market by at least 2X and up to 6 X over the last 5 years.
Based on this, your portfolio should have only contained FAANG companies for the last 5 years.
The argument for "Your portfolio should only contain FANG companies" would be "Every single one will outperform the market by at least 2X and up to 6 X over the next 5 years".
Buying FAANG in 2020 is buying assets whose price has just gone up a lot - the very opposite of contrarian.
I've been in this industry in NYC for about 20 years of progressive levels of responsibility where I'm now directing multiple project teams and doing company strategy and am somehow earning as much as a college grad in SF.
Honestly, it all depends on the type of company. There are only about 20-30 tech companies who consistently pay this much, and at your level of seniority, half or more of your comp is going to be equity. If you're working for startups, agencies, Fortune 500 companies, etc, you're just not going to be making anywhere close to what the big tech companies pay.
Why don't you do a round of interviews for roles at the big tech companies in NYC? You could probably double your comp pretty easily.
Oh, I have. Thought I did pretty well in some of them, but never got anywhere. Not really sure what kind of role I would actually do since I haven't really been a coder for so long.
I don't have much to say except Zuhayeer your site's numbers are dead on from what I can tell of both my and my spouse's employers. Glassdoor et al. tend to low-ball by quite a bit, possibly due to stale information.
There is absolutely no way IC2 makes $175k at Oracle. LOL. I doubt you can even find an IC2, period. They hire everyone in at IC3 and above, and everyones paid like shit.
The only exception I can think of was the people brought in to work on the 'next gen' cloud stuff who were poached from Amazon. They were all 'senior' and 'principal' engineers though.
A friend of mine was just hired as an IC2 at Oracle at 175k. He is on cloud stuff in Seattle, but by no means a senior or principal engineer -- only 1 year of experience.
Yes, as I stated in the last part, Seattle is the exception because the cloud has become make or break. Oracle has 135k employees and the vast bulk are not in Washington. HTH
It makes me feel bad how many people see these figures and immediately start trying to find ways to rationalize why they must be overstated. Aside from some of these companies not being public (so those RSUs are not very liquid) or backloading vesting, they’re pretty accurate IME.
The main thing I would point out is that the years of experience guideline is a bit optimistic. Many engineers get downleveled moving into top paying companies (so someone with 9 years of experience might be level 2) and usually either level 2 or level 3 is a terminal level, meaning it’s both ok to stay at that level for a long time and that promotions get harder.
Also, while these figures don’t (or shouldn’t) include signing bonus/relo, nor health insurance, free food, and other benefits, it should be noted that most of these are in the Bay Area or similarly expensive areas. So a lot of your money goes to housing (with housing close to work large enough for a family being super expensive), and state taxes are a bit steep.
>It makes me feel bad how many people see these figures and immediately start trying to find ways to rationalize why they must be overstated.
Some of the numbers can be hard to comprehend... for example, tech salaries weren't great until about the last decade. And, it used to be that the eye-popping numbers were not for everybody, and certainly not for entry-level / new-grads. Heck, just the amount of transparency in compensation available now was completely foreign when I started my career. Likewise, what's interesting is that in our always connected digital world, location still matters. Thus, for someone not working at a FAANG and not in specific geographic locations, these numbers are other-worldly.
> for someone not working at a FAANG and not in specific geographic locations, these numbers are other-worldly.
Yes. other-worldly is a good word for it. It's not so much that people don't believe these numbers, I think. It's more of a sense of disappointment and feeling left out.
So many experienced professionals work their whole adult lives and end up maxing out at only a 1/10th of the compensation of a "principal" at a FAANG in Silicon Valley.
And the last few years I've taken to blowing off recruiters from SV (including FAANG companies). I'm earning very good money for a software engineer where I live, but... dang, "other-worldly" is a good term for the money you people make.
OTOH, being forced to live in California is a huge downside to any FAANG job (for me, anyway).
Yes - but try Des Moines or Missoula or Boise or even Portland, OR (a growing tech hub) and these salary levels are hard to hit. And, outside of the FAANGs the salaries are a step down just about everywhere.
some of it could be jealousy and envy since most SWE won't get to ever work at a FAANG. FAANGs higher the best, and if you've failed at getting highered by a FANG then you probably won't like seeing all these great figures.
Another point of reference: here are some offers recently aggregated on Blind. In 2019, I got an offer almost identical to one of those listed below, and a friend got an offer a little higher than listed below. So I believe the reports are legit.
While the raw salary data on levels.fyi is useful, other context about the candidate & team is pretty important. For example, my friend has no college degree but matched to a very profitable / well-funded team, so he got a relatively larger stock award. levels.fyi probably has a pretty good estimate of how each company assigns base salary bands to the now "standard" four levels (junior, senior, staff, decorated).
It seems sign-on bonuses grew a lot in 2019. Several posts for Facebook new grads getting $100k sign-on bonus.
LinkedIn
Senior
* 185 base, 10% bonus, 300k - 400k for 4 years stock, 60k sign on
* Total Comp: 294 - 319 / yr
Staff:
* 210 base, 15% bonus, 600k for 4 years stock, 75k sign on
* Total Comp: 411 / yr
Senior Staff:
* 230 base, 20% bonus, 1M for 4 years stock, 100k sign on
* Total Comp: 551 / yr
Facebook
Senior:
* 210 base, 15% bonus, 700k for 4 years stock, 80k sign on
* Total Comp: 437 / yr
Staff
* 225 base, 20% bonus, 1.1M for 4 years stocks, 100k sign on
* Total Comp: 570 / yr
Google
Senior
* 195 base, 15% bonus, 750k for 4 years stock, 100k sign on
* Total Comp: 438 / yr
Staff
* 220 base, 20% bonus, 1M for 4 years stock, 120k sign on
No idea for Austin, but I used levels.fyi to give me an idea of what to expect and negociate, and it helped a lot (and was on point with what I got offered). I think you can filter per city, so there might be some data for Austin.
For my offer, I had 10 years of experience and they slotted me as Senior. Generally I've seen people with as few as 2 years of experience slot as Senior. I think it has less to do with the years of experience you actually have and more to do with your panel.
It's even worse because many of these companies have offices in Europe and pay European market rates. Same company, same level, big differences in compensation. And it's not just Europe too, same in Canada, Singapore, Israel, etc.
I don't really understand why people would feel they are shafted. The reason people get paid that much is because of supply and demand, but it has little to do with what you deserve to get. Does a software engineer really need 5-10x salary compared to their peers in other industries?
Given that the salaries are so driven by market demand, it makes total sense that there's large differences in other markets. It doesn't mean you're getting shafted. Low minimum wages is what we should be getting angry about.
I might be wrong here, but I think the biggest reason for this is that Europe hasn't really produced a tech company in the past ~25 years, with revenues (and profits) amounting to anything close to those of the FAANGs.
OTOH, there is the separate issue of FAANGs not compensating their European workers as well as they do the ones working in the US.
Sure, but that's small consolation if you're not able to capture the value. That said, as a Finn, I'm quite happy about Linus Torvalds.
Still, almost all industries will be tech-enabled in the future (software eating the world etc.), so one would expect European banks for example to up their game when it comes to tech salaries. Alas, it seems that they're are also quite poorly run [1], so I wouldn't hold my breath.
Also, apart from Spotify, European tech workers haven't been able to enjoy the benefits of the streaming wars. And even Spotify is hamstrung by relatively low margins due to high licensing costs [2].
I guess the one industry that might have already increased their rates for SWEs is the car industry and specifically, the relatively profitable German car brands. But it seems they're more focused now on producing electric cars rather than creating online services [3].
As a European tech worker, if you're not willing or able to move to the US, two good options can be to get involved with local startups or to go into independent consulting. Maybe a little ironically, the opportunity costs of starting or working for a startup in Europe might be lower than in the US, due to the smaller pay gap.
> OTOH, there is the separate issue of FAANGs not compensating their European workers as well as they do the ones working in the US.
They don't, but they do compensate them similarly relative to the local average pay. They pay what they need to to get the talent they want.
I work at Google Munich, the pay here is much higher than a regular company in Munich, similarly to how Google pays much more than a regular company in the US. In some ways the difference is even more striking here, because there are few peer companies here that pay similarly to Google (there's a Lyft office, and a small number of Amazon devs, that's about it AFAIK), whereas in major tech hubs in the US you usually also have Facebook and Apple and Amazon and Microsoft and Netflix and various others that are similar or close.
Sure this makes sense, and I've heard rumblings that the average pay in the Berlin startup scene has been climbing these past few years. But I guess we're still far away from someone with five years of experience making 400-500k per year.
It very much depends on industry. It's typical that industries with a lot of money also pays higher salaries. When I first started out as an Engineer in oil and gas, salaries had peaked. Senior Engineers were getting paid $300k-$400k.
The brain drain was real. Why would any engineer bother with other sectors, when you could get paid 50%-100% more in O&G, compared to other sectors? Startups, almost no mater how well-funded (by European standards), couldn't compete.
But, surprise surprise, the good days came to an end - massive layoffs, and people suddenly found themselves in those other "lesser" industries, with massive pay cuts.
The good news is that I've seen an explosion in entrepreneurship and tech the past 5-10 years, and people are more willing to try those routes, as well as that the VC community seems to grow stronger.
Nah, I got an offer letter from Amazon in Berlin, and it was easily 1/10th the compensation they offered to people in NYC or SF (compared with Levels). I made sure with the recruiter that I understood the position and the internal salary ranking--then I told them I would not be taking the position as I found their offer insulting.
It's not a "bit less". A senior engineer in sunnyvale is making 400k+ a year. That's nearly 70% more pay. Assuming 250k is correct, which I'm doubtful of.
Exactly. We talk about income inequality being bad, but obviously if you're on the higher side of the average, it has a direct financial benefit (though other aspects, like a higher crime rate, are still bad for you).
Just to be clear, most engineers in the US aren't getting close to this either. This is only for top companies. Even good engineers at "normal" companies in the US are getting less than half this much.
I still don't understand how they're defining total compensation. Federal taxable wages, like what shows up on your W-2? Or the amount you're promised including RSUs, regardless of vesting schedule?
It's not an unreasonable way to calculate it, and given the way the economy has been going in the past 10 years, it's lowballing the real taxable compensation.
The article is a so great and shocking at the same time.
I understand the rant and a sense of discomfort us engineers are facing looking at the dataset. I would definitely want to get more context out of these numbers like -
> Why these engineers are paid so much and why others are not?
> Is education/college a factor in this pay gap?
> If one wants to earn this much. What are the required skills to achieve this goal?
It is a very good sign that a level of awareness is being developed about the pay gap not in among different genders but also within the same organization/experience levels.
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[ 2.8 ms ] story [ 316 ms ] threadSo, yes. For now, these companies are giving college grads enough money to retire by 35 (assuming the college grads are halfway financially savvy).
Source: I am a recent college grad at a FAANG.
Idea being that average market returns are 7%. So if you use 5% per year, you will never run out.
You get paid well into six figures but have "to camp in an RV for a decade", and then you retire with a $40K income. You could have just gotten a $40K job at some place* that didn't kill your soul! In ten years, you'd be making at least $60K. And if you burned out for whatever reason anyway, you could go on disability.
*by place, I mean either employer or city.
If you are invested in low cost index funds, most assume you can safely withdraw 4% a year and not deplete your principal. If you're retiring at 35, you might want a greater safety margin, so let's say 3%. That gives you 60K a year.
How do you retire on 60K a year? Obviously take what I'm saying with a grain of salt as I'm a relatively young person and haven't done any of this yet. But...60K is the median household income in the US, so half of families in the US live on less. If you're retired, you can probably save in ways others can't. For instance:
* Housing. You don't need to stay in a high cost of living city, so move to a much cheaper area (maybe a college town).
* Education. You have much more time, so send your kids to all public education, and use your extra time to educate them further.
* Debt. You have a ton of assets. Why hold any debt?
* Automobiles. Bike instead, if you're physically able.
* Health. Probably the hardest one since insurance in the US is tied to employment. I understand the recommended approach here is to pay out of pocket for a plan, but many have trouble with this. Of course, the standard advice is to use the extra time you have due to retirement to stay as healthy as possible, but I acknowledge this isn't a perfect plan.
[1] https://www.mrmoneymustache.com/ [2] https://www.madfientist.com/
There's more debate as to what would be a safe withdrawal rate over the long term without depleting principal, but I expect 3% would be a bit on the high side, although not unreasonable if one has a backup like part-time work.
Of course, that's assuming you withdraw 3% of the initial amount each year and adjust for inflation. Obviously if you only withdraw 3% of the current amount each year you'll never run out, by definition, but you might end up with shrinking spending money.
Still, just a nitpick. I agree with you in principle for sure.
Past results do not guarantee future performance. People in the FIRE community generally look at market performance since the final decades of the XIX century. For many, even these numbers do not guarantee anything, as the growth during these days reflected USA entering its golden age. Who knows if it will last through XXI century.
at this point a reasonable response is "there are no guarantees". If the 4% rule was back-tested through the great depression and generally came out fine, it's probably in the right ballpark.
As another FIRE blogger puts it, "3% or less is a near sure bet as anything in this life can be"
https://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdraw...
In addition, we're talking about a real withdrawal rate; a 4% real rate of withdrawal will be approximately a 6% nominal rate assuming inflation sticks around 2%. It's very unlikely you're going to maintain that from a balanced portfolio over the long term without depleting principle at all. Might be possible with an all-stock portfolio if you get lucky, but significant chance of failure if you get a poor sequence of returns.
Family with kids in a big, expensive city? Probably not.
Monthly expenses = 3k mortgage+ 500 property taxes + 2k daycare for one child(or 529) + 1.5k for food and other = 84k
Without compounding interest you need 10 years to get 2m, and these salaries are for 5+ or more years of experience. (And you need down payment, etc.).
Living in those areas is expensive.
If you are making 500k, that's a different story :-)
Now I wonder how many of these jobs are 100% work from home. I'm not sure a salary doubling could take me away from my family and into commuting an hour a day. But I mean, if they're going to pay me to engineer in my pyjamas, sure! =)
You'd have to pay me 10 times more than I get now, with a huge hiring bonus, to make me move to San Francisco. I'm not alone in this thinking. This is why the market rate is high.
Part of that is sort of circular, due to the bidding war for housing. Part is that some people just hate the political insanity. Part is that people have family connections elsewhere and they have hobbies that are incompatible with San Francisco.
Using that number means I'm roughly at par with a FAANG salary given my level. But it's not like the FAANG engineer is setting fire to that 240k. Depending on where you are in your amortization schedule 20-80ish % of your payment goes to principle. And my 500k house is probably going to be worth 800k in 10 years while the bay area house would be 4.5-5 million. When you take that into account I'm probably at 70% of an equivalent FAANG position.
The more important thing to look at here is risk. FAANG salaries and bay area real estate prices are out of whack with the fundamentals. If you get in and out without the bubble bursting you're sitting pretty. If it bursts or even has a 10% correction the FAANG engineer is way behind.
[1] https://sfbay.craigslist.org/sby/apa/d/cupertino-3-bedroom-3...
The way I see it, every job has downsides, and I could certainly leave to go somewhere a bit more relaxed. But the problem I always run into justifying that is, say I go somewhere where the total compensation is 50% of what I get now- am I really going to like that job twice as much? Tech industry is tech industry, at the end of the day. So, probably not.
We do a job to get paid. So, getting paid is nice.
You have to keep in mind that a 1br apartment in a second tier area will run you like $2k, and that will not be an especially nice apartment. That seriously cuts into the "retire in 10 years" plan.
By the time you're 35, you'll probably have a family with kids. You don't want a long commute to spend more time with said family so your 2000 sq.ft. house on a 7000 sq.ft lot will cost between $1.5M to $2.5M.
You won't get any needs-based financial compensation to send your kids to college, yet chances are that you don't want to deny them going to the best college that they'll accepted to. Add another $200K per kid if they're going to a UC school.
Everything is going to be a bit to a lot more expensive than elsewhere. Childcare, the electrician and plumber who charges $175 per hour (they need to live too), eating out etc.
$400K in yearly pre-tax compensation reduces to something like $250K after tax?
There's no way you're going to retire at 35, unless you're willing to give up on a lot of niceties of life before bailing. I don't know anyone who did.
2000sqft is a larger home, but not absurd if you're married and have two kids.
But if I had to choose one thing where I have no problem spending more than what is strictly needed, it's going to be the place in which I'll be spending the vast majority of my time for the rest of my life.
If it makes you feel any better: for the low end of my range ($1.5M), you're not going to get that 7000 sq.ft. You'll be buying a house on a 3500 sq.ft. lot, so the argument still stands.
That's the bottom line -- cost of living is so high the salaries need to be high too, or people won't accept them.
Obviously, it can't grow like that forever - even professional couples have problems pooling together money for a down-payments on decent median priced homes.
And while you're building equity by owning, you're also kind of stuck to keeping up with salaries / career trajectories.
But you know, with higher salaries comes more purchasing power. And then you also have foreigners parking their assets in the housing market, similar to what's happening in NYC and Vancouver.
It's hard to compete even with a nice $500k salary, when some foreign investor can casually overbid you with millions in cash.
Sounds a bit dramatic, yes, but that's life in most cities with hot markets and high salaries.
The cost of living is higher, but it's well under the increase in pay for being in the area. My current living situation is actually pretty cheap; I split a 4BR house, live 7 min from work, and pay $1650/mo for my portion of rent/utilities.
Most people I know tend to get 2BR apartments and split it with someone, usually paying $2000-2500/mo.
I'm not going to claim renting is universally bad, as it has some upsides (mainly flexibility), but it's definitely financially less savvy than buying, and is generally something you wouldn't want to optimize for at high salary.
Homeownership is advertised as owning an extremely leveraged illiquid asset whose margin calls take years, which is the only reason why it works for people that don't have enough cash to be financially independent another way.
If the only way people save is "force saving" by diving headfirst into something that sucks all of their other assets in, sure.
How could we make housing a terrible investment?
* It should be illiquid. We’ll make it something that takes weeks, no – wait – even better, months of time and effort to buy or sell.
* It should be something that locks its owner in one geographical area. That’ll limit their options and keep ’em docile for their employers!
* It should be leveraged! Oh, oh this one is great! This is how we’ll get people to swallow those low returns!
(copied from amusing thought experiment for another perspective: https://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terri...)
That said, I bought a place to live anyways.
Also, houses here tend to all be over $1M, good ones well over $1.5M. The average sold house price last month in Palo Alto was $2.76M with an average ~1900k sqft: https://www.redfin.com/city/14325/CA/Palo-Alto/housing-marke....
Additionally, I'm slightly concerned about a possible real estate bubble + I'm not sure if I plan to live in South Bay for 5+ years (the usual amount of time needed to keep your house for it to be worth it financially).
It's not that I can't afford a house, I can; I'd just rather have my money in an index fund and rent instead right now.
No
> Is silicon valley really that expensive?
Yes yes yes oh my god yes. Rent eats most of the difference. 300$/mo for a parking space, etc. However, non-local things (like amazon purchases) are the same price everywhere, so you still have lots of purchasing power for those things.
> Or are they literally giving college grads enough money to retire by 35?
Only if you play it right. If you have a high-earning spouse or are willing to live with multiple roommates into your thirties, have no kids, rent an apartment, and live modestly + save diligently. Want to live alone and get food and drinks with your friends every day? That will seriously handicap any strides towards financial independence until you're nearing the 300k range, and even then it takes you from "rocketship bank account" down to "really great life". Very much a first world problem, but if the goal is "retire at 35", the distinction matters.
This is it.
All the answers about Bay Area Cost of Living are just as applicable for people making $150k and would be the same answers if those were the "high salaries" being paraded around.
All thats happened is that the tech sector has multiple of the largest publicly traded companies in the world, all in one place, and its brushing up against the compensation style that the finance sector has had for decades, which has always been divorced from cost of living and closer to the value brought to the organization. Its a good deal with a lot of potential to get better, or the market slows down and it gets worse.
I get paid 1/50th of what the company made in e-commerce sales (similar amounts through other channels).
I can’t quit and prepare for a job interview as I need to maintain visa status. And my workload averages ~60h/week.
I should be clear, I sympathize with the situation and hope that ameen's employer is not cartoonishly evil, and instead would maybe even realize they have improvements to make. But just thinking about possible outcomes of someone venting on the internet, firing doesn't seem like one that makes any sense.
If they are such a central team member to an ecommerce operation, likely the company feels equally stuck with them (e.g. how many sales would be lost if the site went down while looking for a replacement, and would the company even survive that?).
I’ve learned a great deal about how not to run a business, treating employees right, delegating tasks/responsibilities, designing for automation, etc. I do hope when I get my green card to start my own startup (lifelong goal of mine) and try to set an example of everything I see wrong with our industry.
I do doubt my abilities at getting into FAANG without preparing for interviews just because so much of them are just not part of my day to day.
The 10 year exercise window should be standard behavior by now; if you're not given 10 years, your employer sadly doesn't want to be competitive. https://triplebyte.com/blog/fixing-the-inequity-of-startup-e...
Because even when the start-up has a successful exit, and even if you were an early employee, you'll still have a very small chance of out-earning your buddy who joined big tech.
This has been especially true in the past 10 years: look at the stock prices of Google, Facebook, Apple, etc. They've all gone up significantly, making those yearly RSU additions even more valuable. In a rising market, a 4 year vesting schedule works to the advantage of its owner.
I didn't apply for google when I left college because I didn't feel like I would "meet the bar". ~4 years later, feeling like I was a much stronger candidate, I interviewed, hoping to barely scrape by and be the dumbest guy in the room to keep leveling up.
I was dumbstruck by just how totally normal everyone was. Everyone I met at google struck me as being in the 50-75th percentile of my peers in startup land. They're not some high-powered cohort of elite intellectual supermutants. They're regular people. I was ready at graduation, and sold myself short for no good reason.
Now that I work at a BigCo, I feel even more strongly that the bar is, if anything, on the low side, simply because an org that big needs a constant influx of warm bodies. We hire more people in a month than some of my past employers would hire in the lifetime of the company. It's flat out impossible to staff 5,000 people while demanding that they all be in the top 10%.
There are weird and arguably arbitrary hoops to jump through, but you can do it. Interview prep was radically simpler than EG buying a house (in terms of prep, context gathering, etc.)
I have a hard time believing any of these numbers. If I earned any of these amounts for 2-3 years, I could live off the interest for the rest of my life.
"I never sat back feeling sorry for myself. If you don't give me heaven, I'll raise hell" - Jay Z
RSUs from publicly listed companies, on the other hand...
I want to have a place where I have room for a chicken coop (30 chickens) and a 1-acre fish pond. I'm willing to commute by car for a maximum of 15 minutes. A slightly longer commute might be OK if I can afford to commute by horse and the employer doesn't mind.
Which tech hub should I move to?
Double those pay numbers to determine the price of a house that a person can afford... and it is not looking good. I looked around on www.trulia.com a bit. An empty lot of questionable geological status goes for $1,500,000. A small empty lot far from the tech companies goes for $500,000. Most of the actual homes go for millions.
So I guess yeah, it could work for the experienced person earning $950,000 per year at Facebook. That would allow building $500,000 of house on the $1,500,000 empty lot, assuming you can solve the geological issues and get the permits redone.
That is the top pay listed though. It's the top level at the top company.
The mortgage on a 2 million dollar loan (which would be a 2.4 or 2.5 million dollar home) is 10k/mo or 120k/year, which is solidly affordable on a 400k income.
I know of 5 and 6 bedroom houses than can be gotten for that much in Palo Alto and Cupertino.
People overestimate their max credit payments... And financial system incentivizes that (why wouldn't you borrow from 401k? It's just your retirement savings)
(in german) https://www.immobilienscout24.de/expose/108629168
(Though even if serious, I would not do that as you can get more land further out much cheaper and why do you need a pond directly at your house, having it within 1 hour reach for the weekend should be enough)
The pond is so that the kids can go fishing out in the back yard. They don't need transportation, they can be watched from the house, they can have friends over, and there is no performance pressure to catch fish before it is time to go home. They can float on the pond with a canoe or a makeshift raft.
Having a little creek is fine too. Kids can build damns, dig for crawfish, catch frogs, pan for gold, make waterwheels, and so on.
The kids can camp in the backyard, complete with a campfire. The larger back yards have room for shooting.
The point really is personal land to enjoy.
These numbers are absolutely mind boggling. Even with a higher cost of living and California income taxes, you still have at least 100k of free money to invest. It's no wonder so many people apply for jobs at FAANGs. A job at a FAANG is practically a ticket to early retirement.
The one exception: Google pays pretty well in Switzerland, but I hear it's hard to land.
And of course, many people go from, say, QA, help desk, 3rd tier support, or programmer/analyst to developer.
Fact remains, some organizations classify everyone as an IT specialist that does anything with a computer.
My base pay is 150K pounds and not in London! Definitely I have a very niche skill in demand and I had to work really hard and be luck at the same time, to land at this role, but I will any day pick Europe with all the other benefits that a European country gives me.
This is not widely known by engineers. I wish more people would talk about salaries here.
I've been getting offers on that range in London for a few years now but they're senior management roles and I have a pretty unique skillset, FAANG recruiters haven't even bothered contacting me for like 10 years (they were chasing much harder when I was a junior engineer)
The manager from a FAANG company that called me up the other day said the engineer position they're hiring for in Vancouver (senior-ish, but nothing exceptional) has a compensation package ranging from $200-270k.
It's not just the location. I think these companies are just really good at extracting value out of engineers and scaling to make good use of engineers, so it's worth it for them to pay well above market to acquire as many people as they can.
And to the rest of your message -- yes. I love the company I'm at right now and am being compensated fairly well for the market, but with a wife and a new baby on the way there's no way I can not follow up on a job with that kind of pay. For us that's the difference between never affording to enter the Vancouver real estate market and being able to buy a house for cash before we're 40.
FWIW, I make a "meager" half of those starting salaries, but I'm able to save around $80k / year. Why? Because I pay next to nothing in housing.
Purchased my home for $15k. Dropped another $15k in renovations, and that's gonna last a good time. I'm on the track to early retirement, and it's completely possible other places too.
I took a huge pay cut moving away from a big and expensive city, but I can save a lot more, and with a ton less work-related stress.
I assume you’re in Europe somewhere from your comment, but even Bulgaria which is fairly cheap isn’t that cheap. For example, housing outside the center of town in Sofia is about 1000 euros per square meter [1] (for sq ft folks, multiply sq meters by 10 roughly). Varna is a bit cheaper at 700 which is a bit below the countrywide average of 750.
Bulgaria is often listed as the cheapest country in the EU, so I’m curious to understand if there’s a drastic housing price drop somewhere. But even $30k to buy would mean about a 30 sq m (300 sq ft) flat, which is more like microhousing.
[1] https://www.numbeo.com/property-investment/in/Sofia?displayC...
With that said, I have a very nice salary - relatively speaking - but as mentioned, it's around half of what jr. Engineers make in SW.
I'm lucky because my background from both Business and Engineering has been a good mix for landing my current gov. job - and the pay is good because the area / location is not very attractive, and it makes harder to get talent here. (I grew up here, so that's no problem).
Work involves a lot of travel, and I travel otherwise during my vacations, so things rarely get boring.
I've worked all over the world, but after I turned 30, I really haven't had the big-city needs, so living somewhere rural doesn't bother me anymore.
I'm able to save $20k per year in Norway (south) and consider that great, relatively speaking. Remote work? I didn't think the public sector jobs paid this well.
But the largest portion of savings boils down extremely low COL - I have a grand total of $800 / 7000 NOK in expenses pr. month, that includes everything. Pre-tax anywhere between $120k-$130k, depends on OT and travel.
State / gov. (directly or owned) jobs can pay pretty well, if you find the right positions - but they tend to lean towards engineering or medicine.
Is dev compensation bimodal?
https://danluu.com/bimodal-compensation/
i.e. can you draw a line between devs who get paid a lot and those who don't?
I wish there was a date on this article (and all blogs) but it looks like it's from 2015.
The conclusion isn't crisp, but to me it's plausible that the trends have continued since 2015, e.g. maybe it's more bimodal 5 years later (though I haven't really been paying attention). I would be interested in a followup.
It was enlightening, and made me go to my manager to ask for more.
The number on levels.fyi closely match what I saw in those offer letters.
According to this, the Senior, Staff, or Principal titles are generally for people with 5+ year experience? Those roles make up 30%, 10%, and 3% of companies respectively. That leaves 57% of engineers in positions listed are usually for people with 0-5 years experience. Does that mean over half of engineers are relatively new to the industry? Are there large numbers of engineers that go their entire career without getting a Senior title? Are there large numbers that end up changing industries? I know some people transition from hands on engineering to management, but there can't possibly be that many management jobs to make up that difference, right?
But re-read the description of "Software Engineer (II)" closely:
> Typically 2-5+ years of experience. [...] At many companies, this is considered a 'career-level', as in you can spend the rest of your career operating at this level without being pushed out for not being promoted.
So, it doesn't suggest it caps out at 5 years, and this could be where people who do "good, but not outstanding" work end up. Also the next level says "Role shifts more towards design rather than implementation depending on size and expectations at company.", so maybe the big break isn't "seniority and how good you are at your job" but rather "can you, and do you want to, work at the next level of design abstraction?"
* Today's big tech companies are still relatively young, so the workforce is young.
* The companies have grown exponentially in recent years, and they've hired many new grads to meet hiring targets. This would also shift the average employee age lower.
* The people who joined these companies 15-20 years ago would likely be very well-off financially by now, so they don't need to keep working. They've retired early, created start ups, left the Bay Area, etc.
I think there's likely some truth to these claims. But Silicon Valley also has a reputation for ageism, so who knows.
https://i1.wp.com/danwang.co/wp-content/uploads/2017/05/bach...
CS enrollments reached a max around 2000, at the height of the dot-com bubble. But when the bubble burst in 2000-2001, enrollments plummeted in 2002, 2003 and 2004, leading to the local minimum in graduates in 2009.
https://cs.stanford.edu/people/eroberts/CSCapacity/images/BS...
Facebook and Google do ads, and most online advertisers look for immediate, real value. These success stories are as real as e-commerce.
That brings us to Amazon. It's e-commerce is real, but margins are low. AWS looks more like the dot-com bubble in that some of that money is coming from VCs. If funding dries up, AWS gets hit. That said, there's a larger migration to the cloud, and that's also real.
Apple makes high-margin phones that people all over the world buy. Full stop.
Netflix is the least like the others. It's smaller, and while it revolutionized how we consume content, it's current model is heavily funded by debt, and it's facing stiff competition. No one's talking about how Netflix will take over long-form video, they're griping at having to pay for six streaming services.
The alternate story for tech salaries is that PCs and the internet weren't ready for prime time in 2000. After the bubble burst, there were too few CS grads for when the internet was finally ready. The internet wasn't ready until 2006-2010 when most people had broadband at home, smartphones matures, and LTE was ready.
These salaries come with a big gamble on SV real estate and the market performance of these companies. The first one is a big difference between young and middle aged people. In my 20s I averaged a new home every year as my financial situation changed and I wanted to live in different parts of a city. Now in my 30s with a wife and kid I don't expect to move for 10+ years. The only way to achieve that is buying a house. Which, in SV, means plunking down 3-4 million. That's doable given the salaries, but it's a huge bet that the real estate bubble won't burst.
Same thing with the market performance. Sure, the FAANGs + MS (and minus Netflix) make a ridiculous amount of money and that likely won't change. But what about companies like Snap, Pinterest, Lyft, et.al. that lose money? There's a huge risk that these companies (1) go bankrupt or (2) decide to focus on profitability and slash their engineering workforce.
If you're a 20 something renter you ride the gravy train as long as it keeps coming. If you're a 30 something with small kids and a mortgage you want stability.
I think you're pretty deep in the bubble or you have really extreme tastes. I have tons of friends in their 30s with kids in SV and NYC. Almost all of them are renters. The actual financial calculation for renting vs. buying in these markets is brutal. You need to stay for 10-20 years for buying to start to make sense.
Also, you don't need $3-4mm in either of these markets to buy a place suitable for two adults and a child. There are plenty of 2 bedrooms for a third of that.
If you want to afford a nice house in a good neighborhood with good schools in the Bay Area, you’ve got to go into management.
What you might be trying to say is there are more available positions at VP than DE, so your chances of making it are better? Or that being promoted to VP is easier than to DE? I think having seen how the sausage is made, would agree with both of those.
Sure, it exists. How many DEs do you know of, vs. VPs?
How do you get a DE job? Usually you are the most well known person in your field.
How you do you get a VP job? You have to be a pretty good manager.
At Google, there are 100s of VPs. There are maybe 10 DEs, if that many.
That's the BS. It's like saying "there is totally a path to getting really rich as an actor!". Sure, there is a path, but not a lot of people make it. And even the ones that do usually get there by also doing the management path (producer) at the same time.
The lie is in the claim it's just as easy to climb the DE ladder as it is the VP ladder.
It's not. Not even close.
Fwiw, the number is significantly higher than 10, though still fewer than there are VPs.
That said, things get tricky: there are DEs who have reports, and there are VPs with no (or trivial, like 3) reports. But either way, if your metric is DE/VP or if it's manager of a large org vs IC/TLM, the number of IC-track people is higher than you suggest.
Ageism is real, but so is the growth of the engineering profession, and so is early retirement (which is definitely possible at the salaries senior people make, especially if you consider they bought houses in Silicon Valley for a lot less than they sell for now).
Jackpot!
All it takes for this to happen is that the number of software engineers in the world grows by 10--20% every year. (Because this means it doubles every 5 years, which means half the workforce has less than or equal to five years of experience.
I recall reading somewhere that the actual growth of the workforce is even greater than that -- somewhere around 25%!
Around minute 13
https://youtu.be/QHnLmvDxGTY
WHAT?
I don't know a profession with high knowledge requirements where after 2 years you can and are expected as a job req to manage a team.
This speaks to me two things: a. a lot of staff is young and unexperienced b. rotation in segment <5 is big
https://news.ycombinator.com/item?id=21964946
So the proportion for a large majority of startups is not similar to what this document shows, which is centered to bigger (1000+ engineers) companies.
They might get tired of the politics at their company, or they just want to try something new, or founding/joining a smaller company might be the easiest way for them to continue to get promoted
But Lyft, haemorrhaging money, is top of the list, and Oracle - the company no-one in the Bay Area or on HN seems to work for, and everyone seems to hate - is 5th? Are there legions of quietly-well-paid Oracle engineers out there just keeping their heads down and getting on with the job? Why isn't Oracle in the more senior lists - they make complex and expensive databases, isn't that something you need to pay a lot of money to get really smart people to work on?
And Netflix, which I thought famously paid very well, only pops up in one tier?
It's more likely I'm misinformed than this list is wrong, but I find this pretty surprising.
The people that work at SAS are not the top tier, at all. They have a surprisingly large number of test engineers too. From what I gather the 35 hour a week thing is a myth, and benefits are mediocre compared to top tech companies.
I'm also wondering how much of the salary (which certainly contains a lot of stock) is due to stock appreciation. If someone joined Amazon in late 2016, the value of their stock awards has more than tripled.
Do offers for these companies go this high, or is this only after a few years? This seems it's more "what I'm getting paid now" rather than what the offer was.
Collecting offer letters is an interesting way to build trust in data. What's the incentive for someone to upload their offer letter though?
What makes you think companies hold all the cards? Especially in tech.
That gives you extra leverage and extra information.
In other words, the success of this strategy is market-dependent, but it certainly seems to have a huge effect in SV.
It's important to be aware of 'BATNA's, ie the best alternative to negotiated agreement. See https://en.wikipedia.org/wiki/Best_alternative_to_a_negotiat...
For the employer that means hiring the next best candidate, or not hiring anyone for that position. For you it means taking the next best offer, or staying at your old place etc.
The concept is closely linked to opportunity costs.
In general, you can negotiate an agreement only between your BATNA and their BATNA.
(Part of interviewing in batches is that you can credibly present that your BATNA is very high. So you can be tough in negotiations.)
This is the biggest difference between now and 15-20 years ago. Before it used to be a secret but now everyone shares the data.
I'm L5 and I earn 400k+ (I joined last year), the compensation on levels.fyi also lines up accurately to my company's compensation data group (in which individuals anonymously report their salary).
These compensations are also accurate to those reported on Blind (anonymous work discussion app) by hundreds of individuals.
I have many co-workers and friends, and know the soft max paybands of each level. The comp reported on levels.fyi is very accurate.
Typical L5 who earns 400k might be 225k cash/175k stock.
If so, then the movement of the stock price is irrelevant.
Others have mentioned that it's primarily based on offers, in which case my interpretation stands.
I'm an L5 that joined one of those companies last year, and earn 440k/yr. If I counted stock inflation, it would be 500k/yr.
Lists like these are incredibly misleading, as they include non-cash bonuses. First off, these bonuses (say, RSUs) take a while to vest (incurring opportunity cost), can go down (there's risk), and so on. For example, being an early junior engineer at the next unicorn can make you orders of magnitude richer than working for FB or GOOG as a distinguished engineer (basically top 0.0001%). But that's kind of a silly data point, because you're probably making a 70k salary, whereas the distinguished engineer is making like a 250k salary.
So let's stick with cold hard cash or let's stick with bonuses, but it's misleading to conflate them.
In other words: it does not take into account stock appreciation.
I don't know whether or not that's generally true, but from where I sit, the numbers seem sound and are not inflated due to a rising stock market.
I know some companies like Facebook have crazy signing and relo bonuses ($50-100k+), however the base may be much less (Taxes are also different as I recall)
Also a couple of the companies listed (Airbnb and stripe) have yet to go public so those RSUs are not exactly liquid cash like with goog/FB stock
I agree that levels.fyi is doing a poor job of comparing the value of RSUs. For example, Microsoft / LinkedIn stock grew 55% in 2019 and pays a dividend. If MSFT did that again this year, it might eclipse Aramco. It would be more useful if levels.fyi simply recorded the raw grant details (e.g. RSUs uniform 4yr vesting N shares) and used stock price data to facilitate comparison. That's especially key when looking back upon offers 3-4 years back to asses salary growth (and potentially find oddities like no-poaches).
Risky or not, you'd be exceedingly dumb to not take RSUs into consideration when accepting a job offer somewhere. Chances are that they'll be a major part of your total compensation come tax filing time.
I mean... just... wow. You could retire at 35 and not have to work for the rest of your life.
How hard is it to get these jobs?
Why does everyone on this site want to “retire by 35”? I don’t know anyone who retired (or plans to retire) at 35. Besides, hand-waving about “basic financial literacy” aside, doing so would require living like a broke college student from age 22 to 35, and then moving to an RV in Nebraska to live out the rest of your natural life in “retirement”. What the fuck is the point?
That’s not an unusual offer for smart software engineers coming in from top colleges, where you’re being hired to work at Redwood Shores or Seattle.
Having a Masters or PhD will push it up a bit higher again.
I think it's less that self reporters are lying and more that there's a selection bias among self reporters. Engineers with average salaries probably don't bother to report.
No, that's simply unfair to the companies who don't have billions of dollars in free cash flow or effectively infinite amounts of VC money.
The top firms have gotten themselves into an insane bidding war which has a side effect of creating an oligopoly on talent, as it's simply unrealistic to impossible for many firms to compete. Not to mention they apparently pay many people these sort of salaries to do basically nothing [1]: they've decided it's better to simply retain talent than risk them going to a competitor, regardless if they provide any value or not.
That all said, as an employee in whole debacle, you should simply focus your interviews on firms willing to pay these levels and maximize your income while you can.
[1] https://news.ycombinator.com/item?id=21961560
No, it's set by the least optimistic seller.
That's the reason we have labor unions -- to stop those that otherwise would work for low wages and/or in deplorable conditions, from doing so. Thus undercutting those that "hold out" for fair wages and conditions.
Think about it. If the entire graduating BSCS class of 2020 banded together and declared they would not work for less than $400k/yr starting, FAANG would simply have to pay that (they have the cash). It's because there's one dipshit willing to work for $250k TC that all the rest have to take that salary as well.
I don't think Google is purposely ok with some of their employees doing basically nothing. I've heard the theory that companies pay for some top talent who don't generate value just to prevent them from going to competitors, but is there any hard evidence for it?
[2] https://www.businessinsider.com/rest-and-vest-millionaire-en...
[3] https://www.quora.com/Silicon-Valley-TV-series-Do-low-perfor...
[4] https://money.cnn.com/2007/01/05/magazines/fortune/Search_an...
That may be true, but there's more to it than that. The first wave of successful IPOs (Facebook, Amazon, Google, Twitter, etc.) caused a spike in housing prices as employees purchased houses. On top of that, companies have added tens of thousands of new jobs, without proportional growth in the housing supply. So housing prices are now absurd, and these companies need to pay more so their employees can buy smallish houses on the peninsula at $1.5-$2.5M a piece and have a middle-class quality of life.
Just look at Vancouver as a far more extreme example of how local property prices can be out of whack with wages.
House prices are a function of wages (or, more accurately, have a floor set by wages if land is constrained) not the other way around.
Also, the level of entitlement by a lot of such engineers I find to be borderline disgusting. Why do you think you're entitled to a $1.5m house at all let alone 3 years out of college? If you really want cheaper housing (as a function of income) just move to a lower income area. It's actually pretty simple.
But the most objectionable part for me is not just how much of a non-problem this is but it completely ignores people with real problems, like, oh I don't know, the people who drive the shiny white buses who need to live 2+ hours away. Or those not in tech who have to do the same.
Engineers are compensated well now because of the value they create for their employer, nothing more, nothing less.
I guess if you state it as a fact, that makes it true?
But if that’s the case, why would the company pay an engineer more when she moves from the Austin office to the NYC office? She has become more valuable to the company overnight? And the most valuable engineers just happen to live in the most expensive cities?
Sorry, but salaries are impacted by cost of living. Because if they’re paying top talent too low relative to cost of living, those engineers will just move elsewhere, as you suggest.
Yes, this puts a tremendous amount of pressure on the housing market, affecting everyone in the Bay Area. I’m not claiming this is good.
Vancouver is a different situation entirely.
> Why do you think you're entitled to a $1.5m house at all let alone 3 years out of college?
This is not at all what I said. And most people I know here cannot afford a house 10+ years out of college, unless they’ve worked at a top-paying company all those years.
Who is claiming they’re entitled to it? I’m saying companies are offering it to retain employees, because it’s in the companies’ best interest.
> it completely ignores people with real problems, like, oh I don't know, the people who drive the shiny white buses who need to live 2+ hours away.
And there are plenty of people less fortunate than the bus drivers. By your logic, if they don’t like it, they can just move somewhere cheaper. Maybe it’s just too late in the evening, but I’m not really seeing your point here.
This is dubious.
That's the same situation as in Sydney, but Aussie engineers aren't getting near the level of pay of Bay Area engineers.
It's not the housing prices, it's more the labour market competition.
In the US, the discrepancy between Bay Area and non-Bay Area salaries is not as great as they seem at first glance, once the real cost of living is factored in.
But Melbourne has far fewer high-paying positions, so it's not really much of a help.
I mean.... so what? Why should I, as an engineer, care if some companies are suffering under the "unfairness" of high salaries?
> which has a side effect of creating an oligopoly on talent
It doesn't really make sense to use the work oligopoly, which has certain negative connotations, for a situation where companies are merely choosing to outbid others.
I would only use the term oligopoly, if there is some sort of unfair barrier to entry, such as because of some government law that is hindering competition.
You shouldn't, you should always maximize your income. That wasn't my point. My point was the guy shouldn't interview at a 5-person bootstrapped startup and act bewildered when they cannot offer Facebook level comp packages.
> oligopoly
It's absolutely an oligopoly. There are a small number of firms who possess the capital to compete on salary and that creates a extremely high barrier to entry. It's not a bad thing, it's just the reality of the situation. There's plenty of options though, e.g. don't decide your HQ must be in San Francisco.
Maybe that's true of Walmart and GM, but your random A/B round startup? I don't think it is unfair at all. They could offer legitimate equity of they choose not to. Sure, it would be still be a gamble but at least it would be French roulette and not the West Virginia lottery.
Some of the numbers are skewed by the unicorn startups: since employees at Airbnb and Stripe (and Lyft and Pinterest, at the time these numbers were reported) can't sell their equity, and since the equity may drop considerably after IPO, these companies compensate by offering more of it.
LinkedIn is widely known for paying extremely well (to the chagrin of people at parent company Microsoft). Same with Netflix.
At the moment these few companies are expanding as fast as possible and have an infinite number of positions that pay these amounts until they dont
These comp ranges from the growing companies on that list arent different from the tech giants
This is top 5. Look at the difference betwen position 1 and 5 (30% (sic!) for entry level). Ask yourself how many companies are in the SV area?
Then think where MEDIAN of those numbers is.
Looking at top 5 is like looking at best performing stocks in last year (from 5000 of ohers), and thinking "YEAH, thats what I should expect from my future investment portfolio".
The contrarian position now is to double down on a small number of stocks where the business model function as a data aggregator hence FANG. As opposed to index tracking style portfolio investing, even your Uber driver has ETF's.
Based on this, your portfolio should have only contained FAANG companies for the last 5 years.
The argument for "Your portfolio should only contain FANG companies" would be "Every single one will outperform the market by at least 2X and up to 6 X over the next 5 years".
Buying FAANG in 2020 is buying assets whose price has just gone up a lot - the very opposite of contrarian.
Why don't you do a round of interviews for roles at the big tech companies in NYC? You could probably double your comp pretty easily.
Play the game, or get paid less than those who do.
Keep up the good work!
The only exception I can think of was the people brought in to work on the 'next gen' cloud stuff who were poached from Amazon. They were all 'senior' and 'principal' engineers though.
The main thing I would point out is that the years of experience guideline is a bit optimistic. Many engineers get downleveled moving into top paying companies (so someone with 9 years of experience might be level 2) and usually either level 2 or level 3 is a terminal level, meaning it’s both ok to stay at that level for a long time and that promotions get harder.
Also, while these figures don’t (or shouldn’t) include signing bonus/relo, nor health insurance, free food, and other benefits, it should be noted that most of these are in the Bay Area or similarly expensive areas. So a lot of your money goes to housing (with housing close to work large enough for a family being super expensive), and state taxes are a bit steep.
Some of the numbers can be hard to comprehend... for example, tech salaries weren't great until about the last decade. And, it used to be that the eye-popping numbers were not for everybody, and certainly not for entry-level / new-grads. Heck, just the amount of transparency in compensation available now was completely foreign when I started my career. Likewise, what's interesting is that in our always connected digital world, location still matters. Thus, for someone not working at a FAANG and not in specific geographic locations, these numbers are other-worldly.
Yes. other-worldly is a good word for it. It's not so much that people don't believe these numbers, I think. It's more of a sense of disappointment and feeling left out.
So many experienced professionals work their whole adult lives and end up maxing out at only a 1/10th of the compensation of a "principal" at a FAANG in Silicon Valley.
OTOH, being forced to live in California is a huge downside to any FAANG job (for me, anyway).
Seattle and NYC also offer otherworldly packages.
Google (and probably other FAANGs) also pay extremely well in Boston, Los Angeles, Boulder, Chicago, Austin and Zurich/Switzerland.
You must not like being able to go snowboarding on a Saturday and surfing on a Sunday :)
But yeah.
While the raw salary data on levels.fyi is useful, other context about the candidate & team is pretty important. For example, my friend has no college degree but matched to a very profitable / well-funded team, so he got a relatively larger stock award. levels.fyi probably has a pretty good estimate of how each company assigns base salary bands to the now "standard" four levels (junior, senior, staff, decorated).
It seems sign-on bonuses grew a lot in 2019. Several posts for Facebook new grads getting $100k sign-on bonus.
LinkedIn
Senior
* 185 base, 10% bonus, 300k - 400k for 4 years stock, 60k sign on
* Total Comp: 294 - 319 / yr
Staff:
* 210 base, 15% bonus, 600k for 4 years stock, 75k sign on
* Total Comp: 411 / yr
Senior Staff:
* 230 base, 20% bonus, 1M for 4 years stock, 100k sign on
* Total Comp: 551 / yr
Facebook
Senior:
* 210 base, 15% bonus, 700k for 4 years stock, 80k sign on
* Total Comp: 437 / yr
Staff
* 225 base, 20% bonus, 1.1M for 4 years stocks, 100k sign on
* Total Comp: 570 / yr
Google
Senior
* 195 base, 15% bonus, 750k for 4 years stock, 100k sign on
* Total Comp: 438 / yr
Staff
* 220 base, 20% bonus, 1M for 4 years stock, 120k sign on
* Total Comp: 544 / yr
No idea for Austin, but I used levels.fyi to give me an idea of what to expect and negociate, and it helped a lot (and was on point with what I got offered). I think you can filter per city, so there might be some data for Austin.
Given that the salaries are so driven by market demand, it makes total sense that there's large differences in other markets. It doesn't mean you're getting shafted. Low minimum wages is what we should be getting angry about.
OTOH, there is the separate issue of FAANGs not compensating their European workers as well as they do the ones working in the US.
Still, almost all industries will be tech-enabled in the future (software eating the world etc.), so one would expect European banks for example to up their game when it comes to tech salaries. Alas, it seems that they're are also quite poorly run [1], so I wouldn't hold my breath.
Also, apart from Spotify, European tech workers haven't been able to enjoy the benefits of the streaming wars. And even Spotify is hamstrung by relatively low margins due to high licensing costs [2].
I guess the one industry that might have already increased their rates for SWEs is the car industry and specifically, the relatively profitable German car brands. But it seems they're more focused now on producing electric cars rather than creating online services [3].
As a European tech worker, if you're not willing or able to move to the US, two good options can be to get involved with local startups or to go into independent consulting. Maybe a little ironically, the opportunity costs of starting or working for a startup in Europe might be lower than in the US, due to the smaller pay gap.
[1]: https://www.economist.com/leaders/2019/04/06/fixing-europes-...
[2]: https://www.statista.com/chart/13406/gross-margin-of-spotify...
[3]: https://www.ft.com/content/81a5030c-1a64-11ea-97df-cc63de1d7... (apologies for the paywall).
They don't, but they do compensate them similarly relative to the local average pay. They pay what they need to to get the talent they want.
I work at Google Munich, the pay here is much higher than a regular company in Munich, similarly to how Google pays much more than a regular company in the US. In some ways the difference is even more striking here, because there are few peer companies here that pay similarly to Google (there's a Lyft office, and a small number of Amazon devs, that's about it AFAIK), whereas in major tech hubs in the US you usually also have Facebook and Apple and Amazon and Microsoft and Netflix and various others that are similar or close.
The brain drain was real. Why would any engineer bother with other sectors, when you could get paid 50%-100% more in O&G, compared to other sectors? Startups, almost no mater how well-funded (by European standards), couldn't compete.
But, surprise surprise, the good days came to an end - massive layoffs, and people suddenly found themselves in those other "lesser" industries, with massive pay cuts.
The good news is that I've seen an explosion in entrepreneurship and tech the past 5-10 years, and people are more willing to try those routes, as well as that the VC community seems to grow stronger.
It's not an unreasonable way to calculate it, and given the way the economy has been going in the past 10 years, it's lowballing the real taxable compensation.
I understand the rant and a sense of discomfort us engineers are facing looking at the dataset. I would definitely want to get more context out of these numbers like -
> Why these engineers are paid so much and why others are not?
> Is education/college a factor in this pay gap?
> If one wants to earn this much. What are the required skills to achieve this goal?
It is a very good sign that a level of awareness is being developed about the pay gap not in among different genders but also within the same organization/experience levels.