"2022 is the year where Tech Compensation drops for the first time in decades."
First line of the actual article.
Subheader: "2022 is bringing us one of the largest declines in tech compensation in decades"
Not sure how you are confused. Yes, Salary was used in headline, but the article made it very clear it was instead referring to compensation as a whole, and how this was affecting, basically, your take home.
So, not sure where the article (which is pedantically separate from the headline) is confusing about this.
Meta: It's annoying to see comments discuss the typos, the precise definition of things, and the otherwise useless pedantic-isms in HN articles. This isn't a recent occurrence, and I'm sure I've been a part of the problem in the past, but these comments are usually worthless at best, if not harmful in that it detracts from a more useful and constructive discussion.
In the race to be "clever" and "technically correct", it's actually lazy and pointless. I wish there was a way to simply filter out this drivel.
In many ways I dislike even having to type this meta commentary, but I feel it needs to be said. Apologies for the disruption.
The difference is between something obvious and uninteresting (equity comp goes down when the value of the equity goes down) and something interesting and untrue (tech salaries are crashing). I get that post writer needs a hook in case they have something interesting to say about the equity comp situation (having read the article I don't think this is the case), but lying in the title to trick people into reading your article is still bad.
I disagree. Here on HN, I generally read the comments before reading the article because I'll usually get a quick idea of whether the article is worth my time.
This doesn't work well elsewhere, like Reddit, but it does work here. Comments will, at the very least, steer me clear of wasting time. I'm guessing I'm not alone, though.
Focuses on stock grants from the big tech cos. Interesting, but more interesting to me is if salaries will drop across the board, which I feel will have a bigger impact on more people.
True title should be "The Great Tech RSU Compensation Crash". :)
Another interesting factor (obviously not specific to tech) is inflation. This means that real wages probably declined by closer to 20-25% once accounting for that.
Supply and demand. Supply of available workers is going up due to crypto/tech bubble popping, remote work, etc, and demand is going down because we’re in a technical recession… why would base pay increase?
They can't do that easily though. If a company pays $100,000 in stock-based comp. that has no impact on their cashflows. You're effectively paying your employees with investment capital which is great if you have a hyped public stock.
If you start paying all your engineers in cash suddenly your operating margins will drop and investors will get nervous that you're going to run out of cash. Imo there are a large number of unprofitable public tech companies today that rely almost entirely on their stock price remaining high to sustain their engineering costs. Instead of higher base pay, layoffs are far far more likely. Many of these companies simply don't have the cashflows to pay their engineering teams in cash.
The beauty of inflation is that you can say this and even believe it, but your salary is down anywhere from 9% to 20% depending on how much you want to trust some of the most massaged CPI numbers ever put out by a government.
How much rep do I need to downvote submissions again?
Enough that people think you're @dang. All you can do is flag a submission, which is what I did. I rarely flag stuff that makes it to the front page, but this is such egregious bait-and-switch clickbait I made an exception.
Editing it to say 'If you work for a FAANG your total compensation just crashed' would make it honest. Guess the admins can do that, I've never looked much into the internal workings of HN.
Article seems to be clickbait and, worse, after scrolling partway a popup appears demanding an email address and prevents you from reading the rest of the article.
Facebook only granted stock yearly, even when their performance review process happened every six months. So that "squeeze effect" doesn't mean much, IMO.
If your RSUs are significantly devalued due to a price drop most tech companies will just give you a supplemental refresh to bring you back up. You might not be 100% whole to your target total comp but nobody is letting good engineers take a 35%+ cut to TC (65% to stock) because if they do they will lose their top talent.
If I am a strong engineer and my comp gets cut by a 65% reduction in share price and I am at a BigTechCo then I can probably pretty easily:
1. Move to a peer company in regards to comp (Meta, Goog, Twtr, Msft, uber, airbnb)
2. Get a signing bonus of $40-100,000+ To do so
3. Get a new hire set of RSUs with a valuation at the current share price vs my previously underwater ones (which if the whole sector has gone down will probably work out really well for me long term).
TL;DR total comp at the elite/liquid RSU level wont go down much.
Some people are going to buy the "you'll get shares at a better price at the next refresh", at least for a year or two. TBF, if that happens and prices go back you should be very happy.
Question is whether it's going to be a multi-year collapse with the shares under water for ages and ages.
A year ago or so I heard about tech workers taking out margin loans (for home purchase) against their RSUs and similar. Wondering how that's going right now.
I think a replacement acronym for FAANG may be in order if Netflix continues its downward trajectory because simply removing it from the current one won't work.
I always roll my eyes a little bit when people use the "FAANG" acronym because Netflix never really seemed like a good fit and it leaves out Microsoft which seems like a better fit. Nevermind that "Facebook" is actually "Meta" now and "Google" is actually "Alphabet" now. See also https://en.wikipedia.org/wiki/Big_Tech#FANG,_FAANG,_and_MAMA...
Oh no! Stock options and other stock-based compensation for less than 1% of tech workers is suffering from the easily predictable end of the longest stock bull market in history.
Now that these shares are hammered and more fairly priced, wouldn’t these few, rare, lucky FAANG workers be better off since the share prices are less likely to fall as far now?
Isn't stock options meant to be under total compensation. Salary to me is the $$$ in my pocket that I get paid for showing up tomorrow, every two weeks.
33 comments
[ 3.3 ms ] story [ 80.2 ms ] threadFirst line of the actual article.
Subheader: "2022 is bringing us one of the largest declines in tech compensation in decades"
Not sure how you are confused. Yes, Salary was used in headline, but the article made it very clear it was instead referring to compensation as a whole, and how this was affecting, basically, your take home.
So, not sure where the article (which is pedantically separate from the headline) is confusing about this.
Meta: It's annoying to see comments discuss the typos, the precise definition of things, and the otherwise useless pedantic-isms in HN articles. This isn't a recent occurrence, and I'm sure I've been a part of the problem in the past, but these comments are usually worthless at best, if not harmful in that it detracts from a more useful and constructive discussion.
In the race to be "clever" and "technically correct", it's actually lazy and pointless. I wish there was a way to simply filter out this drivel.
In many ways I dislike even having to type this meta commentary, but I feel it needs to be said. Apologies for the disruption.
Commenting about it promotes it.
Comments like the one I replied to are worthless at best, and more harmful than any title.
This doesn't work well elsewhere, like Reddit, but it does work here. Comments will, at the very least, steer me clear of wasting time. I'm guessing I'm not alone, though.
True title should be "The Great Tech RSU Compensation Crash". :)
holy clickbait, Batman.
Supply and demand. Supply of available workers is going up due to crypto/tech bubble popping, remote work, etc, and demand is going down because we’re in a technical recession… why would base pay increase?
If you start paying all your engineers in cash suddenly your operating margins will drop and investors will get nervous that you're going to run out of cash. Imo there are a large number of unprofitable public tech companies today that rely almost entirely on their stock price remaining high to sustain their engineering costs. Instead of higher base pay, layoffs are far far more likely. Many of these companies simply don't have the cashflows to pay their engineering teams in cash.
Otherwise nothing changed.
How much rep do I need to downvote submissions again?
The beauty of inflation is that you can say this and even believe it, but your salary is down anywhere from 9% to 20% depending on how much you want to trust some of the most massaged CPI numbers ever put out by a government.
Enough that people think you're @dang. All you can do is flag a submission, which is what I did. I rarely flag stuff that makes it to the front page, but this is such egregious bait-and-switch clickbait I made an exception.
I have no patience for that kind of bullshit.
Curious. I did not have that experience. I was able to read the full article normally.
Good job.
If I am a strong engineer and my comp gets cut by a 65% reduction in share price and I am at a BigTechCo then I can probably pretty easily:
1. Move to a peer company in regards to comp (Meta, Goog, Twtr, Msft, uber, airbnb)
2. Get a signing bonus of $40-100,000+ To do so
3. Get a new hire set of RSUs with a valuation at the current share price vs my previously underwater ones (which if the whole sector has gone down will probably work out really well for me long term).
TL;DR total comp at the elite/liquid RSU level wont go down much.
Question is whether it's going to be a multi-year collapse with the shares under water for ages and ages.
Now that these shares are hammered and more fairly priced, wouldn’t these few, rare, lucky FAANG workers be better off since the share prices are less likely to fall as far now?