

Are we really worth $3.5 million? - vital101
http://www.re-cycledair.com/are-we-really-worth-3-5-million

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strlen
In disagreement. Google's revenue per person employee is $1.34 million[1].
Variation between individual engineers (according to Brooks et al) can be as
high as 10x (leading to the famous "10x engineer" meme). This 3.5 mm is (most
likely) vested over four years. Google doesn't hire from the bottom end, but
given he's risen to staff (or is it senior staff?) level we can safely assume
he's at least 2x more productive than an average engineer at Google.

So the "naive" numbers mean that over the course of ten years, they could make
up to $10mm from this person.

Obviously, we don't know his marginal value (how much would Google lose if he
was let go and no replacement was found?), but it's safe to assume Google will
_make_ money if he takes their offer and stays vs. if he leaves (even if
wasn't going to a competitor): why would an engineering/metrics driven
(sometimes to the point of "41 shades of blue") company make this offer, if
they didn't think the bargain was _theirs_?

He could also easily be worth more than $10mm (imagine if his contribution was
an algorithm to increase CTR on ads but a few percent!) and I imagine Google
_does_ make an effort to measure a) how much money a product makes b) how much
do various engineers contribute to various projects. This is likely a highly
rational decision.

[1] Source: [http://www.businessinsider.com/chart-of-the-day-google-
reven...](http://www.businessinsider.com/chart-of-the-day-google-revenue-
dollar-per-employee-2010-1)

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Andys
Why are multimillion dollar bonuses accepted and standard for management but
somehow shocking for engineering?

I like seeing recognition that a top engineer's work could net the company
many millions of dollars of revenue.

~~~
m104
Exactly. I read an article like this as implying that, "serious money is only
for executives and rich people, not for _workers_. Workers are commodities,
tools."

From the article: "How many lives could be saved through research, aid, or
vaccines? How much _good_ could be done with $3.5 million?" The author is
literally implying that giving $3.5 million to a world-class engineer is a
_waste_. Not a word about the millions or billions of dollars of compensation
for management, as you said. None. It's as if the author can't possibly
imagine that a single engineer could do work valued at $3.5 million, ever.

What causes this type of mentality? What is this even called? Crab-bucket
mentality? Self loathing? It's one thing to see workers struggling for fair
compensation for their contribution to an organization's financial success and
quite another to see a resistance "from within" to that struggle. Don't
programmers, engineers, designers, etc. _want_ their peers to be more
successful?

~~~
mkelly
All of this is a lot more diluted when the workers you're talking about
already make much more than is required for comfortable subsistence.

It's one thing to talk about self-loathing hurting the cause of workers
struggling to meet their basic needs, but at the level of most employed
software engineers, I'm not sure how much it matters.

That said, I don't see any difference between engineers and executives in this
regard, so if it's okay (by whatever measure) for one to receive multimillion-
dollar bonuses, so it is for the other, IMHO.

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patio11
It would be impolite to mention who the client is or specific numbers, but
let's say this is a fiction based on recent experience:

FooCorp is a well-known software company which makes FooBar, a product
virtually synonymous with bar. FooBar's rankings for [bar] suck because
FooCorp has a longstanding institutional distrust of SEO which they are only
recently recovering from. FooBar's yearly sales are $5 million. Successfully
implementing my recommendations regarding SEO and conversion funnels would,
conservatively, increase that to $6 million. The marginal $1 million is about
95% profit.

I worked at FooCorp for _two weeks_. Pretend the client is operating on Google
scales, where $1 million is penny ante and barely rates a mention in a weekly
summary email. Now pretend that the engineer works for four years. Now pretend
that the engineer is provably responsible for at least one 5% improvement in a
core revenue-generating Google product ( _cough_ only two choices here _cough_
). Now pretend that improvement was highly non-obvious and Google does not
believe it would be easy to replicate if they only had a team of genius PhDs
and infinite money to throw at the problem. Now pretend that said employee is
reasonably expected to do more good work in the future... and just said he
wants to go to Facebook.

You tell me, is he _really_ worth $3.5 million?

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ajg1977
This article (and all the other web commentary) is silly. In any competent
company employees are be valued not by their skills, but by the value they
bring to the table. For all we know this guy is a proven contributor and $3.5m
is a bargain.

What if this was three years ago, and the person in question was Paul Bucheit?
What if by staying, FriendFeed had been a Google property? Would that be worth
$3.5 million dollars?

What if it was seven years ago, would it be worth Google paying $3.5 to retain
the person who would go on to basically invent AdSense?

Of course it would. Case closed.

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sp4rki
So what.. I'm not worth 3.5 million dollars because the money would be "better
used" by donating it to whatever cause the author deems respectable? Is that
even logical? Where was it written that Google planned to donate 3.5 million
dollars and are now not going to because they gave restricted stock to a staff
engineer? Oh and how are _we_ supposed to take seriously someone saying that
_we_ are probably worth around 100k ~ 500k tops? WTF does that even mean?

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waterlesscloud
It's possible that it's worth $3.5 million to prevent the damage he would do
to Google if he worked at Facebook.

Not that he's worth 3.5M to Google per se, but that if he took his skills and
knowledge to FB in an area where Google is vulnerable, he could harm Google
far beyond that figure.

Say he was the top guy in targeting ads socially or locally at Google, for
example. What is it worth to prevent FB from getting a leg up?

~~~
mdwrigh2
I'd also argue that with all the major names leaving recently, you don't want
another major name leaving you and bringing the morale down. That alone might
be worth $3.5 million.

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thefool
It is possible for a person to have enough institutional knowledge and skills
that make them essentially irreplaceable (possibly someone that is a prominent
head of some team who holds enormous control over the future direction of a
product). It is the same rational for why CEO's routinely make such amounts of
money per year.

It's because the decisions that they make have far reaching consequences, and
if the CEO of a company is just a little better, it can snowball into a huge
return. It is possible that a person in a position of power could easily
represent a change in more than 3.5 million dollars in revenue in a year.

That said, from the personal perspective, I agree completely, no one could
possibly ever make better use of so much capital as compared to what it could
do when put towards some community venture. But in our system, this is
something that the person receiving the money must come to terms with.

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jerf
It seems like asking this question without ever nailing down what the author
means by "worth" is inviting fuzzy thinking. There are plenty of definitions
of "worth" whereby a single programmer may be worth 3.5 million, though it is
certainly a tall bar to leap. A programmer who is one of a small set of
programmers on a project that will make the company many, many millions and
whose leaving will at the very least cause an inevitable and significant delay
in the rollout may indeed be in a position to negotiate such a payout, but
it's an awfully narrow set of circumstances. (Even somebody twice as genius as
the first guy will require spin-up time.)

(Everyone's replaceable, but not equally, and not necessarily _quickly_.)

~~~
venkat01
I think a more important question than the definition of "worth" might be the
definition of "we".

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shiftb
I understand this completely because I'm one of those who undervalues
themselves. However, I'm quickly realizing that your value is not tied to your
abilities. Simply, you are worth as much as you think you are. The final value
is what you'll hold out for. If that's 10k, you're worth 10k. If it's 4mil,
you're worth 4mil.

Ultimately, it comes down to what you think of yourself.

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terryjsmith
Who's paying $500,000 for rock stars??

------
something
you are worth what someone will pay.

~~~
dedward
This - and it can't be emphasized enough. There is no such thing as absolute
worth.... you are worth precisely what people are willing to pay you for
combined with what you are willing to settle for.

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leppie
The $3.5m is restricted shares. No where does this say this is some kind of
salary or bonus.

Being restricted, probably prevent him from selling it except under certain
conditions (like company buy back).

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brudgers
Running the numbers:

Projected Facebook IPO value = $35,000,000,000

Facebook ownership offered to Engineer = 00.01%

Value of Facebook offer = $3,500,000

edit: Google counteroffer = $3,500,000

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jhrobert
I wish programming was an art and programmers considered artists.

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venkat01
What do you mean "we", white man?

