I like Ben's writing a lot but I think he's not very familiar with just how much better FAANG is in expectation value for your typical engineer - i.e. at current compensation levels it would be possible to achieve financial independence by 35 or 40 for somebody joining out of college. I don't think Ben has a particularly steep utility curve for money so working at a mission-driven startup is probably great for him, but the landscape out there has changed since he was last looking for work.
I'm surprised, is the salary that much bigger for FAANG in the USA? I know someone who's been approached by Google for a position in Paris, and the salary is not that great (around 110K€/year from what I heard for a Software Engineer position (more than 10 years of XP)). With that kind of salary, you can live well but you're not going to reach financial independence nor buying a house by the time you're 35/40.
I do know a lot of people making this or even much and they're not working at Google.
I was formerly confused by Google's compensation packages as well. I was focused on first year base salary and not aware of how raises, bonuses and stock packages play out.
My base salary has been higher than my classmates who joined FAANG since graduating ugrad. I jumped between non FAANG companies, they have been quite loyal. However,they are now clearly in a better financial position than myself.
1. FAANG compensates for institutional knowledge; engineers are rewarded for sticking around. my classmates that started at 100k USD 5 years ago, are now making ~175 base. They have gotten a 10% raise each year.
2. Performance bonuses. Not as common, for those who have a perf bonus the target is 15% of salary.
3. FAANG will give aggressive stock packages to engineers (which has real value from the get-go, unlike startup stock options) My classmates receive an annual stock package of 65-100% their salary.
This effectively bumps their 2018 compensation to between 225-300k USD. They are 5-6 years out of undergrad.
Historically, stock appreciation made a big difference too. (Google doubled in the last five years and quadrupled in the last ten.) Though you can't count on that going forward.
My understanding is that Google tries to pay towards the top of their local market, to get the best talent without diminishing returns. This means a lot of money in the Bay Area, but much less in, say, London, because the market for software engineers is so much weaker there.
(I work at Google, in Boston, but don't know details about how comp is figured)
Google pay is based on the market, not cost of living. So London is not nearly as good a place to be as the Bay, or even Pittsburgh (cheap housing, high programmer wages). I like how this works out with Boston pretty well!
Well, when you've been hearing stories about Googlers for 10 years, you don't imagine that you need "discipline" being a Googler to buy a house.
I may be a little bit naive, but when my friend talked me about it I thought he was going to announce something like 200K or more, because these are the stories we always hear around here.
In the end he decided to not go because he already made the same amount of money and didn't want to move his family to Paris just for two hundred bucks a month. But I don't know anything about bonuses and 10% raises everywhere, or at least he did not tell me.
$200k and up, for a Senior Software Engineer, is something that's only "frequent" in the U.S. (and varying a lot based on specific locations). With rentals costing many thousands of $ a month, significant healthcare costs, a need to have a car for each person, and no safety net.
If your friend is earning around €100k in France and not even living in Paris, then they're in a VERY privileged position. I'd say that €110k in Paris, factoring in exchange rates, CoL & taxes, can be the equivalent to a $200k salary in SV. So it's hardly a downgrade.
The sad part is that a couple decades ago, anyone in the middle class could buy a house, one income households included. Now, property values are out of whack, especially in or near any global metropolis.
google pays well only if they really want you. If you are part of the "pack", there is no need for them to pay you over market as there is an infinite amount of people drinking the google Koolaid that would love to work for them for under market salaries.
There are secondary benefits of working at a FAANG as well that translate to money over time, such as the halo effect on one's resume and the considerable education and training resources available internally at small or zero cost.
This is particularly true of people management. Small companies aren't set up to help people transition to people management whereas FAANGs have a proven track record of doing this successfully. This is why start ups end up with such shitty management. They throw long serving ICs into management roles without support and hope for the best.
Thanks! This is fair and useful criticism. I will update the post.
In the case of the particular person I originally wrote this for he wasn't looking at FAANG, and my impression is that most large companies are not competitive with them. In your experience, is that part still accurate?
I think household name internet companies that aren't FAANG per se will still offer competitive compensation and work life balance. I mean here places like Twitter, LinkedIn, Square etc. judging from my last job search and conversations with people in my network. Working at a large bank or non-tech f500 will probably be a different experience for an individual contributor.
I know there are some aggregators like comp.fyi if you want to take a closer look at some self-reported data.
