a) Many of us watched our classmates go into management consulting, investment banking, finance, medicine, law, etc. These are all fields where $250k is not exactly outlandish for a 29 year old.
b) We have a lot of friendly, accessible fellow posters who write computer code and are financially very successful.
c) We talk about $X million valuations and $YY million acquisitions and $Z billion IPOs the way catering company owners discuss the price of tomatoes.
d) We have heard many credible people complain of how difficult it is to hire and retain engineers. So difficult, in fact, that they'd pay $10k+ just for an introduction or $50k+ for an actual placement.
e) We understand incentive structures and equity grants exist.
f) We routinely read industry news like "Google and Facebook in heated war for talent", "The going rate for an acquisition-to-hire is $1 million per engineer", "Four large technology firms were engaged in a gentlemen's agreement to conspire against their employees until the government told them it was cartelicious", "Productivity per engineer is going through the roof", "Company Z supports Q00,000 paying customers per engineer", "Efforts of individual engineers have succeeded in adding millions to billions of dollars of value to some companies", etc etc etc, and generally seem to be at least as savvy as C-students in Microecon 101.
g) Talk of engineers receiving wages above some magic threshold is met with disbelief, scorn, and a wee bit of jealousy.
It isn't hugely interesting to me what any particular person at a particular company is making, but is $250k an outlandish total compensation number? No, it is clearly achievable. Do you have to be programming demigod to achieve it? No, compensation moves along with several different axes and programming ability isn't the main one. Is this anecdote a freak of nature which we'll never see again? No, signs point that this will become increasingly more common over time.
(d) in particular is worth stressing. There is no difficulty in attracting and retaining talent. There is simply an unwillingness to pay them what they're worth and give them an environment in which they'd want to work.
Supply and demand. It's pretty simple.
Yet so many (typically business types) want to treat engineers as an interchangeable cost center. "5 years ago an engineer cost $100k so I refuse to pay more than $100k now to keep my costs in check".
The fact that it's taken this long for engineers to be recognized (financially) for the huge impact we have and the vast differences that can exist between individual engineers speaks volumes about us. As a whole, we're just not as good as the business guys at this compensation game and, a lot of the time, it's not our primary motivation. Give us something interesting to do and stay out of our way and we're happy.
...erm, actually, students are remarkably goddamn insensitive to their future salaries when it comes to picking a major. And the other way S&D could equilibrate here is by fewer companies even trying to hire programmers because they know they can't afford them. What's really needed - considering the Camel Has Two Humps effect where some people have the magic programming gear and some people don't - is a mass effort to take students in journalism studies or, heck, smart unemployed adults, and administer some simple tests to see if they have large amounts of hidden programming talent, screw the college degree. But that effort would benefit lots of companies equally, and that means it's a commons problem. Not sure the Market Economics Fairy can easily solve this one.
Two years ago we appeared to have discovered an exciting and enigmatic new predictor of success in a first programming course. We now report that after six experiments, involving more than 500 students at six institutions in three countries, the predictive effect of our test has failed to live up to that early promise.
Also, assuming this were not the case, it's hardly clear that searching for magic programming gear is a commons problem. Why couldn't Google/Facebook administer the simple tests and keep the results secret?
I forgot, they already try to do this, but it doesn't give them enough applicants: http://www.mentalfloss.com/wp-content/uploads/2008/02/Google... http://www.facebook.com/careers/puzzles.php
Or why couldn't a trusted third party, like Microsoft, Cisco or Red had charge journalism majors/unemployed adults to take the test?
I forgot, they already try to do this, but they just don't do a very good job and their tests have little predictive power: https://learningnetwork.cisco.com/community/certifications/c... http://www.microsoft.com/learning/en/us/certification/mcse.a... http://www.redhat.com/certification/rhce/
My only point is that the problem isn't creation of a public good, the problem is that reliably identifying good people/good matches is really hard.
Smart companies already do things to skirt credentialized recruitment paths, because credentials (especially academic ones) are extremely inefficient, at least in software.
This isn't so much "insightful" as it is a basic obvious direct result of the law of supply and demand.
I helped them as much as I could but none of them are now programmers because it's just too much work for no return to learn this stuff. You have to be interested in it, and supply and demand doesn't make more people actually interested in it...
Let's put it this way: how many people who go into investment banking are actually interested in investment banking? How many fooled around with financial models in middle school, then realized they wanted to parlay that passion into a career at Goldman Sachs? Maybe the odd freakshow here and there, but by and large, people enter the field for the moolah.
Right now, programming is still dominated by people who became programmers because they enjoy it. That they're well compensated is nice, but many of these people would probably be programming even if it didn't pay handsomely.
The Market Economics Fairy would indicate, however, that that'll change eventually. More and more would-be business or marketing or even journalism majors are going to choose CS when the salary average disparity becomes wider and more widely known.
This is the huge fucking source of programming talent that has remained largely untapped ever since CompSci became a recognized standard for employment qualification, due to the "monkey see, monkey do" best practices effect in businesses across the US. That blind best practices urge in hiring processes, in fact, keeps many actual programmers unemployed while firms in need of programming talent lobby congress to make it easier to import talent from other countries to fill the void created by their own hiring practices.
It's a perverse market right now.
What engineers really need to do is to put more skin in the game. Push for more equity, even if it means accepting a smaller salary. All too often I see programmers who just want a 9-5 that pays 6 figures even if the company is seeing hard times, but that won't improve the situation. Most of those business types you mention see engineers in the same way that engineers see themselves: wanting a large, stable paycheck. The business types shoot for the large end of year bonuses, which in general only get paid if the company does well (ignore the TBTF banks for a moment)
As an example of what I mean, most celebrity endorsements are lump sum payments plus a very small variable upside. William Shatner, taking a longer view, pushed Priceline to compensate him (for his celebrity appearance) in the form of equity, and now he's laughing his way to the bank. In this case, he was willing to take the risk.
A lot of engineers I know are like this because they were badly burned earlier on in their careers with promises of equity (while working below-market paying job for that equity) that turned into dust (due to massive dilution and other factors) even when the company had a very successful exit.
One could argue there they only have themselves to blame for not being sure of the actual value of their position in all possible exit situations, but now you're arguing they shouldn't just be engineers but also financial/contract law experts, which is especially unrealistic when they are just getting out of school.
What other options are there?
Guaranteed end of year bonuses? Commissions in the form of profit sharing?
In major law firms, the associates aspire to become partners in the firm, which is analogous to my interpretation when saying "equity".
I'm not sure it would work, but if it did, it could be a perfect solution for keeping a great team together for the long haul.
It's a consulting company not a product company; it may be significantly different when "making partner" at a product company. However, from what I've heard, each partner at Accenture essentially runs his or her own business within the larger scale of the organization. Success is directly tied to the success of the internal mini-businesses. It is, however, an example of a company where IT professionals can become equity stakeholders in a private firm.
I imagine a product company would need to make the partners in charge of one product each (or maybe a couple of partners on one product) in order to avoid the "Too many cooks in the kitchen" problem.
Accounting and law firms may be a better example, though even they aren't as entrepreneurial as you think. They have their own regulations and internal politics.
Seems to be largely working within the specific space of Silicon Valley YCombinator-funded startups, but I'm not sure how well it scales. There's a pretty sharp filter for getting into YC, and for someone without access to PG's connections, the chance of hitting it big or getting acqhired may not be worth the risk they take.
I don't want an incentive scheme to help make you money. Pay me 20-25% of the revenue I generate for the company and give me a non-zero chance to be a stakeholder and I'll work my ass of for you.
At Andersen, at one point, I heard the number was $10M/yr of revenue.
It would be harder to figure out how much revenue is generated by an individual contributor (even if they are a superb coder).
Also, partnership usually involves leadership decisions
As for making partner in a BigLaw firm, folks I've talked to describe it as "a longshot" to "nearly impossible." A firm like Skadden will hire 500+ new associates a year (worldwide) and name maybe 4-6 partners, not all of whom started as associates. Unlikely the chance of going from associate to partner breaks 1%.
(Updated #s after asking someone who worked for Skadden.)
As for the chances of making partner, it depends heavily on the firm and the year. Skadden is something of an outlier. The other big NYC firms bring aboard about ~100-120 associates per year, and promote between 5-15 depending on the economy. The last few years it's been around 5 and during the boom it was around 15. At medium-sized firms outside NYC, the %-age is more like 20-35%, though profits-per-partner at those firms are more like $300-500k/year, versus $2m+ at Skadden.
 Though your numbers seem grossly exaggerated. Worldwide Skadden brought aboard ~200 this year, which was a big crop. The two years before that were ~100 put together. And over the last few years, the partners promoted counts have been: 2007 (29), 2008 (25), 2009 (8), 2010 (6), 2011 (8).
"though this is not as good as equity as there is still no real ownership incentive." <-- this was the largest complaint to the investment banks transforming from partnerships to corporations (in the former case, the partners were personally liable for losses)
"There's no shortage of smart, hardworking engineers. There's a shortage of smart, hardworking engineers willing to work for very little money." ~ David "Pardo" Keppel
If you're having trouble hiring, it's probably because you're not paying enough. It turns out that talented people are worth paying a lot for.
$250k developer salaries invalidates much of that pressure.
So yeah, I think a lot of people would be jealous if they thought they received a 100K offer from google while some other person received 250K.
HN has lots of readers. Most probably make less than $250K even though quite a number make more. Still, most of those who make less than $250K probably aren't venture capitalists.
A million dollar deal doesn't get anyone chiming in with "but my deals aren't million dollar" 'cause they don't have deals of any sort. $250K salaries, on the other hand, do get exactly that reaction.
Is there anything here that isn't screamingly obvious?
According to OED (oxford english dictionary):
"A word formed by blending sounds from two or more distinct words and combining their meanings. Also more generally: a term or phrase which encompasses two or more meanings."
(had to dig out a dictionary :/) According to OED (oxford english dictionary) a portmanteau is:
The key conditions here (each of which must be satisfied) are:
- constituents must be words
- blending sounds from the words
- combining meanings of the words
"blending sounds from two or more distinct words"
The word "brunch" is widely regarded to be a portmanteau, and does not consist of whole words.
This satisfies the 3 conditions:
"brunch" is a combination of "breakfast" and "lunch"
the beginning sounds like "breakfast" and the end sounds like "lunch"
-Constituents must be words
"cartelicious" is a combination of "cartel" and "delicious"
-Blending sounds from the words
the beginning sounds like "cartel" and the end sounds like "delicious"
-Combining meanings of the words
It's delicious cartel action, for repugnant values of delicious. I don't think this one is a strict requirement, in any case. This is getting a bit too pedantic.
Let's all agree that, before saying something like "a portmanteau, if you want to get technical", you are 100% sure that it is correct. Maybe that should be in the HN guidelines ...
I only brought up this issue because technically it's not a portmanteau (at least according to how OED and a bunch of other dictionaries define the word), and probably wouldn't have made a remark if the phrase "if you want to get technical" wasn't used ...
I lay down my guns ... now
If we believe the miscellaneous crowdsourcers of Urban Dictionary it comes to us by way of Beyoncé's coinage "bootylicious", which makes it pretty obvious that it derives from "delicious".
I'm amused by this part:
Parents and middle-aged talk show hosts often use this to parody the ghetto culture, much as they latched onto the suffix "izzle".
I do believe the Urban Dictionary has just called me a clueless white talk-show host! Oh well, if the shoe fits... ;)
You get a cash bonus each year that's around 15% of your base, but if you're a superstar it can be double that, or if you're a total disappointment, it can be nothing. But if I perform as expected, that's another $22k.
Finally, I was granted 300 shares of stock that vest annually over four years. So each year, I get 75x the value of a Google share. GOOG is trading around $600, so that's another $45k.
So my total annual compensation this year will be $217k. If I were bragging to an ex-employer, I'd probably round up to "a quarter million" too. :)
I'm also an under-30 engineer making ~250k in the Bay Area (at a publicly-traded gaming company, not at Google). My company has six pay grades for pure engineers; I'm at the second highest. My 2011 comp breaks down as follows:
* 166k base
* 45k bonus
* 35k stock grants (RSUs)
Note this does not include 401k matching, stock purchase plan, healthcare, or any other quantifiable perks.
When I took this job a year ago, I had a similar offer from a prominent NYC startup: ~220k (150k base, 30k bonus, 250k options over 4 years using offer-time valuation). I was 26 at the time.
For added context, I did not attend an elite school. I did not complete my undergraduate degree. I'm smart, but not extraordinarily so (800/710 math/verbal SAT). I interview well. I have a "disruptive" skill (cloud expertise).
Any tips or techniques outside of the standard behavioral based interviewing techniques (like STAR)?
Also, I suspect you may be underselling yourself here, you very well may have excellent communication skills (like presenting complex ideas clearly to senior management) or even just social acumen.
There are certainly brilliant folks around in the valley, who can grasp concepts faster and more deeply than seems human, but they are a significant minority.
The prime requisites for success as an employee in the valley are still:
1) Good judgement (which tends to come from accurate self-reflection and critique)
2) Love of learning (so it takes you a couple hours or even days to grok redis's failure modes instead of 20 minutes, who cares -- the question is are you going to learn it (and every other useful thing that comes along, for years))
3) Basic sociability (the valley is a small world, everyone knows each other, if you are a jerk life will get more difficult).
For a much more eloquent description of how to thrive as a programmery type in the valley, consider http://www.cs.virginia.edu/~robins/YouAndYourResearch.html but translate research into "generally useful skills for building stuff."
"You and Your Generally Useful Skills for Building Stuff." :-)
Once you get to a high enough intelligence that you can understand what the people around you are telling you and follow their train of thought, intelligence really doesn't matter all that much. Other characteristics like perseverance, social & communication skills, and emotional stability become dominant. There's nothing "magical" about getting an 800 SAT-M (or working at Google, for that matter), it's just that the effect of having a large body of knowledge that we spent thousands of hours acquiring to draw upon.
Just look at the normal distribution of IQ scores: http://en.wikipedia.org/wiki/File:IQ_curve.svg
Sure, a lot of people are in the 120+ range on Hacker News, at top management consulting companies etc. but if you are 110+ IQ you are probably smart enough to do almost any job on the planet.
I'm not a programmer, but I imagine that like business, there are plenty of terrible programmers with 140 IQs that believe they are entitled to not working hard or being good with people.
They will always make less and even their high IQ will not allow them to figure it out.
(also, a perfect math score in the sat isn't impossibly hard - the level of mathematics is probably lower than your last school exam. it just takes a lot of practice to do that many questions fast and accurately.)
If you haven't seen the SAT math, it is a slightly creative twist on 10th grade math (Algebra and Geometry). Scoring an 800 means you could get an A grade in high school math, and are not so slow at solving the problems, and are careful enough to avoid sloppy mistakes in your work.
"120" IQ is supposedly 2 standard-deviations above the "(human?) population mean", which is ~98%ile of the population, which is well within the margin of error of these sorts of measurements.
I'm looking for a new job, and strangely, Google's base is about 10% lower than the base from my other offers (Apple, Facebook, Zynga, LinkedIn), rather than 10% higher.
Also, to add my own datapoint: I'm four years out from undergrad at an elite school, and Google offered me $120k base and 500 stock units over four years. My recruiter said that given the way annual bonuses work (15% bonus if you perform average, all the way up to 15% * 3.5 = 52.5% if you're extraordinary), I should haven't have much trouble getting about a 30%-35% bonus. So my expected annual salary from base, stock, and bonuses is about $120k + 125 stock units * $600 (which is what Google is currently trading at) + 30% * $120k = $231,000.
If I'd joined Google right out of school, I expect this would be even higher, since I would have received the 10% raise last year (and also, I've made a series of poor career decisions to join no-name startups that I think have kept my current base salary lower than normal and made me a little less desirable). Pure speculation, though.
I assume they give out RSU more than cash because it's a better-aligned incentive (both in motivations and risk profile), and it makes your x% raise cheaper next year.
I've had offers from other shops in the same just-over-200k ballpark, and I know peers at google pulling in around the same. I don't doubt 250k for a second.
You're not applying to visa-friendly startups in Silicon Valley right now. :)
That last part about "a quarter million" made me crack up. Awesome stuff!
Now, down votes, come to me.
The first thing I'll say is this: people lie about their incomes. They even do this anonymously (Glassdoor, etc). Not that I'm calling (or even suggesting) this a lie but be very careful believing anyone's salary claims unless they show you an original offer letter, employment contract or a W-2.
I'm not even sure if they're simply bad at math, lying to themselves or lying to others. Whatever the case, they lie.
With respect to Glassdoor and similar sites, another problem is different people have different ideas of what "salary" means. Does it include stock? Actual bonuses? Expected bonuses?
Likewise it's a skewed sample. I kinda have my doubts that many principal/distinguished engineers have the inclination to accurately report their incomes on such sites.
That being said, my experience in the outside world is that your salary quickly tops out as a senior engineer, architect, whatever. The only way to increase it is to move into management.
While you can move into management at Google, you can go very far (in terms of career and compensation) being simply an engineer if you're good at what you do, get things done and have a lot of impact.
This compensation can take many forms (vested stock, base salary, annual and periodic bonuses, etc).
Also, Google realizes that after you've been here awhile you become increasingly valuable. This is true for an engineer no matter where you work. The cost to a company of replacing someone who has worked there for years is huge (both in recruitment costs and getting them up to speed). Google is simply the only company I personally have worked for that seems to both recognize this and build it into the compensation system.
This really is a great place to work. That alone attracts and retains an awful lot of people. You can also get to work on some very large problems and systems (another draw card). The fact that Google does (or can) pay you very well is just icing on the cake.
This isn't to say that Google doesn't have partnerships with external vendors. We do. But engineering in general is a core competency, something far too valuable and of strategic importance to outsource.
Most of the comments in this thread are similarly ambiguous. If you post a comment, please be clear about whether you're talking about base or total compensation!
In Portugal, it depends: if you are on a contract then it's after tax, if you are not on a contract (think consultant) it's before tax. This happens because most people have no idea that the other side receives only the net wage and vice-versa.
edit: to answer your question, the 250k is before tax.
EDIT: Actually I see what you mean. In the above scenario I would never tell a friend I make 3K but during salary discussions and in writing I guess you would quote the Brut.
what makes it a bit more complicated too (not complete, i am sure there are other reasons as well):
we get paid at least 14 times a year, where the non-monthly payouts have a completely different taxing. my father working for a bank gets paid 16 times a year plus a bonus once or twice a year.
also, once you have paid a certain amount for your social security, you don't pay it at all anymore, skewing your net wage.
it might be that the employer miscalculated your net wage and you might have to pay the IRS at the end of the year (or if you are lucky, you get money back)
The position above, Senior Engineer, averages $130k.
There doesn't seem to be an incentive for 1,500 people to understate their earnings by 50%+ on an anonymous poll, especially a poll of engineers at one of those most engineering-centric companies in the world, where corrupting a dataset would likely feel akin to high treason.
Not inclined to trust second-hand information from one individual - sounds like they're either working at a much higher level than regular programmer, inflating their salary by including perks/stock/etc to make it seem higher, an extreme outlier, or just lying (people who tell their friends how much they earn in casual conversations also sound like the kind of people who would inflate that number).
Stock would be hard anyway because they vest over N years so how much you vest in a given year depends on a) your promotion velocity b) whether you got any gold stars/special bonus grants and c) how you ranked within your peer group.
At the same time I had people working for me who had 10 times as many options, but had been in the company for ages and received the vast majority of those options before the crash in 2000. As of this year, the couple of those people who are still at Yahoo will have options worth maybe $30k-50k total from 10+ years of employment that are over water, and their older options will start expiring soon.
Of course Google people receiving new Google options now are currently in a better position, but estimating the value of options grants over time is tricky.
The theme is that Google has upped compensation in the past 12-18 months in order to retain top talent, with a lot of cash bonuses and base salary increases since competing against Facebook stock options with Google stock options isn't a fair fight any more.
Edit: apparently they also don't like developers talking to each other about this (although team bonuses are highlighted within the company), since they don't want developers interviewing with Facebook or another co. just for the purpose of getting some cash out of Google.
My programmer friends at hedge funds (all between 22 and 26) are averaging 500K salary with 100K bonuses (note: as a programmer, base is much higher but bonus is lower). So if google isn't paying those types of numbers to people, then money cannot be the only factor at play.
To add a generalization, my rule of thumb is the variable part of compensation varies most for the domain experts. So in technology for the sake of technology style companies like Google, total comp shoots up based on stock/bonuses. In reality, Google is an advertising company so presumably the ad sales folks bringing in whales aren't hurting either. Naturally numbers get skewed by overpaying to keep certain people (i.e. overshoot on retention packages), and given large scale, there are always some overpaid due to lucky timing/placing. Such is life! In hedge funds, the traders get the big bonuses, but the programmers get a solid salary so lower bonuses don't hurt quite so much. Luck also plays a part for those folks var comp. For those in hft, I'm aware of a few places where given the right mix of skills, someone who likes to think of themselves as a programmer can get the trader style bonuses.
 i don't mean that in a dismissive sense - i work there and it's the best job i've ever had, but the work is not qualitatively different from what you'd do in other software-focused companies. hedge funds are not software-focused.
Many people, even at Google, will be writing coding that isn't The Product. Having spoken to people at such firms, and their competitors, there are plenty of dev jobs there that sound boring as all hell, alongside the fun ones.
Pushing money around does sound boring, just like "pushing web pages around" or "pushing 140 char messages around". yawn ;-) In the last 12 months I've worked on custom languages/compilers, custom databases, kernel hacking, oddball processors, little visualization hacks, and have a giant stack of as yet unreleased hardware piled up to experiment with. I get to program against millions of events per second with minimal latency, giant result data sets for batch work, and points on the spectrum in between. The data itself is finance related and it's fun to munge and experiment with trading algorithms on it.
So far I have, over time, swung between product companies and trading companies. Fun to be had on both sides, among many other places. Actually, one of the more surprising things I've learned over time is how little most programmers realize about the variety of fun things out there. And how conservative and fad following most programmers are, funnily enough.
I'm not naive about that - large companies have their own agendas. But someone working at a silicon valley firm still has a better chance of doing something meaningful than someone working at a hedge fund where the answer is pretty much "no" by the nature of the business.
Is it "meaningful" to spend my days figuring out ways to get more people to click on more adverts? Not really. Build a social network for dogs' left testicles? Not really. Squeeze another dollar out of the equity markets? Not really. Build a faster database? Build a web analytics tool so people can squeeze out a few more conversions? Take a few cycles out of a market data feed handler to lower latency for a trading algorithm? No, no, and nope.
Are there good side effects from the above? Sure, we can come up with examples. For finance, you can take a look at the tightening of spreads (e.g. hft tends to make spreads go to their minimum making trades cheaper for everyone). Or adding liquidity in regular conditions so when someone small like a retail user comes along to sell some stock they get a good price quickly (not always of course, I mean really, you expect smart teams to take obviously dumb trades in an illiquid market?). Or more rapid price discovery (i.e. if something is mispriced it tends to get arb'ed away pretty rapidly, so that is faster info dissemination).
Can it be fun? Sure. Is it more good for the world than bad? Yup, I think so. Is it /meaningful/? Is it bollocks.
None of the above is meaningful compared to other things in my life. Important things like my family and trying to leave the world a better place than I found it (e.g. I give to charity -- probably more than most will ever earn).
That, and I'm with Vonnegut. "We are here on Earth to fart around. Don't let anybody tell you any different.".
tl;dr no more or less than other silicon valley jobs I've had, but then again, I don't expect it to compare to the important stuff in life.
To be a quantdev or quant, an MFE is far more useful than an MBA.
I work for Cisco, which is certainly not considered a Google or Amazon, these days, but still a fairly respectable place. I'm a software engineering doing embedded work for the last three years out of my BS in CS. I got hired on at $73k with 300 options (now underwater).
I have had consistently good reviews, though only given one promotion and one raise - with a whopping $79.5k in salary afterwards. A bonus is typically 6%, though this year I've got the highest rating possible, so I had a 12% bonus. I've been given RSUs once, at a value of about $10k, though the stock price dropped and they are sitting at around $5000 now.
So, my yearly compensation is about $90k or so, though they've jacked up our medical costs, taken away free drinks, raise prices in our cafeteria, taken away the home broadband reimbursment, etc etc since I've been here.
So, Anyone need an embedded engineer with a network security focus?
The average for "good" developers at Google might have shot up recently.
It was a really had choice to turn them down to start my own company, but I figure that being my own boss had some value, and being able to create something that was completely my own vision was more enticing. However, at the same time it gave me some confidence that if my startup didn't go according to plan, I did have a decent fallback.
Let's be realistic a minute, $ 250k/year is a lot of money.
You can't take simple things for granted in the Bay Area. Want to raise a family of four and actually have three or four bedrooms, you're looking at a million+ dollar house.
250K is what you should be shooting for if you have goals such as these.
>The revenue per employee at GOOG is $1.2M in a very high margin business.
$250k/year is not a lot compared to that.
During a boom time, wages rise. Wages are "sticky", meaning they lag behind the current state of the economy. Wages for programmers have really gone out the roof in the last few years due to lack of US computer science graduates, stingy visa provisions, etc.
In a few months, the funding wave will start to level off and dip, but wages will still be as high as ever. That's the crunch. Winter is coming.
EDIT: Think about it this way: in 2009, a 1M seed got you 10 engineers for a year. Now it gets you 6, maybe 7. Ouch.
In 2009 servers were more expensive, and programmers handling your cloud were both less experienced AND had inferior tools. There is a small funding glut, but 7 vs 10 isn't a fair compensation. It's more like 7 people that work 20% more effectively, so 8.4 vs 10.
The revenue per employee at GOOG is $1.2M in a very high margin business. That means some of their best developers, the guys whose products generate all the revenue, take home only 20% of the pie. In finance, this would be laughable.
Corporate America baffles me sometimes.
There's also an oversupply of labour in the city though.
I've casually heard that Google and Facebook have driven the starting salary for Bay Area developers up above $150k/yr for college kids with no experience.
I'm a talented 25 year-old web developer who jumped from contracting to full time a year ago. I received a $110k/yr (not eligible for bonus) offer. The people I asked at the time said it was a competitive salary and not worth negotiating.
Now I'm wondering if it's time to move on. I see boxes in on job applications for "expected annual salary" and I don't know what to put. I know the money you save when you're young is what allows you to retire/start a company/etc., and want to make sure I'm being paid competitively. At the same time, I don't want to misread the market and come across as out-of-touch on one of these apps.
Guys, what's the going rate for a talented front-end web developer in the Bay Area about 4 years out of school?
"Negotiable", "Market rate", etc. That box is asking you to compromise your negotiating position. There is no legal or moral stricture that says you have to oblige them.
The people I asked at the time said it was a competitive salary and not worth negotiating.
This makes me angry. Of course it is worth negotiating. What would have happened if you had said "That is an interesting number. How would you feel about $115k?" Answer: in all probability, you'd be a couple thousand dollars richer now for three minutes of work, the worst possible outcome would have been accepting the offer at $110k, and nobody at your company would care either way because the difference is bat guano to them.
That's a pretty unimaginative worst possible offer. The company could pay you 115k, resent it, and use it as justification to give you various shit-work. I've seen that happen to a friend and it actually hurt his mid term learning and career growth.
It's also fairly common for a company to simply choose to fill the position with someone who's less troublesome.
If you have an exceptional value to offer a company then, you have significant room for negotiation. If your skill is a common commodity, you likely won't.
The worst case scenario is that you accept their first offer and don't find out until you've spent a year and a half of your life working there that the company isn't worth working for. That is the worst case.
The "worst case" you put forward is still far from convincing. In work, black swans are generally positive. If a typical job has a value of x, most will be between .8x and 1.2x, but a few will be 10x or even 100x. Outside the military, where death is on the line, -100x jobs are very, very rare compared to +100x jobs.
Wasting a year and a half in a ho-hum environment is not as big a price as missing a once in a lifetime opportunity due to over negotiation. In the opposite vein, the amazing opportunities often come at a reduced salary. How much less would Warren Buffet be worth today if he'd tried to negotiate a higher salary with Benjamin Graham instead of doing the exact opposite?
If your employer treats you more poorly because you negotiate a better comp package, you shouldn't be working for them; they are a bad employer.
If negotiation costs you a "once in a lifetime" opportunity, the opportunity is "once in a lifetime" in the "boiler room pump and dump" sense, or the "late night infomercial" sense. A year of your life, however, is priceless.
Your previous comment was only four sentences, one of which was an exhortation to read the previous sentence twice! I'm sure your implication wasn't intentional, but I find the suggestion that you aren't speaking simply enough for me to understand your reasoning offensive.
It's not that your explanation was too complex. I just don't agree with it.
It's rational to demand more from someone who you pay more. If one employee of a certain job-title asks more money than his/her colleagues who have equivalent skills, then expecting that person to handle more work or less desirable work that comes to the team is rational. It may not be optimal in every case, but it certainly doesn't make the manager's entire company "a bad employer".
There are many good opportunities in life that can come from not being maximally greedy. Some are once in a life time, some are more commonplace. One need only read biographies to find examples.
If, for your $5,000 pay bump†, the company decides they'd like you to be closing 35% more bugs than every other employer in your pay band, they can demand that in the negotiation. You can then make a decision about whether or not the bump is worth the concession. If it isn't, you can decline the job, or you can negotiate the concession, or you can decide to accept the previous offer.
It is (word chosen carefully:) alarming how bad engineers are at negotiation. Beliefs like yours (aggressive negotiation entitles an employer to maltreat employees later on down the line) are alarmingly common. They're simply not true.
The detail-shackled brains of nerds†† seem unable to get past something here: no matter what employers say the feel about negotiations, surely they can register the tenor of the negotiation in the back of their heads, and then ratchet their expectations appropriately. Surely, nerd engineers think, that must occasionally happen. Answer: yes, it does happen. AT BAD EMPLOYERS. Good employers understand how salary negotiations work and allow for it. The best employers even account for how bad engineers are at negotiations and go out of their way to help educate candidates (Fog Creek, for instance, once said they often "top up" the best offers some candidates receive --- that should function as a big red flashing light to those people that they didn't negotiate well enough).
I am not telling you that employers won't do irrational things if you negotiate hard with them. I'm telling you that if they do, you should run run run away fast, because that's the canary in the coalmine. Those employers are also going to dilute the shit out of you, call you in to work on weekdays, swap your tolerable manager out with some douchebag they hire from a BigCo to increase productivity, lock you into a regimented COLA-based incentive comp plan, slash your health care benefits 8 months down the road, and never ever improve the hardware you're issued.
Don't believe me? Think of it this way: the best engineers are disproportionately likely to negotiate aggressively. Employers that get vindictive about negotiation don't get to hire those people. Why are you interested in working at an employer that shuns the best talent?
(Hiring manager, one of many at my company, speaking here.)
There. You got a prolix response from me. Happy? :)
† (about which Patrick is right: its a rounding error, and it's the kind of rounding error that --- unlike, say, a better- but- out- of- spec laptop, which might incur a huge companywide "new laptops for everyone" shitstorm --- is particularly easy to concede to a new hire.)
†† (see my about:)
The go-to person for the hardest problems (who you generally want to be) is usually not chosen by the person who controls you comp, but in either case it's reflective of your title, not your salary, right?
Some errors in my previous comments:
I meant "call you in on weekends", not "weekdays", and I meant "at your performance review", not "at your employment review".
I really can't speak for engineers, since my experience as an employer wasn't at a tech company. I've been an owner of a painting business and a school. In my experience, I the correlation with the aggressive negotiating and job dedication skewed the other way from yours. In a pinch, particularly at the school, a forceful negotiator could extract higher pay (aka a raise) from me, but afterwards I had very little compunctions with pushing right back or firing if necessary. Less you think I was a terrible employer, I did pay employees between 30% and 80% over the market norms. It's just that employee loyalty is particularly important in that market (children's education), and creating an environment in which negotiation is the norm would have been creating a drain on both time and morale.
Now that I'm entering the tech industry, I suppose it could be an entirely different world. There is a limit to what I'll put up with, but for now my focus is on creating value, not extracting it. That said, I'll definitely keep your comments in the back of my mind next time I have a good opportunity to discuss pay.
I doubt it can be a once in a lifetime type of company if they would not hire you over a requested 4½% pay increase. If they play hardball over the requested raise, then you should accept the $110k offer.
So if that starts happening to you, you get out. And when the next place asks you how much you made at your last position you're $5k better off in the negotiations.
>It's also fairly common for a company to simply choose to fill the position with someone who's less troublesome.
Do you really want to win a race to the bottom? It seems like you have a terrible attitude (fear-based) about negotiation. I wish people who thought like you do would stay out of my field. You're pushing rates down needlessly.
I know a couple of people running brick-and-mortar shops (think: selling furniture etc), or lawyers, or other professions that earn just as much too.
These are 2011 numbers, personally researched.
She is now being passed up by people visiting her team's cube to ask about things regarding the service. Their default response is to go ask the guys in the cube instead.
"Welcome to my world", I said.
One of the things I notice is that the satisfaction levels of men and women I know working at google, even normalizing for skill level, is vastly different.
You don't sound particularly happy; why are you still there? my impression is that there are other places with cultures that are better at least in that regard.
Seriously, ask any woman who's still left in SRE about the Mission Control jackets in 2008-9. There was an impressive post-mortem written about it earlier this year right before I left.
Headquarters in Silicon Valley, development somewhere else might be a good strategy if you want to keep the burn rate under control.
Any thoughts on this? Can a small startup compete with the Googles and Apples in the Valley?
If you have reasonable financial discipline, 5 years of $250,000 can easily build yourself a war chest of a few years living expenses: the perfect co-founder.
They can and do!
I worked for many years at a company that paid significantly higher than average salaries. Even with a program to cut the bottom 10% per year, we had quite a few people who were mediocre at best.
It's easier for a busy manager to hold onto the people they have than to hire and train new ones. Paying high salaries is an easy way to do that if you have the cash.
But it all makes me wonder how good Google's internal processes are, and how long it's willing to wait for people to become productive.
No you can't. I really hate this kind of attitude people have. A person is not a static thing that is always X. Maybe they didn't like your company. Maybe they were suffering from burn-out, or had some kind of personal crisis. It could very well be the case that they're absolute rock stars at Google even though they were worthless at your company.
Of course there are and what I'm saying is that this isn't a static group. People will move in and out of it. I'm sure there is a very small percentage who stay at the bottom just as their is a very small percentage who stay at the top. But the bulk programmers are moving between these different groups through-out their careers.
>and the idea everyone has the potential to be a great programmer just isn't borne out by that experience.
What experience? You don't have any idea what's happened to the "no hopers" you've known in your career. I agree that some people seem like they're not going to get it, but who knows? Maybe they'll meet someone who flips a switch for them.
Why is this even on HN, let alone #1?
In the contrast: you don't have to start your company in the Valley to be good and maybe it can save you a lot of headaches and money to not do so.
But at the end the source of this problem is different: the Valley just needs more engineers to get things rolling.
I'm really curious about how far this game will go.
Maybe it is because a large number of HN'ers are currently gainfully employed in the valley and that figures like these can come in extremely handy when interviewing with any company there especially if that company is google.
Datapoints like these are few and far between, sure people lie routinely about their salary but by now I think this thread has given more than enough corroboration to take the original statements by my friend as truthful.
It also nicely showcases that places like glassdoor.com show base salary only but that the total compensation can be much higher, which should factor into any decisions you make with respect to working for big company 'x' (or G in this case) versus running your own thing.
Professional salaries are a function of both objective factors (supply and demand), and subjective factors. Engineers have long had a disadvantage on the subjective side because it is difficult to quantize their contribution to the revenue of the company. Hopefully signs like this mean the perceptions are changing.
Like it or not, the Valley needs to pay more to attract top people. If you're a science/engineering major at a top school at the top of your class, how much would you be willing to give up to go into engineering? Prior to these recent salary spikes, you were looking at making $30k less to start versus finance, growing to $300k-$400k less by 30. It takes a lot of love and dedication to turn that down for what is at the end of the day just a another job.
Being the stupidest person among your peers is probably the best things you can do for yourself if you want to learn. Who better to learn from than a bunch of brilliant people!
Because I don't compete with Google for talent, I, nor anyone I know, pays engineers anywhere near $250k/year. Personally, I believe Google pays that much because they have to just to keep people from jumping ship.
If you're an academic, I believe Google may be the perfect place. Your meals are provided, there is always something intellectually interesting to research and the stress level is quite low. The fact is, nothing you do as an individual is going to make or break a $30B/year company and that has its pluses and minuses.
Luckily for me and other startup founders, there are a whole lot of talented engineers out there that don't find the slow, calm, quiet life particularly appealing.
My advice: Do this work because you love it. But negotiate aggressively. Programmers don't push as hard as other types of employees, there's no real cost to pushing on compensation, just don't be a jerk about it. Read books, blogs, etc on compensation negotiating tactics.
Bottom line: This compensation will not last and plans are already in the works to put an end to it. I will bet money that 2-3 years from now people will be wailing about the drop in programmer comp.
Like the collusion big companies were already doing and got busted for? It's going to get harder and harder to distort the markets with instant communication. If anything is going to come to an end it's probably going to be the absolutely ridiculous overpay that executives have been enjoying for the last 20 years+.
My personal prediction is that programmers will continue to be in demand over the next decade, as demographics (shrinking workforce) collide with a growing economy, and the businesses that are currently disruptive become mainstream. That's my weakly held hypothesis at least...
It doesn't seem uncommon for very young (25+) top engineers in the Bay Area to be making anywhere from $175k/year -- 250k/year in base salary + bonus + equity. Over 30 years, that's a more or less guaranteed $5m -- 7.5m before taxes from a single income. (Ignoring things like promotions and older engineers possibly needing to retrain.)
If you're not an early employee at the next Google, or a co-founder of a to-be-talent-acquired company, is it likely at all that you will beat those numbers at a string of startups? And if you do beat those numbers at a startup, is it because you're basically doing the same work you would be doing at Google anyway, likely ads or infrastructure?
It's very uncommon. Less than 1%, for sure. The other 99% don't make headlines on HN.
I just wouldn't figure the stock grant/options for any value at all. The odds are strongly against them being worth anything.
did you really mean "takes home" as in, $250k after taxes and social security?
Suppose the actual salary is $130k and 30% (at least that's what I heard bonus): that already brings his salary up to $169k.
Now add RSUs: over the last five years, the average price had been ~$500/share. He will only need an RSU grant of ~650 RSUs (which sounds reasonable, especially if it was granted in 2008/2009 when the stock price was lower) to be at $250k total compensation. It could also be the case that his base is higher, but he is only getting 15%-20% bonus, or didn't get as many RSUs: there are many ways in which $250k is a believable figure.
Given the near certainty of Facebook's IPOs, what other private companies are trading at on Sharespost and SecondMarket, as well as valuations/prices of recently/upcoming technology IPOs, his total compensation is actually somewhat below what he could earn elsewhere.
Of course nobody working at Google (or Facebook, or any other serious technology company for that matter) is it in purely for the money: otherwise they simply wouldn't have be at the level of proficiency needed to be hired at such companies. Taking a route optimized for maximizing _current_ income is not the same as taking a route optimized for learning. _That_ is the reason engineers will always leave Google and join startups (much like Engineers left DEC/Sun/Yahoo/etc... to join Google), provided the startups are solving interesting technical problems. Unfortunately, right now there's a dearth of that.
Corollary: you'll never lure a Google-caliber engineer into an actual startup (as opposed to a "certain pay off" pre-IPO company) with talk of compensation. When I hear companies complaining about how difficult is it to hire "because" of Google/Facebook/Twitter/LinkedIn hiring all the engineers, they're almost always startups that are _not_ building interesting technology.
Another relevant point: there is no pressure for a software engineer to live a $250,000 lifestyle. An enterprise sales engineer I know once purchased a used BMW 540i. That seemed pointless to me: you can get better acceleration and handling in in a Japanese car, if really want a BMW you could get a new 3-series (getting better handling and acceleration than a 5-series, along with free maintenance for 50,000 miles). If you don't care for performance, you easily spend 1/3 as much money on a Honda Civic or Accord. However, his explanation made a lot of sense: he frequently needs to take clients out and an executive class car certainly makes an impression that can close a sale. I'd imagine the same goes for lawyers, management consultants and the like. A software engineer can easily live on $40,000 a year and save/invest the rest (for either a startup, early retirement or purchasing what he/she truly dreams of e.g., a Porsche 911 Turbo if they're really into performance cars).
Do (not yet profitable) startups do the same? From what I've heard, most don't offer bonuses in the form of options and stock grants, but this seems kind of weird to me. I can understand not offering cash bonuses if they're not yet profitable, but it seems like if I do a great job, I should get extra stock (since otherwise, basically the amount of stock I ever get is purely determined from my status when I joined, which could be much different from my status four years later).
Is that let's-pay-them-enough-not-to-leave-for-Facebook-even-if-they-don't-do-much strategy still on?
"The Dunning–Kruger effect is a cognitive bias in which ... the highly skilled underrate their own abilities, suffering from illusory inferiority."
Joe Shlub is not going to get this. But I've worked with very good developers (e.g., guys at Apple who were instrumental in making whizzy stuff happen in the Mac's graphics stack) who are worth this, and more.
Besides, the last thing you'd want to do is to work after-hours and find out your employer is owning the IP of your project (that's besides pager-duty and other after-hour things your employer might make mandatory anyway).
Regarding taking twice as long, just imagine projects like Dropbox or Twitter taking twice as long to get to the market - I doubt they would be competitive in the same manner.
That's a lot of things for Google these days, though. Not just search engines, but also: local search, video streaming, webmail, contextual advertising, maps, route planning, social networking, flight search, RSS aggregation, collaborative document editing, machine translation, VOIP, web browsers, mobile operating systems, app stores, programming languages/compilers/VMs, web frameworks, cloud-computing services, etc., etc.
But that doesn't mean that they're obligated to keep sending you a paycheck, either. California is an at-will employment state, and violating your employment contract tends to remove the "will" to employ you.
Has this ever happened? I would imagine that if some guy got his FU money taken away and given to some big company where it would be too small to even register on the income statements that said person wouldn't just lay there and take it.
After all, what you're describing is literally slavery (i.e. anything the slave makes belongs to his/her owner).
Ignoring the PR problem, if they sued one of their engineers over, say, an iPhone racing game, a sane judge is going to make them work pretty damn hard to demonstrate that it has any relation to their business.