tech engineer compensation

[ocean view]

I’m going to call BS on the stock grant portion of this person’s claims. Facebook IPO’d in 2012. They posted this story in 2020, claiming 10 years of employment. So for the first 2 years they were given pre-ipo options. While his option price would have been set at grant date, I don’t think the company can place a value on them because at that point it’s a wing and a prayer if they ever get to the point of IPO.

The hire-on base salary seems at bit high for 2010, but FB may have been trying to poach from google and others so perhaps offered more. The bonus numbers don’t seem unreasonable in the first few years (I didn’t read the whole thing). I don’t know what they mean by “refresher”. I worked in Silicon Valley my entire career. I regularly saw compensation/stock income for all employees in the company and “refresher” is not a term was ever used by Finance or HR. Anyone familiar with this term?

 

[bonvoyage]

Apparently not for HW engineers... and definitely not for engineers outside of FAANG...

I've been a HW engineer in Silicon Valley since 2000... 20+ years of working and being very successful and my salary isn't even near the year 1 salary on that table... serves me right to scoff at SW engineering as being "too easy" back in the 90's and decided to pursue HW engineering as a challenge to myself... This was before the explosion of the web and smart phones. I was also never brave enough to walk away and start over with a SW career... Oh well..

I worked in machine learning related development in the NY City area until I retired at the end of last year. I was being paid several hundred thousand as base salary and this was not in an FAANG.

It was mostly luck that I started working in machine learning thirty years ago. It was a sleepy little backwater field back then. I used to get blank looks when I said that I worked with neural networks. At least one person thought I worked in biology! Things really picked up after about 2010 and had a good ten years ride.

All this for knowing a bit of calculus and linear algebra

 

[TheHobbit]

I’m going to call BS on the stock grant portion of this person’s claims. Facebook IPO’d in 2012. They posted this story in 2020, claiming 10 years of employment. So for the first 2 years they were given pre-ipo options. While his option price would have been set at grant date, I don’t think the company can place a value on them because at that point it’s a wing and a prayer if they ever get to the point of IPO.

The hire-on base salary seems at bit high for 2010, but FB may have been trying to poach from google and others so perhaps offered more. The bonus numbers don’t seem unreasonable in the first few years (I didn’t read the whole thing). I don’t know what they mean by “refresher”. I worked in Silicon Valley my entire career. I regularly saw compensation/stock income for all employees in the company and “refresher” is not a term was ever used by Finance or HR. Anyone familiar with this term?

I was hired pre-IPO at a FAANG, they absolutely give you a price on pre-IPO RSUs. And they are RSUs not options... even a decade ago. The price is based on a number of factors including secondary markets and the last round of capital raising. Same goes with pre-IPO refreshers.

None of his numbers are unrealistic if you are demonstrably and consistently the best of the best. Most folks however, just aren’t, so they are going to seem way off from the refresher grants they are getting (which are still fantastic). To make these really big numbers you need to be getting grants over and above refreshers which are awarded on a case by case basis.

 

[MichaelB]

I’m going to call BS on the stock grant portion of this person’s claims. Facebook IPO’d in 2012. They posted this story in 2020, claiming 10 years of employment. So for the first 2 years they were given pre-ipo options. While his option price would have been set at grant date, I don’t think the company can place a value on them because at that point it’s a wing and a prayer if they ever get to the point of IPO.

The hire-on base salary seems at bit high for 2010, but FB may have been trying to poach from google and others so perhaps offered more. The bonus numbers don’t seem unreasonable in the first few years (I didn’t read the whole thing). I don’t know what they mean by “refresher”. I worked in Silicon Valley my entire career. I regularly saw compensation/stock income for all employees in the company and “refresher” is not a term was ever used by Finance or HR. Anyone familiar with this term?

Stock and options are routinely assigned pre-IPO. Mark Zuckerberg was awarded 60 million options in ‘05 at a strike price of $0.06.

 

[JoeWras]

As long as the shareholders are happy with the share dilution, then a chosen few companies can go gonzo in their grants.

If the shareholders become unhappy, the reversal is drastic. In turn, this creates a difficult dynamic inside the corp.

Meanwhile, the other 95% of companies have to put up with kids coming in and waving articles like this in your face during recruiting. It was yet another reason to retire.

 

[NW-Bound]

I worked in machine learning related development in the NY City area until I retired at the end of last year. I was being paid several hundred thousand as base salary and this was not in an FAANG.

It was mostly luck that I started working in machine learning thirty years ago. It was a sleepy little backwater field back then. I used to get blank looks when I said that I worked with neural networks. At least one person thought I worked in biology! Things really picked up after about 2010 and had a good ten years ride.

All this for knowing a bit of calculus and linear algebra

Supply and demand.

I still remember in 1980 just out of graduate college and working at my 1st job at a major aerospace company. An older engineer in his 60s lamented when seeing an ad in something like EE Times advertising a job paying $75k for an engineer designing switching power supplies: "I wish I knew how they work". I don't remember when switching power supplies were no longer a big deal.

I recently looked up my salary history from my tax returns. In 1980, I made $25K.

 

[dunkelblau]

First rule of fight club...

If you are good, the sky is the limit. The question isn’t if tech is paying too much, but why aren’t other companies paying more for top talent? Looking at you hedge funds.

I’d you help a company make or save 10s of millions, it seems reasonable they’d kick back some of that to you. And tech does when it’s it’s obvious there’s a consistent linkage between your work and such outcomes.

For engineers landing in the right place at the right time can matter far more than outperforming 99% of your peers, which may be one way tech compensation differs dramatically from, say, investment banking or sales.

My brother joined a small publicly held tech company for his first fulltime job and his offer included NQSOs on shares of his company's stock that amounted to one year of his gross starting base pay, which was itself pretty good for a freshly minted electrical engineer. By the time those options started to vest at the end of the 1990s the price of those shares had vaulted to 30x of strike thanks to an amazing performance in 1999. I recall he mentioned that he was getting additional grants (I think those were RSUs and not options) every year up until the 1999 price surge, so he began the 2000s with company stock valued at something like 100x of his first-year's gross salary. He's still working, and to this day I don't recall that he ever brought up the concept of FIRE.

As for myself, I've profited from two option awards from former/current employers, but each of these amounted to less than two months of gross base salary. So both of my Lotto tickets won the $2 prize.

 

[latexman]

Did anyone notice that this "really good Engineer" with the astronomically high compensation made a typo in year 5 of the table?

$750M for that year! (Should have been $750k.)



My BS detector is going off. Sounds to good to be true.

 

[JoeWras]

There's BS on the internet? Who knew?

Oh wait, that phrase is out of style. I just can't.

 

[FreeBear]

These numbers and terminology are foreign to my Flyover tech world. This level of compensation wasn't even common for C-suite. It does give me a practical view of why it costs so much to live on the west coast.

It does bring to mind my choice of hardware over software early in my career. I enjoy both and probably could have done either. In retrospect, software would have been more lucrative. Still, maybe not. I recall an angst ridden thread on Money Mustache decrying the latest software development fads and fetishes foisted upon the rank-and-file coders who were just trying to get stuff done. Maybe the grass is not always greener.

Our little flyover tech IPO a decade ago, but the stock value tanked, never to recover. I always traded out of company stock, fearing concentrated risk. I didn't want to combine (un)employment risk with stock price risk. Instead, I dumped everything I could into broad market stock funds. This one "smart" move more than offset any career mistakes.

I know guy on the west coast who rode a few startup trains, but never hit it big. Keeps talking about the big payout, but he's approaching traditional retirement and is running out of time. This and the software drone-peons stories have to outnumber the "hit the lottery" careerwise ones, but who wants to hear about them!

 

[bonvoyage]

I know guy on the west coast who rode a few startup trains, but never hit it big. Keeps talking about the big payout, but he's approaching traditional retirement and is running out of time. This and the software drone-peons stories have to outnumber the "hit the lottery" careerwise ones, but who wants to hear about them!

I never hit an IPO jackpot but did get lucky in the choice of my field. I had a choice between parallel computing, coding theory and machine learning. I had the good fortune to pick machine learning for my PhD at a time when the field was just getting started. It was close call

However, there were simply no jobs in ML until about 2010. So I worked in a number of allied fields but managed to stay connected to the research community. I just got paid a ridiculous amount once the field took off. That, combined with a high savings rate allowed me to retire.

Working in software development is stressful, no matter what your qualifications or the level at which you work. Dealing with complex tool chains, bad data, unreasonable requests from customers and management - that's all the same everywhere. The more you're paid, the more that's expected of you. I'm just glad I lasted as long as I did in the field.

 

[target2019]

I have no idea of what this guy writes about his compensation at Facebook is true, but I found it interesting:

https://medium.com/@anyengineer/how-much-i-made-as-a-really-good-engineer-at-facebook-9366151b52db

Is that sort of compensation typical for a successful engineer? I guess maybe Silicon Valley compensation is different than the rest of the country.

I have a data point that I know to be true since I see the paperwork each year...

Entry level salary $90-100K for a certified security engineer. Stock awards before and after IPO grew to over $1M. The hours are long and more work falls upon the shoulders of competent employees. Many leave after 4-5 years and go to the next startup.

 

[Koolau]

Dang, I was the wrong kind of engineer.

Reminds me of "Earl." In High School, ca. 1963, Earl never wanted to be anything other than a master carpenter. For what ever reason, they stuck him in (my) Trig class. At one point, Earl had a test average of 14 points. One day, before class, we were joking about that with Earl and he stated that he had always wanted to be and engineer. Incredulous, someone asked Earl "What kind?" Without hesitation, Earl responded "Choo Choo." At that point, we knew we'd been had.

Earl DID go on to become a master carpenter. FF to 1976 and I ran into Earl at Megacorp. He was construction foreman on our new building. The finishing touch to the building was a set of stainless steel letters to be affixed to the side of the building at the main entrance. Earl, so very carefully affixed painters paper to the building and proceeded to trace the letters onto it for fit and spacing. Everyone who came by did a double take as the letters were obviously going uphill (not perfectly horizontal). When I finally confronted him, he winked and told me he just wanted to see how many comments he would get. You just had to KNOW Earl to appreciate it. YMMV

 

[JoeWras]

These numbers and terminology are foreign to my Flyover tech world. This level of compensation wasn't even common for C-suite. It does give me a practical view of why it costs so much to live on the west coast.

It does bring to mind my choice of hardware over software early in my career. I enjoy both and probably could have done either. In retrospect, software would have been more lucrative. Still, maybe not. I recall an angst ridden thread on Money Mustache decrying the latest software development fads and fetishes foisted upon the rank-and-file coders who were just trying to get stuff done. Maybe the grass is not always greener.

Don't sweat it. I was in SW. I tried the startup and got $240 out of my stock when the VCs sold out for 12 cents a share. I went with a bigger tech company where people were minting millions, but I was 2 years too late and watched my paper million evaporate into ten thousands in the tech crash (not vested yet).

Again, this isn't typical. You have to hit the right company at the right time.

And yeah, software is a fad driven business. One minute it is agile scrum. The next it is kanban. Then there are all the development suites. Blah, blah, blah.

Late in my career when I was feeling underpaid, I interviewed with a flyover company. I really hoped to get the job. They said I'd have to take a 20% cut. I was willing to do so. But I blew the interview for other reasons. Too bad.

This flyover vs. coast thing is part of the friction in our country. Oh well.

 

[NW-Bound]

I never hit an IPO jackpot but did get lucky in the choice of my field. I had a choice between parallel computing, coding theory and machine learning. I had the good fortune to pick machine learning for my PhD at a time when the field was just getting started. It was close call

However, there were simply no jobs in ML until about 2010. So I worked in a number of allied fields but managed to stay connected to the research community. I just got paid a ridiculous amount once the field took off. That, combined with a high savings rate allowed me to retire...

Hah. I was assigned to be a mentor to a younger engineer at megacorp. I left in 1997 to work with a group of friends to found two startups. Both were OK for a while, then crashed and burned when we could not keep up with technology, but that's not the story here.

The young engineer went on to get his PhD while working, and his topic was in neural network. He went back to full-time working at megacorp, and there was nothing there that used his specialty. And deep learning came after his time, I think, so he may not be up-to-date on the current technology. In any event, he is still toiling at megacorp, last I knew. Too early or too late, you don't win.

 

[NW-Bound]

And yeah, software is a fad driven business. One minute it is agile scrum. The next it is kanban. Then there are all the development suites. Blah, blah, blah.

Oh man. I am not a software guy, but have written plenty of code to do analysis/simulation for my own use. I grew up with Fortran and assembly, and taught myself C later.

Even the doggone C development suite on Windows keeps changing so fast, and I am still stuck on the IDE that ran on Windows XP. Now, there's so much you have to set up before even writing a "Hello, world" program. I quit.

 

[Retch The Grate]

not unbelievable but very much lucky timing on both a company and project level. I've known some Googlers for instance who were getting $1m+ a year in stock grants, but my wife has been there for 12 years and hers are much more modest.

 

[brett]

I worked with people who lost $1-2 million plus in exercisable stock options because the fell in love with company.

They drank so much of the kool aid that they failed to exercise their options in a prudent manner. Always expecting the stock to go up up up, even when it was on the way down. The options were granted in lieu of salary increases when times were challenging as a means to reward and retain employees.

Some viewed the options as an asset and kept on dreaming about the increases in that asset value instead of actually realizing the gain.

Next thing they knew options were almost under water and they did not want to 'take the loss'. Go figure.

 

[LarryMelman]

I’m going to call BS on the stock grant portion of this person’s claims.

I'm pretty sure there's more BS in the claims than just that. But to explain why I think so would probably get me banned so I'll just keep quiet.

 

[catii]

Interesting. DW & I started our own computer consulting company back in 1986, me with 5 engineering degrees, & her with 3. Sold the company in 2019, when she joined me in retirement, & the company's gross sales were just over $10M.

The most we ever made, as income, was around $375K, combined, although we pocketed lots more than that when we sold. Amazed that FB can pay those inflated salaries! BTW, we don't do FB.

 

[RunningBum]

I worked with people who lost $1-2 million plus in exercisable stock options because the fell in love with company.

They drank so much of the kool aid that they failed to exercise their options in a prudent manner. Always expecting the stock to go up up up, even when it was on the way down. The options were granted in lieu of salary increases when times were challenging as a means to reward and retain employees.

Some viewed the options as an asset and kept on dreaming about the increases in that asset value instead of actually realizing the gain.

Been there, done that. Here's the thing though. Had I exercised my options "prudently", I probably should have exercised as soon as they vested, which at least in my case meant selling 1/4 each year for 4 years. I would've missed on a lot of gains in my early options, more than I think I lost when the dotcom bubble burst. I never calculated that out though.

Next thing they knew options were almost under water and they did not want to 'take the loss'. Go figure.

There's a good reason for that. If you have options granted at $20, and the stock climbs but then drops to $21, you probably should hold on. Your upside is basically unlimited if the stock takes off again, but your downside is protected because you only lose out on $1 more per share. A stock price of $20 is the same as $2 if your options are priced at $20. At $21 I'd almost certainly hold. The mistake is seeing the stock freefall from $60 and not bail out at $40.

 

[GoodWishes]

DS works at Google, 3 years, base + bonus + stock > 200k.

Software pays well. But to have compensation like in the article, as other posters have pointed out, one needs to be lucky and be very good.

 

[Anthonyin2022]

I've worked at a FAANG for the last eight years in middle management. I can confirm that this guy's figures are reasonable. SV really is a completely different world from many different perspectives.

 

[PussInBoots]

I've worked at a FAANG for the last eight years in middle management. I can confirm that this guy's figures are reasonable. SV really is a completely different world from many different perspectives.

+1 Same here. Reasonable money for top 1%. Average performers in those companies are making 300k-400k.

It does not take large RSUs grants to vest in 200k annually.

 

[Koolau]

Oh man. I am not a software guy, but have written plenty of code to do analysis/simulation for my own use. I grew up with Fortran and assembly, and taught myself C later.

Even the doggone C development suite on Windows keeps changing so fast, and I am still stuck on the IDE that ran on Windows XP. Now, there's so much you have to set up before even writing a "Hello, world" program. I quit.

Sorry, you lost me after Fortran. The only computer science class I ever took ca. 1968 (anybody else remember punch cards?) YMMV