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DVassallo

My progression:

2008: Graduated with a BS in CS from University of London. I grew up in Europe.

2008: €30K - Joined a small company in Europe as their only programmer doing vehicle GPS tracking.

2009: €30K - Still there.

2010: €50K - Joined Amazon in Dublin, Ireland as an SDE-1 (entry level) in the AWS CloudWatch team.

2011: €75K - Still at Amazon, same team.

2012: $120K - Moved to Seattle with the same team. Promoted to SDE-2.

2013: $150K - Still at Amazon, same team.

2014: $185K - Promoted to SDE-3 (senior level), same team.

2015: $230K - Still at Amazon, same team.

2016: $390K - Still at Amazon, same team.

2017: $470K - Still at Amazon, same team.

2018: $511K - Still at Amazon, same team.

2019: Left Amazon last month. You can read more about why here: https://news.ycombinator.com/item?id=19135399

All figures are gross income as shown in my W2. My last 3 year-end (Dec) paystubs: http://imgur.com/a/EgIVQln

Ask me anything.

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Graduated in the late 90s with a degree in CS. I read this and I wonder, where the hell did I go wrong? If this is commonplace, then how did I fail so spectacularly?

A significant portion of his compensation was via recurring Amazon.com stock grants (RSUs). By year 4+ most employees are looking at least 3 separate stock grants vesting every single year.

Had you bought $100,000 of $AMZN in 2010, it'd be worth $1.35M today (and $1.6M in September) which would go a long way toward evening things out in a similar manner.

It’s true that a big part of my comp was in stock, but I only meaningfully gained from stock appreciation in 2017 and 2018. In the other years stock appreciation accounted for only $5-$15K. I sold all my stock as soon as it vested, so I sold a lot at $200, $300, $400... etc. Even in 2017, I got it at all under $1000. Now it’s $1700.

I was just in the right place, right time. Ten years ago my target was to make $100K/year by 2020. Never would have I imagined these amounts were even possible. But once I attained a basic level of financial security, additional income stopped mattering for my satisfaction. It’s one of the reasons I left, despite everything was going well by every traditional measure.

It’s not commonplace.

the relevant discussion:

https://news.ycombinator.com/item?id=19135399

I work in Canada government on Java ee for 3 years, worked on other legacy application on cobol etc earlier for 10 years. I have undergrad in CS. What technology can I learn to level up my salary with current market standards? I will appreciate any other advice to get up to those level.

I look at numbers like this and think... where did I go wrong?

I must have gone seriously, seriously wrong...

How common are these huge annual salary bumps at Amazon?

I got a big bump in 2016 because I got a competing offer from Oracle, and Amazon matched it. 2017 and 2018 growth was from stock appreciation. If the stock hadn’t increased so much, the last 2 years would have been at around the 2016 level. AFAIK, people with ~10 years experience commonly get offers at around my 2016 level.

I was wondering about that. I mean when I was at Sun they paid a market wage and had an employee stock purchase plan[1]. When I left Sun in '95 the stock I had left was worth about $1.2M, it had gone from the $20's to over a $100 and split twice (if you do the math that was $60,000 worth of stock to begin with, which had accumulated over about 6 years).

I don't think of my wages being $1.2M so much as I happened to get lucky with that equity. (I have also experienced the reverse where > $1M worth (on paper) of stock was worth less than $10K when I could sell it, it isn't all roses.)

But ~$500K is the market rate right now. Several people I know got that amount at Google, Facebook, and Oracle here in Seattle with ~10 years experience in cloud or AI/ML. Amazon’s stock increase has inflated the market rates because other companies had to pay so much in the last 3 years for people to leave Amazon. Obviously there’s no guarantee that this will last forever, but I was pretty confident I would have continued to make $500K/year as long as the market conditions remained the same. I also had enough unvested RSUs until end of 2020 to make that much.

I understand what you are saying, and when you sell stock that vests it is completely reasonable to count it as income as it shows up on your W2.

My point was that just prior to the dot com crash I had over $6M in "RSUs" (well restricted stock which was a better deal since the number can't be fudged but what ever) and when it "vested" it was worth less than $12K. It showed up on my W2 because I used an 83b election to vest it all up front (and get in on a lower tax rate when it unlocked) only to have it generate losses when it unlocked.

Where I was going was that there is 'base pay' which you are going to get if you show up every day and don't get fired, and there is 'variable pay' which can come in the format of annual bonuses and or vesting equity. The annual bonuses tend to be something of a beauty contest and so can be hard to predict, and the market can swing wildly (hopefully nobody with RSUs today has to experience a 99.9% drop in value that I did during the dot com crash but it can happen, you could have had Theranos RSUs for example).

The original author went out of their way to stick with just base pay and I understood their reasons for doing so as I largely agree with them on the lack of predictability of other remuneration options.

At these levels it's all variable since practically all compensation is in stock. If you're not good enough to be given stock, you'll likely get fired. Everyone's base at Amazon is capped at $160K, including the CEO and the execs making $20M/year. When the stock dipped from $400 to $290 in 2014, Amazon topped us up mid-year to make up for the shortfall. Otherwise people would have left. Obviously if another bubble/recession like 2001 or 2008 happened again, the whole market would likely shrink and people would get less RSUs and they would be worth less. But they'd have to settle for that since the opportunities elsewhere would also presumably go away.

This is less a direct question and more of a discussion: I always thought it was considered a bad move to stick with your old company after receiving a competing offer and negotiating a higher wage at your old company. Conventional wisdom I've read is that your old company will slowly phase you out (thus missing out on promotions/raises).

Have other people been so successful using an offer for a raise at your original employer and staying?

I have never retaliated against employees who gave me competing offers; some times I haven't been able to meet them and they left, but every time I did meet them, people stayed.

The people who stayed basically pulled forward a stock grant that was coming anyway, and increased this year's raise while decreasing it a fair bit for the next two years.

I've always been explicit that this is what's happening; the area under the income curve does end up larger, but not by a large amount. Of course the option value of having a grant vs. hoping for a grant is worth something, too.

DVassallo's $160k bump across one year's W2 is much larger than I've ever seen granted.

At big companies I don't think that happens. Everyone understands that everybody is there for a temporary period. In my case, I think only about 3 people knew about this, and I believe they genuinely wanted me to stay.

This is really good information to know, thanks.

Those total comp bumps from 2015-2019 were probably due to massive stock appreciation more than salary increase.

Only 2016 and 2017. The other years had minor impact from stock appreciation (~$5-15K). In 2016 I got a big bump because I got a competing offer from Oracle at $380K, and Amazon matched it.

Can you share what sort of skills related to cloud would net me 380k/year? Got a phd ee doing C++ mostly.

5 years experience at one of the leading cloud companies (AWS, Azure, Google) will very likely put you right in that market. Nothing special to join. It’s very hard to enter directly as an SDE-3 (or equivalent) without having experience at one of the big companies. I think in 8 years at Amazon I’ve only seen 1 person doing that. With a phd and some work experience you can likely join as an SDE-2 and get to an SDE-3 level in about 5 years. The exact timing depends a bit on the opportunities you’d find, but I’d say that’s definitely very realistic. I can put you in touch with a recruiter from Amazon if you’re interested. My email is in my profile.

"Cloud" can mean a lot of things, so what does it mean to you in this context?

Edit: Put another way - day to day, what are people in such roles working on exactly?

Deep knowledge of how services like those offered by AWS, Azure, and Google are built, operated, and designed to scale.

Do SDE3 interviews still do it leetcode style?

No, they shouldn't. But it depends on the interviewer. SDE-3 interviews will be more behavioral than technical.

Also, what language were you using?

Java mostly. But I didn't write a line of code in the last 2 years.

It's stock increases.

Only 2016 and 2017. Those 2 years would have been at 2016 level if stock didn't increase. The other years had negligible impact from stock increases.

Can you do the same but only include base salary?

Base salary was $160K since 2014. But why? The stock part ended up as money in my bank. These aren’t stock options like startups give. Public companies like to pay with stock because it didn’t impact their cash flow. The shareholders pay for it via dilution.

Did you sell stock as soon as it vests? Why?

If you don’t, you need to ask the question: if I had a pile of cash to invest, would I use it to purchase my company’s stock given that the stock price snd my employment opportunities there are at least loosely correlated?

Yes I did. I was always very exposed on the Amazon stock since I always had 2-3 years worth of granted RSUs that hadn’t vested yet. I didn’t want that much exposure.

Diversification. Even if you want stocks, you don't want them all from the same company. It would be better to just stick that money into some S&P500 index fund.

Whatcha doing now that you're a millionaire?

I’m working for myself. I’m exploring some ideas right now. My target is to have something on the market by around May, and then keep iterating/changing based on market feedback. Going to live off my savings until my work can cover my family’s expenses. I’m hoping that happens before I run out of savings.

How could you possibly run out of savings when you had that kind of income? Were you spending most of it? What is your monthly expense rate now? Perhaps you bought a multimillion dollar house?

I live in Seattle (high cost of living area) and have 2 small kids (2 & 4). Just housing and insurance (health, life, disability, etc) are $84K/year. That’s before food and utilities. My total expenses are about $150K. I start with a round $1M in liquid savings, so it’s about 5.5 years of runway. There’s more detail about my finances in this post for those curious: https://danielvassallo.com/from-employee-to-bootstrapper/

Very interesting blog post, to me at least.

I live in Seattle too, and this is the first year I made more than $85k. But I don't have kids.

Yes, it’s more expensive with a family. The cheapest health insurance from Obamacare was $15K/year, with a $14K decidable. I live in a 2,500 sqft 3-bed townhouse and all housing costs are $64K/year (mortgage, HOA, and insurance). Then I have another $5K for life, disability, umbrella, and auto insurance.

Care to share more about that retention bonus? Are those regularly used? Did they have a sense you’d be leaving?

No. I got that in 2016 because I had an offer from Oracle that included a $25K cash signup bonus and Amazon countered with an exact match.

You must be missed at Amazon and were a good employee. Congrats!

How many RSUs did you walk away from?

About $650K that were going to vest in 2019 and 2020.

That’s insane. Do you seriously expect in five years to be in better financial shape then you would have been had you stuck it out?

No. But I'm not optimizing my life to make as much money as possible. I'd like to work on my own terms, doing things that intrinsically motivate me. If I can do that while covering my family expenses, I think I would have improved my life.

Any advice for someone like me who IS trying to optimize for as much money as possible?

Being self taught, will I ever get to be as fortunate as you working at FAANG and seeing salaries and stocks like that?

Yes. I'm self taught. Plenty of self taught people at Amazon, with non-CS degrees, or no degrees at all. That definitely won't be a blocker.

My advice would be to not try to seek satisfaction from "earning as much as possible"... because "as much as possible" is an unreachable destination. I worked with lots of unhappy people earning $350K/year because they felt they should be doing $500K. How do you think they'll feel once they're making $500K? I bet they'll still be miserable because one person they know is their age and making $600K. And so on. Same with promotions and job titles. Once you clear a certain level of financial security (bills on autopay, some savings), more income stops mattering for satisfaction.

So, no degree at all for you?

I have this mental hurdle I cant seem to get over, I keep reading about how there are engineers at FAANGs purely self taught but then im also reading about people with degrees, bootcamps, internships under their belts having a hard time getting hired.

What advice do you have for me? If im self taught how do i even get my foot in the door with amazon? How do I have them even consider me for an interview? Anecdotally speaking how did you and your self taught peers do it? Was it projects? Or work experience at less exclusive companies?

To get in all you need is to clear the technical and behavioral interview. I participated in over 300 interviews, and not once was education ever brought up as a factor. Amazon in Seattle hires hundreds of people a week, and there's plenty of openings in other places. Just find a position you think is a good fit and apply. If you know someone working there it'd be good to get a referral, but it's not required. I just applied from their website in 2010, and I started 3 weeks later.

How do you get past the resume screeners?

I do have a degree, but I participated in plenty of resume screening and education was never a filter for programming jobs.

What do they filter for? How do they keep just anyone from applying and keep it to qualified people?

How much is required on a resume to get past a screener and land an interview?

I can’t speculate on mindset or motivation, but based on purely financials I’d have suggested sticking it out for a few more years to build up a larger nest egg. It’s not just the risk of not succeeding at your next venture; there’s the follow up risk that after failure you can’t get back in the game where you left off.

That said, best of luck to you. Fortune favors the brave!

Assuming DV was able to save a good% of their money and get a reasonable return on it, their nest egg could easily be a couple million today. After taxes etc another 3 years might only grow that 10-15%.

Yes, staying another year wouldn’t have made a big difference. My net worth is around $1.4M with $1M in liquid savings. In the last 2 years I added ~$200K per year in savings. I just didn’t want to keep postponing. Otherwise there’s always a reason to wait another year or two.

How did you make SDE-3?

I had the opportunity to lead the development of CloudWatch Logs in 2013-2014.

what do L5s and L6s SDEs earn in London - do you have any insight into location based differences?

I don’t know unfortunately. But if I were to guess, I think in the same ballpark as Seattle, maybe a bit lower.

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