Interview with the creators of levels.fyi
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The rest of the valley isn't keeping up. Startups in particular feel like slowly ramped up in pay but capped out. They're not offering enough stock to make up for it either. Usually only enough to make it such that your TC at startup would be equal to that of a big company IF the company IPO's/sells. (A big IF!) I don't see many salaries past $200k for IC software engineer (outside of 1 year to IPO startups) and most people still balk at the idea of it. Yet, 1-2 years out of school at Big CompanyTM and you'll be past $200k TC.
I feel bad for the people who aren't in tech or things that tech pays for (real estate) and have to deal with even more frozen pay. However, it still sucks for engineers not at Big Co who believed they could make the american dream possible here.
I'm on the verge of leaving this area. My current compensation makes me feel poor even though I could afford to buy a brand new Porsche. Even if I joined Big Co now and made $400k/yr... housing has grown too fast in price in the peninsula. By the time I've saved $300-400k for a down payment, I'm going to be priced out even more. If my SO had only become a software engineer or born into a rich family instead then maybe I would have been able to afford this region.
Such is life in the bay area - you can buy a brand new Porsche but you can't afford a garage to put it in.
FAANG pays orders of magnitudes better, has better benefits, has flexible work locations and schedules, is working on the most leading edge stuff (autonomous everything, AR, VR, GreenTech etc...) contributes to FOSS, gives leadership opportunities etc...
I'm not sure when this shift happened, but I do remember the tipping point in 2016 when Apple recruited the best PhD away from my company after 6 tries and gave him a 3x pay raise (400k/yr - what startup can afford that for one person?), with the ability to work on self-driving cars.
I'm not sure how it would be possible to compete with that, and don't blame him for leaving.
That would be two more zeros. You sure they’re paying two more zeros for a dev job?
PhD or no, if your skills are good enough for FAANG, I would love to offer you competitive comp in New York, LA, or three lower cost of living university + fintech towns in SE, S, and SW.
The FAANGS are sure not paying an extra zero over what we can offer.
It's even worse than that, since the NPV of options is zero.
TLDR: in my current experience at non-staff levels, Google comp lags behind "Big-N" comp as well as "near-IPO company" comp. Maybe they just lowball everyone though.
It's not unusual to see a huge pay discrepancy based on your ability to negotiate. It also depends on what ladder you're applying to (i.e. you can't compare a Solutions engineer comp at Google to a SWE at some other company).
Don't current Googlers find that depressing?
I've also heard that pay raises within a team at Google are often designed to "level out" the spread. So if you started low, then you eventually catch up. All anecdotes and internet readings though, would love it if someone with actual knowledge commented on these things.
As for raises, that's almost right. Given two people performing equally, one who makes more than the other, the lower paid one will get larger raises, until the salaries are approximately the same. If one performs better, they'll get larger merit increases.
This is all subject to the assumptions that the system is fair at rating performance, which I try to ignore when explaining the mechanics to people.
After I reread the things I forgot about - implementing things I was hazy on, like Dijkstra, on the way - I solved a handful of leetcode questions, read a few system design analyses, attended an onsite at a "practice company," and finally scheduled my big-N onsites. All told, I studied about 4 hrs per day for five days. But I think it's really important to be honest with yourself; this process seems to work well for me, but your ideal process might be different.
In fact, when you're negotiating comp, I'd argue that an additional $1 of signing bonus or starting equity grant might be worth more to you than $1 of additional salary, because a bigger signing bonus or equity grant doesn't come at the expense of future salary raises.
However, the level you start at matters a lot. If you're an experienced industry hire who should really be an L4 and somehow get slotted as an L3, you'll spend 1-2.5 years waiting for the promo to L4. During that whole time, your peers who were hired at the correct level will be progressing towards L5. This doesn't happen frequently, but it's unfortunate when it happens. In that situation, it can actually make more sense to decline the offer and re-interview to get an L4 job offer later, since that might take less time than getting promoted internally.
In 2-3 years you'd have your $300-400k for a down payment - thats 30% of a $1.2mm house. 2-3 years to buy a median priced place. Thats not bad. Also, prices in say, Santa Clara CA have gone -5.5% YoY, and are forecasted by zillow to go another -8% in the next year.
It sucks for anyone who doesn't work at BigCo right now who isn't already wealthy from the previous work.
> Anyone can live even in the bay area on half of that, extremely comfortably.
You really might want to expand on "extremely comfortably". We all have very different definitions. I'd like a home with AC, good transportation, close enough to SF to actually make it up on weeknights (30-40 min drive), a retirement plan that works with the assumption I live in this area indefinitely, and a <=20 minute commute. I will not have that for $115-130k/yr net income. Just isn't available in the rental market we have. I'm not even getting into the part where I'd like to live in a nice neighborhood with good schools.
You can spend $5k/mo on a rental with all of those properties, and have $4600/mo for food, utilities, bi-annual trips to europe, the payment for your porsche, and a housekeeper, all whilst saving half of your income to buy a house in the most expensive region of the US in 2-3 years.
You can literally have all of those things.
I have seen one show up here and there but it's almost unequivocally in a terrible neighborhood and/or near the train tracks. Both are dealbreakers. I ain't listening to trains go by at midnight or blast horns at every intersection. Lived that life - done with it.
https://www.padmapper.com/apartments/36746960/3-bedroom-2-ba...
https://www.padmapper.com/apartments/13951431/3-bedroom-2-ba...
Point is: the trope of “nobody can live in the Bay Area on 125k net” is total bullshit, tired, and flat-out untrue. Is it harder than living on 125k elsewhere? Absolutely. Are you “poor” and unable to afford a great house? No, not at all.
There are plenty of great places.
> https://www.padmapper.com/apartments/13951431/3-bedroom-2-ba....
These are apartments - not single family homes.
https://www.padmapper.com/apartments/35506914/3-bedroom-2-ba...
My search space was Mountain View, so expand and you’ll find more. Point is there are plenty of options, you just have to look for them.
And, to be fair, I only searched PadMapper, which is an apartment rental website, so my results weren’t even focused on SFH.
Doesn't have AC. Looks like a pretty depressing home - tbh. HDR'd to hell but a brick yard and a BYO washer/dryer that's literally underneath the sun and skies isn't exactly where I'd like to put my expensive appliances.
You can check Craigslist and you won't have much better results. Adding AC | Air Conditioning to your search criteria makes it narrow. Go figure - homes with it are in high demand. God forbid they say, "Air conditioning" but really mean just central air and there's no actual air conditioning. Went to more than one showing that advertised that falsity. :(
Either way, this is beyond the point. Spending over 50% of your net income on rent alone isn't a great move. Which is what you'd be doing at $115k net income.
To be fair, I will agree with you that most places in the Bay Area don't seem to have A/C, but that's also because it's not generally needed here except for a couple weeks a year. You could do what we did in NYC all the time: window A/C's.
And people on HN wonder why software engineers living in other major cities in the US have no interest in going to the west coast.
What is being argued here is whether you can live comfortably on a six figure net salary (after taxes).
That housing is expensive in the bay area does suck, no doubt, and is super annoying. But it's far worse for non-engineers. Engineers are fine, and frankly, are the ones who are driving the prices up, by virtue of being capable of and willing to pay more, as companies continue to increase compensation.
The average software as a service CRUD journeymen developer could do that in many non west coast cities could do that with an FHA loan with less than $15K down with 3-5 with a salary they can make with around 5 years experience. If they are part of a married dual income couple they would be quite comfortable.
For some reason most of them have the original gross beige carpet too.
Last year there were at least 2 weeks of 100+ degrees at my house. It’s a personal preference, over 80 I need ac. I’m sure some people like heat more. There are ~80 days a year it’s over 80 degrees.
Source: https://www.currentresults.com/Weather/California/Places/san...
I remember May and June weather as 'nice'. August and early September as 'hot'. And then October through early December as 'nice'.
Seriously, I went to a top-3-in-the-world engineering school...seriously dont I deserve something better than a shack?
Secondly, half the 40+ workers in tech I know are washed out and cant get hired, likely due to age discrimination. Tech is a lighter version of Football -- you better make the money in your 20s and 30s, because you need to live on that cash for the rest of your life. So I cant just blow ALL my post-tax income on rent, I need to save it for the post-40 slump.
Thirdly, you are constantly on the treadmill learning the new new technology. Its an uphill battle constantly for those high paying jobs.
And it has to be in San Mateo->Mtv. And it must have /CENTRAL/ AC, one would assume. I'm not going to look for houses for you, except to note there are over 100 houses available right now under $5k in that region, all of which you could install central AC into for a couple grand if you wanted. If you MUST live in the San Mateo->Mtv corridor, with all those amenities, why would you imply you're looking to move? It seems like you know what you want, and are not willing to compromise on anything. Go forth and find that perfect rental, or if you don't make enough money to get it, work harder, or re-evaluate whats actually important to you.
You might make it to North Bay/Marin - which is true that it's rural, but it's not because it's a secret or far from humanity or anything. It just has the fiercest NIMBYs on the planet who are fine with all their services being provided by day laborers with 2 hour commutes.
$115000 / 12 months === $9583.33
This is the key to happiness in the Bay Area, honestly. The rentals are just fine if you're willing to shell out. Sure you're not building wealth but you have plenty left over to invest, even in a kickass high-rise apartment. It's specifically a desire to own that will screw you over, no matter your compensation.
I guess it's true that money != happiness. There's always more you could have.
But every single American friend I have either has a home, or dreams of home ownership in the suburbs. And it makes sense, if I grew up in a home with a yard, I would probably want something similar for my children too. That kind of emotional connection is hard to overcome.
In the bay area for example it doesn't make ANY sense to buy right now (Price to rent ratio, google it) but still people are flocking on every shitty apartment on sale. That's because they want to feel that little ego boost when they say they are "homeowners".
I'd also argue that most other assets are also highly inflated. The P/E on most tech stocks for instance looks a lot scarier than the overall real estate market. I'll add that people have been saying the Bay Area housing bubble will pop for over 30 years. It hasn't yet.
There is a huge lobby in society to convince you that owning a home is the way to go (banks, real estate agent, other homeowners and people repeating this nonsense all the time). Don't let this fool you and make the calculations before buying anything.
All the sfba homeowners who bought for cheap but are now sitting on millions of dollars of property could easily make a tidy sum if they were willing to sell for less but they will feel like they left money on the table. Ultimately when the bubble pops, everyone will sell for less but they will all think it’s perfectly rational because the “market is down”. I don’t get that perspective at all. Buy low and sell high, within reason.
I want a home that I can modify to my desires and use as I please. I want a woodshop at my home or to do some small machining in my garage - can easily do it if I own the home. As it stands, my landlord gets on my case about even the smallest of changes or for even using my god damn backyard patio. (He says my furniture ruins the "cutesy aesthetic" of the exterior; the oh so visible area that no one but us can see)
It's pretty annoying and home ownership doesn't remove all the burdens/restrictions but it is better than the overbearing landlords that seem overly abundant in the bay area.
I get the impulse behind trying to level employees but it always seemed ridiculous to me. Either you care about it enough to game it (which is pretty easy to do) or you don't an you just do what you think is important to you and your team and it works out... so you level up by accident.
This is actually a huge reason I don't like bigger companies. There is so much emphasis on Seniority, Levels etc. Its complete bullshit. You see people game the system, rise to the top, get all kinds of bullshit honors for doing bullshit things. Meanwhile the grunts doing all the actual work and innovating like crazy are just happy to make the higher ups look good in front of _their_ peers and don't really give a shit about the product or the market.... its a vicious, self-sustaining and self-dealing beast.
Nobody leaves FAANG1 for FAANG2 to simply get a title bump. They leave to get the level bump which sometimes means +20%, +50% or even +100% in terms of total comp.
Levels are fictional rat races designed to keep the rats working hard in hopes of “making it” without necessarily having achieved anything of substance.
Your counter argument is that they’re not just titles but have associated compensation components .... great. Doesn’t mean that you’ve accomplished anything significant at all. And now that these levels are normalized across companies, the only thing employees care for is leveling up, who gives a shit about whether you’re really learning or making a difference.
Unless you’re assumption is that levels are more than just a financial totem pole but an accurate representation of skills and accomplishments. I think that’s what they aspire to be but are not so in practice.
I'm $40k/yr shy of the average reported salary for the average senior SDE, and I'm missing $140k+ in stock/bonus... am I wasting my time at my current job making 50% of what I should be making or am I missing something about these massive public companies (like, not everybody gets hired at these companies... or... they suck to work for?)
Where are these $200-300-400-500k/yr rates coming from? Do you have to sell your soul to reach that? Am I grossly underpaid? I usually am at the higher level in my organization/division, and yet I'm impoverished (comparatively) according to levels.fyi?
If your company doesn't do stock/RSUs, you're missing out on that aspect (though a small number of companies make up for that with large cash bonuses).
A good performance review gives you the opportunity to demonstrate how well you are doing and back that up with feedback from your peers. It gives your manager documentation that proves you deserve more compensation. And you get this opportunity on a regular basis.
Even if you don't get a big compensation increase every time, annual reviews are generally when the company, as a matter of policy, gives out cost-of-living raises and stock grant refreshers. At companies without review processes this doesn't always happen every year.
levels.fyi does not say everyone makes $300k+ - it says people at specific companies in a specific region make that much. It makes that quite obvious from how you have to select the companies, the level, and then you see where those offers are geographically and with how much experience/tenure.
search for a city and see if it compares in any way to your salary?
People also disregard the infamous “4 year cliff”: At most of these companies, your initial stock offer fully vests in 4 years, so your 5th year, your take-home comp nose-dives. Even if you get modest raises and “refresh” stock grants (which not all companies do), you’re likely taking a huge hit in year 5. I’d be interested in a levels.fyi filtering out people’s first four years.
Even if they DID make you take a paycut you could jump ship every four years anyway, so why would you care about comp past year 4?
At Google, they're between 25 and 50%, depending on a lot of stuff. My initial grant was ~150k, my first refresher was ~40k, and it's a wash if my 4th year refresh will match my first year, that will likely come down to if I make L5 or not.
It probably does also vary with your role/responsibilities - I am a software engineer in SWE on high visibility/impact work. Apple does definitely does make you earn refreshes - they don't give them for average performance oftentimes is my understanding, there seems to be a lot of stories out there that this is the case.
levels.fyi shows people making $300k in Austin, TX (which as far as I know, is not a high cost of living area)
What are some areas that are comparable to South Florida that are listed on levels.fyi?
Total comp for my college hires averages around $150k.
Total comp for my career level ICs averages a smidge over $200k.
My top 10% have total comp in the $350k neighborhood.
The very few folks who are at the staff/principal range (depending on which companies titles you're using) are taking home $500-800k (mostly in stock). If we consider attrition, it's probably only 1 in 150 of the engineers we hire who ever hit this tier or above.
The levels.fyi info seems pretty accurate to me. Their estimate for my personal role is within 2% of my actuals.
What cities is that number for?
Would I trade all those years at startups for going straight to google? eeh, maybe 4 of them. On the other hand though, I don't think I would have made it through the interview without knowing a lot of random shit I learned at startups.
Also being a dad and working at a startup does not mix well.
[1] https://www.levels.fyi/comp.html [2] https://www.levels.fyi/2018/
Also be careful what you wish for. I’m not sure if the stress and personal impact are worth it. I have constant anxiety. Some of the people I work with are really smart but manipulative and generally not great human beings.
It’s not for everyone. I’m just trying to get to $1MM in my after tax account before I leave this company for something more sustainable.
It was really shocking to me to learn how disgusting some very intelligent people can be. It rewrote some of my philosophies of life in the first half of my twenties. Turns out we don't all have cathedrals in our heads when we have the tools to build them.
Amen to this. If anyone here believes that those who possess high intelligence are naturally more ethical or good-hearted than the average, try getting between any of them and their next bonus / promotion at a FAANG or in academia and you will rapidly learn otherwise.
It seems to me that now title inflation is countering this somewhat. I'm the newest hire in my organization and my title is "Analyst". I'm the only person at this level in the entire group, because I've been here less than a year. Everyone else, who have each been here 3 years or more, is "Manager" or higher (about 2/3rds are "Director" or higher) even if they are really just individual contributors with no direct reports or management duties, because they have to increase people's pay to keep from losing them, but they can't do it without bumping them up a pay band, which is only allowed with a "promotion". But while this is true in my group, there are groups where there are 200+ individual contributer-level people, and maybe 10 managers, and those people are never getting pay raises.
It reminds me of how "VP" is an inflated title in investment banking roles.
> In brokerage firms, investment banks and other financial companies, "vice president" is a seniority rank rather than denoting an actual managerial position within the company. It is a relatively junior position, usually does not denote managerial responsibilities and companies have a large number of vice presidents, perhaps as an inexpensive way for a company to recognize employees, or perhaps because of delayering when an employee can't be moved higher in the organization but still deserves recognition. In most cases, the title merely implies that someone is in a medium-seniority individual contributor role
https://en.wikipedia.org/wiki/Vice_president#Use_in_financia...
https://news.efinancialcareers.com/ru-en/311356/salaries-and...
Ping us at hello (at) levels (dot) fyi if you have more feedback!
Please do! Thanks :-)
I worked at a small series B level startup, and when I left I had the option to buy my shares at the last valuation price, but at just over $20,000 total I declined. I decided I could use that capital better than waiting around hoping they explode and get acquired. I don't think stock options work the same with public companies though.
Usually you’re given a number of shares when you join, and the value of those shares change as they vest. This can lead to some really overinflated comp packages if a person joins before huge growth that a new person would not get.
There’s often restrictions around when you can sell while still employ by that company to avoid insider trading laws, like you can sell right before earnings reports.
Also one quirk of microsoft is since they have a half-title promotion system, as I understand it, it's normal to get refreshers on years 1-3 through a 4 year vest after a half-title/one-level promotion.
The 50% on receipt number comes from your marginal federal tax bracket plus state -- same as if the dollar value were additional gross (pre-tax) income.
The 20% on growth number (potentially 25-30% including state) is what you'd pay on capital gains -- same as if you'd taken this extra income as cash and invested it in anything.
For public companies, the vest date is also the release date, which is when the shares are recognized as income. You have to pay taxes when they are released, which is basically 25% federal tax plus whatever your state's tax rate is for this (10% in CA). To pay the taxes you can either deposit cash to cover the amount and keep the shares, or sell some fraction of the shares on the release date.
If you keep the shares, then any gain after the release date is taxed as capital gains. Basically, from a tax perspective it's equivalent to the company paying you cash on the release date equal to the stock price of your shares and you buying shares with it.
There are other options than purchasing the options yourself or just letting them expire.
From a pure finance perspective, you just need to find someone to take on the risk of the exercise. My company, ESO Fund, has a diversified portfolio of startups and as a result can take a $20k bet with much more ease than a single employee making a $20k bet.
It’s been discussed before but the sad reality is that passing an interview loop at the big 5 and building stuff are not really correlated.
I'm missing the craziness of studying at university where I felt everything was possible. I had sometimes similar feelings in startups.
In big companies that created that level structure it's shocking how boring everything becomes. People define themselves based on their level. That becomes the only goal together with the TC (Total compensation). It really feels like a rat race sometimes.
But that was an MSc, not PhD or something where your research is more likely to have output/outcome.
I recommend reading "Extreme Ownership" to get a sense of the importance of leadership because there are no bad teams, just bad leaders. We are the apex predators on the planet, and the key to our success is understanding the social element of it and how to take a group of people and have them achieve something amazing beyond themselves individually.
PS. bro you're great for making this happen. levels.fyi is like "software eating the world" for labor unions. Clean, elegant solution avoiding all the nasty labor unions politics. Now if we could also bring awareness around work/life balance!
Thanks for the kind words! Surfacing work / life balance and general workplace concerns is in our roadmap (3-6 months out). Look out for updates soon!