Compensation in 2019 – new grad tech offers
blog.jonlu.ca
blog.jonlu.ca
That said, I'm happy that people get paid well to do something they love, but that can often be very depressing. Not always certainly, but damn if you've never looked out from behind your screen at the sun shining and thought a little less of the React component or whatever saas thing you work on.
It's easy to forget that many of these articles, and particularly posts are Blind, are just just riddled with people posturing about the same thing.
Edit: I should add the emotional response I tend to have given my circumstance, I do think it's way better to have transparency than not.
Well, if they are in SF (which many of them are), they know exactly what to do with all the money: pay the rent and share pizza with their 6 roommates.
Edit: At an 11k surplus every month, I take the above comment back.
Better than "zero" signing bonus. $100k takes how many years of saving money? This signing bonus is "free money" provided you stay with the company within the agreeable period.
According to one poster in this thread [1], it takes 1 (one) year for him to save up $100k without even trying.
See: https://news.ycombinator.com/item?id=20943699
Yes SF is expensive, but these salaries are absurd.
That poster is definitely has good compensation, but TC needs to be broken into salary and equity.
Your compensation has nothing to do with stock price. Your decision to sell or hold onto the stock is an investment decision made by you, but isn't really relevant to the discussion of "this is how much money was given to me by my company".
Get $50k in equity ($100 per share), but you can only sell 1/3 each of the next 3 years. Stock price drops to $50 means you now have $25k of equity.
If it’s options it may mean you get $0.
But if you are granted $100k worth of stock in February, and the stock price drops by half in March you're only getting $50k worth of stock. Come next February, your stock grant will probably have a higher number of units to account for the drop in price, but you still earned less than $100k in stock the previous year.
Really, anything but taking the value of stock as it is when discussing total compensation of well-established publicly traded companies is just noise.
When I left Google, a substantial part of my salary was via stacked yearly vesting GSU (like RSU) stock grants with some bonus mixed in. That meant that my salary was heavily dependent on the whims of the market. It also meant that my cash flow was somewhat impacted by either doing a lot of extra withholding or doing quarterly estimated taxes, since the GSUs were taxed at 25% instead of my actual tax rate.
Just getting paid every two weeks is so much nicer, and so much simpler. And we don't have a Monday in January after annual bonuses are awarded when we spend all day talking about who quit after their bonus was paid.
How is this worse? You can always sell the stock as soon as it vests, with zero tax implication.
When the stock price flattens, that extra $11k per month might turn into an extra $5k per month which isn’t exactly rolling in cash in SF.
Shooting up? Dude works at Pinterest, and Pinterest stock has actually been falling recently.
>extra $5k per month which isn’t exactly rolling in cash in SF.
Five thousand dollars a month is rolling in cash for anywhere. This is the type of attitude I'm talking about in my other comment in this thread. There's an incredible loss of perception when it comes to SVers and what constitutes a lot of money and what doesn't. An extra $5k a month is more than the entire salary of the average American household. Hell, it's almost more than the average SF income!
If you want to save up a $300k down payment on a single family home, $5k a month in savings will take you 5 years (assuming you ignore your retirement entirely).
Otherwise, I agree that $5k per month after taxes and expenses is a ton of money.
Save up 100k and move to the middle of where in India. You won’t be able to do your job, or talk to anyone but hey, you’ll be better off than most of the world.
Check Zillow for prices.
I am currently living in a gigantic 3BD for $5200.
The type of fresh-grads that chase FAANG for fame and money aren't necessary the type of developers that love their work and craft. These fresh-grads put career first and craft second. I'd say the majority, not all. There might be one or two pockets of small group of people who love to do these stuffs ... maybe...
> but damn if you've never looked out from behind your screen at the sun shining and thought a little less of the React component or whatever saas thing you work on.
There's plenty of sun in California ;). Plus, they're doing what they love no? I'd say these folks know what they're getting themselves into (e.g.: still chasing Facebook despite known as cutthroat employer).
> Believe it or not, it is okay to love your craft and expect to be paid. It's not zero sum
I do believe it. Just not the majority of today's fresh-grad that has the attitude.
FAANG these days demand you to go over rigorous Leetcode and System Design practices (mostly having to do with high-level scaling architecture and not CODE level which where most of the craft exist unless we changed the definition of craft). Some people have to spend months training themselves in Leetcode because they really really really want that high-paying job in top brand companies.
Feel free to correct me if I'm wrong but I'm associating "craft" with writing code, learning best practices, or building products regardless the environment/situation. Not grinding Leetcode HARD problems trapping water 3D: https://leetcode.com/problems/trapping-rain-water-ii/
Gone are the days where companies hire OSS contributors because they're good at a specific domain.
> In fact I'd say many startup new grads lose out on code reviews and architecture tips by senior people.
I think you might conclude that startups == mid-size companies like Airbnb and Dropbox? Feels like it's either FAANG or startups while there are middle ground of just about different size of companies with varying years of existence.
> It's not their fault that they have to do that. If that gets them a good life.
No complain here. Good for them.
> That doesn't mean there aren't people who genuinely care about their craft and want to be better architects.
Minorities. Unlike the past.
> That's why systems (infra / embedded etc ) have a higher rate of people who truly enjoy it joining.
I'm on Infra. Most of my peers who are working on Infra are older people (35-40+ years old) with purpose. Most younger folks prefer "mobile" or "app" teams.
Given the large differences in compensation (which makes a big difference when trying to save for a house in this area), I wonder how older Silicon Valley giants are able to compete with FAANG companies? Startups can justify lower compensation since there is the possibility the startup would be very successful. I wonder for giants if the difference largely boils down to interviewing processes? I do know that getting into a FAANG company is difficult and requires many months of grinding LeetCode, whereas not all Silicon Valley companies have difficult interviews.
Yes, most of my check still goes towards rent but at least I have a little bit more left over to plan for the future.
To everyone chiming in with how wild the salaries are, this is really the point. If you're doing competent work for less than the local market average, you're paying your company for the "opportunity" to keep working with them. Sometimes that's the right call for both parties. Most times it's not, and OP's transparency helps workers protect themselves from exploitation.
Number 1 is relevant for many many people: Any pre-existing loan. Student loans, car loans, etc. It won't change, and you'll have more money to pay it off.
On the same thought train, while cars sell for different prices in different places, they do not double or triple. Not even close.
Even if entirely true (which is not immediately clear - does the car or phone or laptop cost triple in NYC?), that is by itself a great deal.
2. Even if triple was correct, since the living expenses are not 100% of your pay in either case - you're still better off living in NYC in terms of savings - I hope you can do the math to see this.
As far as taxes are concerned, they're higher, but in both places state and local taxes were a pretty small percentage of our outlay anyway. It's a bit hard to compare because the state income tax and higher property taxes are offset by lower sales tax (with broader exemptions) and less direct-billed government services.
Edit: However, the people in Dallas are the nicest I've met. Really miss southern hospitality compared to here, where everyone thinks I'm hitting on them for being so outgoing...
You have to keep in mind that these are salaries for the largest tech companies in the world, it's not just about being in California.
For comparison, being a VP at Google/Facebook equates to salaries with multi-million dollar bonuses and ridiculous equity packages.
And yeah, a $200K house in Michigan is probably about a $2M house in the Bay Area.
In the peninsula, a $2M home just gets you a decent neighborhood. The home itself is meh. House I'm in has never been updated and is from the 1930's. It's about $1.7m. 1000sqft with 400sqft in-law unit. 4000sqft lot.
https://www.zillow.com/homedetails/2833-Tramanto-Dr-San-Carl... (San Carlos - under the radar suburb in the bay area)
https://www.zillow.com/homedetails/811-Longfellow-St-Detroit... (Second most expensive home between 2k-2.7k square feet in detroit)
5 bed, 6 bath, 2900sq ft. $1.6 mil recently renovated, all around, with a private backyard. 1683 Newcomb Ave, San Francisco, CA 94124
It was burned down or something some years back. Previous owners probably took the cash from it going down, sold the rest, moved away, and then someone bought it, rebuilt it, and made a shit load. https://www.google.com/maps/place/1683+Newcomb+Ave,+San+Fran...
No one would own it to live in now. The neighborhood is not good and is why it's priced accordingly. It's an investment/rental property.
Stock and signing/perf bonus accounts for anything over 130 or so for a new grad.
Curious how they compare to Germany. Since Finland has a much smaller economy, is it difficult to stay employed the whole year on a freelance basis? And do you have to go through a contracting company?
Even though it's expensive to live here, we're not anywhere near San Francisco, in terms of say housing prices. And there are many other things I also never have to worry about, without getting too political about the issues.
side note: above 33K tax is 50%+ on each and every euro, about 20% below
How does one relocate to the US, sigh
First is the lack of venture capital. Major economies like Germany and France are still only typically seeing $3 or $4 billion per year in venture capital investment (an improvement over five years ago granted). The US has averaged around $85 billion per year over the prior six years, or over half a trillion dollars in that time. With interest rates & yields heading permanently lower in the US, it's likely we'll see $100+ billion routinely in annual VC in the coming decade (outside of down blips in recessions), as capital desperately chases returns.
The EU has typically been closer to $15 billion per year, with a few higher years more recently. You can't compete at those levels. Countries like Finland, Poland, Portugal, Italy, Belgium, Austria, etc. are regularly seeing only $100-$300 million per year in VC. Spain is a major economy and they struggle to consistently attract $750m-$1b per year. Europe needs to pump up its VC figures considerably; more start-ups, more funding, pay engineers higher wages to retain & attract more talent (SV has been pillaging Europe for talent for decades).
The VC funding per capita in the US - 330m people - is around $250 give or take. For Italy it's about $3. That's obscene, Italy has a $2 trillion economy and $34k GDP per capita. Something needs to be done to dramatically increase such figures, probably both at the local level and the EU level.
Second is the difficulty in going from a small start-up with a small amount of venture capital, to try to scale out rapidly across the EU, much less the world. It's extremely difficult, versus the springboard US start-ups get to launch from, starting with far more capital, in a richer, larger, homogeneous economy. Canada would be the fifth largest economy in Europe, and US start-ups get that market for basically free (so to speak; low cultural barriers, relatively easy market access, very close geographic proximity).
Then finally to make the situation worse, large US tech companies routinely eat the European start-ups before they grow up. That interrupts the potential for larger exits & spread-the-wealth effects that roll/compound over decades (helping to build sustainable funding ecosystems), like you've seen over time in California. For US companies it's a great source of talent acquisition.
It makes it even worse to see the casualness that people in this thread are talking about $200-300k+ salaries, as if they have no appreciation for the fact that a $300k salary is unheard of even for most people in their 50s, let alone a kid in his early 20s. This is the type of attitude that I fear really makes Silicon Valley outsiders have a good amount of disdain for SVers.
Having said that, I do understand your point in this statement:
> as if they have no appreciation for the fact that a $300k salary is unheard of even for most people in their 50s, let alone a kid in his early 20s.
I noticed an increasing number of fresh-grad that feels entitled for a big salary. Their attitude is off the chart...
edit: and for the record, I'm one of those "new grads" making a self-admittedly absurd amount of money for what honestly amounts to a relatively meaningless contribution to society. Yea, I take the salary (and try to donate a good bit of it), but it still makes me feel uneasy that I'm being paid this much in the first place.
Honesty a lot of this just sounds like sour grapes
So while you can say that sounds like "sour grapes", I do have to say that there is an increasing sour grapes among the fresh grads.
Or things like "your TC is low, you must be suck".
If the discrepancy between engineering salaries and research/teaching/nursing salaries is bothersome then perhaps the blame should be placed on the economic environment that has produced this result, not the twenty-somethings that are accepting great compensation.
It may not have been your intent, but your comment has (at least on my read) an accusatory tone. You ask a number of rhetorical questions which indicate that you have low-regard for the work of the engineers in question.
You appear to be doubling down on this with your recent comment.
Why so defensive
Calling someone defensive because they disagree with you is uncivil and a great way to start an argument. In the most literal sense of the word, my comment offers some justification for these salaries because yours appears to discredit them.
I do have low regard for the engineers in question (low regard in terms of their ability and worthiness of salary, obviously not low regard in terms of their person). The majority of engineers in SV are working on products that primarily exist to serve advertisements to customers. They don't deserve $200k+ for that, and it makes me sad that society has decided these are the people that are paid this much while teachers and nurses are actually starving.
You say that self-driving car engineers deserve it? Really? Show me the 22 year olds that have contributed meaningfully to self-driving technology. But you can't. Because the people making the meaningful contributions (read: worthy of being paid $200k+) are much more experienced, have been working in the field much longer, and are much older. They are not 22 year old new grads.
>Calling someone defensive because they disagree with you is uncivil and a great way to start an argument. In the most literal sense of the word, my comment offers some justification for these salaries because yours appears to discredit them.
And claiming that someone is accusing blame (when they haven't) is also uncivil and a great way to start an argument.
Citation needed.
https://www.washingtonpost.com/news/answer-sheet/wp/2018/06/...
https://www.americanprogress.org/issues/education-k-12/repor...
https://www.washingtonpost.com/education/2019/02/21/why-oakl...
https://www.washingtonpost.com/news/answer-sheet/wp/2018/04/...
Did you miss the entire #ClearTheList campaign last month for when teachers started up school again? If so, the tl;dr is that teachers were having to ask their friends and family to buy school supplies for their classrooms because the teachers could not afford to do so themselves.
Amazon, ironically, created an entire section of their site for such lists. Does it not seem even a little bit of a problem to you that Amazon, one of the richest companies in the world, with some of the richest employees in the world, rather than using some of that wealth to help the teachers, actually created a service where Amazon actually profited off of the fact that these teachers needed assistance buying school supplies?
>Taking a second job does not mean the alternative is peril. I could take a second job to afford a better Ferrari but that does not mean I can't afford a car. Try again.
We aren't talking about teachers taking a second job so that they can afford niceties or a new car. We're talking about teachers taking a second job just so they can afford rent. Many of them are on federal subsidy programs just so they can afford food.
I showed you multiple links that show evidence of teachers being deprived of resources, aka starving. If you can't accept that, then you are not arguing in good faith and I'm through trying to have a discussion with you. Please try to abide by HN guidelines in further discussions.
Yes. The difference (aside from the fact that this particular post is specifically about SV, not about law and finance) is that I have never seen lawyers, doctors, or even investment bankers (although yes I have seen Wolf of Wall Street) be so casual about the fact that their salaries are so high. In another comment in this thread, someone suggested that having an extra $5,000 disposable per month was not a lot of money. That is absurd to me, and I have never experienced any of my doctor or lawyer friends have that same attitude.
What "lot of money" means is entirely relative to how much money you have because for most people it means "would it translate to large difference in lifestyle".
Also, if we are talking about the comment by refurb, it said "rolling in cash" which does not carry the same connotations as "lot of money".
Yes, and my entire point (or at least, the one started by the original top level comment) is that SV has strayed really far from the typical level of "relative" that most of the rest of the country operates on.
I saw somewhere else in the thread that you yourself are a new grad, so I'll chalk this up to lack of experience but on sufficiently large products it is trivial to make incremental changes that will produce more value then your salary. In my own career I saved a big tech company 250k in reoccurring costs with a 9 month project I completed as a junior. Yes, that number is a rounding error for a large company but the value is clear.
Additionally, perhaps you have never built a team before, but the value of a potential employee extends beyond their year-to-year output. If, for example, I have great confidence that a currently junior hire will output ~$1M of value over a four year period than I am willing to overpay that first year as they grow and develop.
This isn't going anywhere interesting and I am uninterested in continuing the conversation further. Have a nice day :)
(There is a certain irony to me about this back and forth. A large portion of my personal time is spent volunteering in an organization that agitates for unions and other forms of direct action aimed at tackling the gross inequity of this society head-on. You're clearly keyed in to a real and present problem, but rather than suggest any solutions you've decided to whinge ineffectively about... developer salaries?)
Chalking it up to it being the "market rate" sort of ignores how the market has failed for these other professions. They have to deal with the cost of living just like people in tech. The issue with the new grads, as the parent pointed out, is the attitude. Most could care less about this. That deserves critique.
I should also add that this dynamic does play out in other parts of the country. In other states in the US with much lower costs of living, nurses and teachers for example still have an average salary that is much lower than that of those in the tech industry, especially software development.
One difference that stands out to me is that the supply of people who can perform the job is constrained.
Other professions may be crucial - indeed, the truck drivers who deliver supplies to all stores from which we purchase daily goods are crucial - but that job in particular can be performed by almost anyone with minimal training.
Words like "crucial" don't have much meaning as far as determining job compensation: it's a supply/demand interaction. If the supply of people who can perform the job is not constrained, because the job is relatively easy to get into, then that will suppress the compensation.
It's difficult to obtain a computer science degree and perform at the level required to solicit job offers from the kind of companies that pay new graduates $200k. Imagine for the sake of argument that these jobs require an IQ of 125 or higher: then only about 5% of the population will be capable of performing at that level. (This is just an example. I'm not saying that I think programming has a particular IQ requirement.)
I showed my relatives how you 'follow the line of execution' in a program running down all the instructions. They sat back in shock, thinking how alien that job would be and how so few people are probably able to do that, and that i should be lucky (?) to have the skills to think that way.
Don't forget, too, that good teachers are experts in the subjects they teach. Teaching computer science or math well requires the same facility with "abstract symbol manipulation" that working as a software engineer does.
I see a lot of this "well it's not actually money, it's just $150k worth of stocks" reasoning to hand-wave away the absurdity of the high numbers, but it's silly to me. $300k is 300k, even if you have to submit an extra form once a month to convert the stocks to cash.
I imagine the reasoning is because at the end of the day, in most discussions, it hardly matters the technical aspect of if the money came from a signing bonus or a stock option. $300k is $300k.
> There's a difference between guaranteed comp and variable comp
All comp is variable since you can be fired or laid off at any time.
If you are experiencing disdain because of this, you need to look inside yourself and see what needs to be fixed in your own thinking. Envy of new grads is not their problem, it is yours.
I have seen Americans casually discuss what cars they own and what cars they would like to buy. I have never once chastised them and asked them to think about the homeless and poor kids in Africa before casually discussing cars like an everyday thing. For ref, my family was too poor to own a car growing up.
And why do you say that as if it's a good thing? Perhaps its this exact attitude of extravagance and wastefulness (especially when taken to extremes like in SV) that has led us to the exact income disparity issue that so many people (many of which are in SF) decry.
Of course I'm not saying it has to be top of your mind all the time, but when we're in a post that is explicitly created for the purpose of discussing how high salaries are in SV, it is disingenuous to try to shut down discussion about how they might be too high.
So you are recommending Americans should stop buying/discussing cars and SV new grads should stop accepting/discussing high salaries because it is "wasteful and extravagant". I am trying to look for some element of logic in your reasoning but I can't find any. Now is a good time to start a discussion on envy.
At no point in my comment, or any other comment, have I said, suggested, or implied that anyone should stop buying/discussing cars or that SV new grads should stop accepting/discussing high salaries. In fact, the entire point (as stated in my previous comment) is that this is a discussion about high salaries, and I am simply discussing the fact that the salaries are high.
Your interpretation of my comments is clearly in bad faith.
> It makes it even worse to see the casualness that people in this thread are talking about $200-300k+ salaries,
> This is the type of attitude that I fear really makes Silicon Valley outsiders have a good amount of disdain for SVers.
>>I have seen Americans casually discuss what cars they own and what cars they would like to buy. I have never once chastised them and asked them to think about the homeless and poor kids in Africa before casually discussing cars like an everyday thing. > And why do you say that as if it's a good thing? Perhaps its this exact attitude of extravagance and wastefulness
If not, I'm going to stop this discussion because it's probably just going to devolve into incivility from here.
EDIT: Can't respond to below, but private school teacher salaries are lower than SF USD salaries (when you include health, pension, housing).
300k for a new grad is not something I've heard of, that's a tad high even for phds. For an undergrad, that would be something approaching an acquihire. That person is being hired for a specific and rare skill, not as a back bencher. A lot to live up to.
Even 200k is very high for new grads. Think "strong student at MIT/Stanford/CMU with proven track record of performing very well during internships, maybe some research publications, and multiple internal stakeholders vouching for them". In other words, perceived as "potential deadly weapon to a competitor and/or a possible founder", not "model employee". That is why they're being paid well.
Below 200, keep in mind that 150% of 80 is 120. SF sucks. NYC isn't much better.
Teachers are underpaid. Not sure how that's relevant to whether some other group of people is overpaid. It's not zero sum.
As for researchers, in CS they do well for themselves. Don't worry.
I think you are conflating what is possible with what is normal, and in the process under-estimate the amount of time and effort some people choose to invest into themselves during their 4 years of access to the best and brightest minds in their field. Speaking of, MIT gets disturbingly close to 6 figures all in these days...
300K-ish total comp is a typical starting package at the big tech companies now. 150-160K base salary, 30K bonus target, and 100K stock grant maturing per year gets you to that ballpark.
Good for those kids.
FWIW it's still fair to say these aren't normal. Plenty of students from top schools don't get offers from the top cos.
Obviously there’s still disparity but it looks like a new middle class is forming and we want that, no? Also keep in mind that anything less than 200k means you can’t even buy a decent sized house where you work.
Surely the problem is that those companies are earning absurd amounts of money while contributing very little to society. They've got billions stashed offshore that they literally don't know where to invest. Even after paying this much to grads.
As a 22 year old dev, "valuable" can be defined as writing code and building products while working 60+ hrs a week, which is what many do in SV. As you age, you write less code and contribute to building products in different ways like architecting the platform and thinking about the business more than the product itself. This is what experience gets you as you age.
I think you're saying that the later deserves more compensation and no 22 year old is worth $200k. I don't think that's true. And most of SV doesn't think that's true. SV likes people that can build and make things, and will pay someone handsomely to build a product and iterate.
My team of a designer, product manager and two software engineers built this. We created millions of dollars in new revenue for our company.
Prior to this another off-shore team had tried to integrate something similar from our partner's competitor. They failed to complete the integration.
This is why good software engineers are paid so much.
Tech jobs are probably the best combination of pay/lifestyle balance at the moment.
None of these are particularly stable or relaxing.
A few faculty with tenured, hard-money jobs might be able to kick back and relax, but those positions are the unicorns of academia.
Everyone else is scrapping to bring in money, just so they can keep their jobs. A lot of places, especially medical schools, expect faculty to cover most of their salary from external grants (~15% of which get funded). I would bet a lot more grad students are burning the midnight oil than FAANG engineers too.
In other parts of this thread, an SFer mentions that with a salary of $300k, he saves $100,000 a year after paying for his 'expensive hobbies' without even trying . Another commenter says they have ~$13,000 per month in disposable income (after rent in a nice apartment, utilities, and food). Thats certainly not "scraping by" to me.
It's different, if you're moving to here from another area you're not going to be able to get one of those rent protected rentals.
According to a tax calculator, a $200k salary in SF is about $130k/year take home, or about $11k/month.
After rent and expenses, that's still $5,100 in disposable take-home pay every month. That's not scraping by.
Basically, if you want to continue earning at those levels, without sacrificing your life to work, you're locked to living in a few select places. In SF, you need to earn almost $180k to afford a mortgage.
If these guys are contributing 0.1% maybe I was underpaid ;)
Same way how .io is not exclusively the British Indian Ocean Territory ?
To be clear, anything you directly contributed from your paycheck is yours and isn't subject to vesting. That's always your money. The part that may have vesting rules is the employer contribution.
Do people really get a lump of money just for agreeing to come work there - while they could just leave on day 2 (or day 1) and pocket the thing? Or - is it like a higher first salary? Also, if the position is highly sought-after - isn't it a bit weird that a signing bonus is offered?
Some signing bonuses help compensate for losing bonuses or unvested stock at a company you're leaving.
Signing bonuses are also great from a company's perspective, because they're a one-time payment that may get you to accept a lower salary. From the employee's perspective, they may be good or bad depending on your needs; consider carefully if you'd rather negotiate for a higher salary instead.
It's also been most common for new grads I think. Presumably, to help them get a jump start on student loans and get set up comfortably coming out of college, which is of course a bigger problem in the US than anywhere else.
But it seems to be becoming more common for mid-level and senior engineers as well, in these cases I think it's basically a loophole to make up for the fact that bay area engineering positions are continuing to get more competitive to fill, and for whatever reason companies don't fully want to acknowledge this and increase their official pay bands faster.
E.g. in the oil industry, a significant chunk of your compensation is usually a cash bonus. Equity is reserved for C-level.
The typical starting salary for a new grad PhD or MS in geoscience at the majors is around $110k/year. That usually comes with ~$15-20k signing bonus, that you have to pay back if you leave within two years. However, you don't get an annual bonus your first year. The bonus is ~15% at that level, so it works out to be the same as if you'd gotten your annual bonus your first year.
It helps with any incidental debt that was accruing (separate from student loans), as well as immediate expenses related to the lifestyle bump (e.g., move to an apartment that would pass inspection). Which also benefits the organization, by unburdening the hire of some of those distractions from work.
I suppose a requirement that the employee pay back the bonus if they leave within a certain period is additional incentive for the employee to be genuinely interested and committed, not intending to job-hop for the next slightly-better salary or more promising lottery ticket.
Also, academic research jobs should be high-pay! It's just that the unionization levels are too low.
In today's job market, in software engineering, it's the applicants that are highly sought after. So the signing bonus is used to make the offer more appealing in order to compete better for talent.
In a weaker market, signing bonuses could also be used as a consolation for a lower salary offer.
(Not an accountant, just someone who’s spent time trying to guess what the stock in my husband’s company might be worth at vesting for the coming year in order to figure out what we might have to pay in estimated taxes, and to figure out where that money might come from as you might be in a position where you can’t sell it to cover the taxes!)
If you are entertaining an offer from Google, Apple, Netflix, Amazon, etc., when your shares vest, the default option is usually "sell to cover", which means they will automatically sell shares to use as a tax withholding. Everything will be on your W-2, no estimated taxes needed.
Companies like Google may handle things differently, and companies that deal in RSUs may as well. My point still stands that you need to understand the tax implications of your offer.
Taxes incurred upon vesting are income taxes. Even if it’s not cash in your pocket, Uncle Sam wants his cut!
RSUs, bonuses, etc. will likely be withheld at the IRS supplemental rate of 22% (37% once employees receive >$1mm of it in a year), whereas your marginal rate could easily reach above that depending on how much equity and bonus compensation you're getting.
In your first windfall year, the IRS has rules that will prevent people from being hit with overwitholding penalties. After that, if you don't pay at least 90% of your calculated end of year taxes, you're going to see a penalty.
My advice to _anyone_ starting off is to just talk to a professional when equity and bonuses are involved. It is going to cost you money, but it is going to save you money in the long run.
Can you explain this situation?
As I see it, even in the wild case where your company's stock explodes, if your brokerage is "selling to cover", you will more than hit 110% of your previous year's tax bill (since you are paying 22% tax on those shares). Yes, you will get a whopper of a tax bill, but you won't pay penalties on it.
Btw, I don't know why you quoted "just handled" when I didn't use those words. I wanted people to recognize what "sell to cover" means, since usually when you start with a company you have to create a brokerage account and they will ask how you want your taxes handled.
This can happen without triggering the 110% of previous year portion if you're regularly vesting a lot of equity - the more you vest, the farther 22% is going to be from your actual marginal tax rate.
I used single quotes instead of double quotes around "just handled" to quote the idea and summary of what you were saying - that it would be handled automatically by the brokerage - and not as a direct quote
$115 + $60 + 15% of salary bonus = ~$192. Numbers in thousands.
There are new grads making even more at Jane Street, Two Sigma, and Citadel
Once someone at my undergrad didn't believe my very average new grad TC... the information gap is insane.
I am no tax expert, but my read of the IRS rules put restrictions around when you can buy or vest the next batch after doing a harvest. This comes in very handy if the company goes through a rough patch.
* Sold X shares are massively underwater, and
* Within the same period, vested Y shares, where Y is a large fraction of X
This is a pretty good summary, IMO. I hate exploding offers as a candidate, and also dislike them as a hiring manager. Unfortunately you do get some candidates that hum and haw, drag their feet, or shop your offer around for something better. Which is their prerogative, but it wastes your time and delays your hiring process.
I think honest and open communication is key here. Don’t go silent on the offer, or be vague - tell them you have another interview, and you want to wait to see if you get an offer. If they don’t want to give you an extension and try to strong-arm you it’s a pretty good sign that they know they’re under-offering (and, also, gives you some insight into the nature of the people involved).
Still, it’s not a clear-cut signal to walk away, and I like that this section captures that nuance.
Can somebody share an estimated figure?
Once all is said and done (all stock accounted for and distributed on a weekly basis rather than on the vesting cycle) and the expenses above are taken out, there's ~11k left over a month. This is post tax.
lol FML...
The only thing I miss is that there's a lot of diversity in bigger companies you don't find in startups. Here, everyone is like me :D
I'm pretty confident if I was making 2-3x what I am now - I would stay with that. As it stands - I cannot afford to continue living in silicon valley on this current salary.
Note also that "savings" are often strongly tied to share price performance. If you were a mid-career senior engineer who signed a standard $600k/4yr RSU deal at Nvidia in 2014 then by 2018 you were sitting on potentially $8 million.
EDIT: I can't respond to the comment below, so here's the other thing: rent control guarantees no rent changes, but you don't need it. Personal landlords don't change rent that much, often they prefer keeping tenants and handling cost pass-throughs rather than raising rent to maximize revenue. I live 4.5 years on a $1.5k rent / 1 br in Portola that terminated only because I moved away from the Bay (back now).
For me I only spend about $3-3.5k/mo including rent, all bills, flights home and vacations, and other crap. So my savings rate is relatively high
The luxury apartments are so expensive too! Renting one bedroom in a two bedroom is comparable to having a non-luxury one bedroom.
Wrt to luxury apartments the optimal strat is definitely to live in larger units (3+ bedrooms) and preferably a couple or two as well. You can get your rent down pretty low while maintaining a pretty high standard of living
Solitude and your own space comes at an outrageously high price here, sadly. But I pay it cause I can't live any other way sanely.
For example, one recent offer from a big tech company was for a 6 month vesting schedule with no cliff. Most are switching to quarterly vesting schedules with no cliffs.
I wonder if they'll bake the bonus in. Getting those $100k signing bonuses are pretty nice, especially since some companies give 25% or 50% before you start, which allows you to do a trip. Plus $100k added into a 4 year vesting schedule is a pretty large opportunity cost (assuming you could grow at 7% a year, which is admittedly aggressive, is leaving ~$30k on the table).
One, monthly vesting is strictly better than less frequent vesting. So once one firm (think it was Facebook?) started offering it everyone else in the same pay scale had to, to compete.
Two, the cliffs made it optimal for people to leave right afer the cliff, then take the signing bonus at another company. Removing the cliffs makes it so there is never an “optimal” time to leave
On the upside, as an hourly worker, you would get overtime if you need to work > 40 hours in a week, and typically get extra pay for work-related travel because it entails working outside regular hours.
As you likely know, salaried employees can be called upon to work more than 40-hour weeks for no pay increase, and don't get extra pay for flying (say) on Sunday night to a Monday-morning work-related meeting.
IIRC, increased scrutiny of this distinction came about because people who had "salaried" positions (at relatively low pay, with limited scope of responsibility) were being asked to put in extra hours, and there was a lawsuit.
At my organization, BS-level new grads will be on-boarded as Overtime Eligible (i.e., hourly). Within 1-2 years they will in almost all cases be promoted to the next career level, which is salaried (also known as "Exempt"). PhD-level new grads are on-boarded as salaried.
Hire me where I live already, with my network of friends and loved ones. Where my cost of living is low and my lifestyle is easy going. Guess what, I work better when I'm in my home office. I get stuff done.
Put me in the most depressing cubicle farm or highly distracting shared space and its a lot less likely.
I really don't understand the "you need to go to the office" mentality anymore, especially with how easy it is to have a video meeting.
You're assuming everybody speaks and breathe with the same wavelength as yours over the internet.
You be you. No need to judge other people as weird.
Most people could not do this type of mental work.
Facebook L? Amazon Apple Microsoft Google Netflix
Might make more sense to change it to FLAAG
> There can be other facets of a company that should influence your decision, such as what type of healthcare they offer,
Almost universally, company health care SUCKS. Look for major medical. If it's not there, don't bother. Save yourself the 7$ a month they will rebate you, if you opt-out. JPMorgan? Trash. Experian? Trash. etc
> What the 401k matching looks like
This is important. Generally % of paycheck up to a limit. It does take a chunk from your paycheck, which is you saving for yourself.
> whether they offer a mega backdoor Roth, whether they allow auto-sell of your vested stocks, whether there’s an employee stock purchase plan, and whether they offer free food or gym.
This is all marginal and rare in my experience. Other than a little gym you can pay for or some snacks (which will eventually be abused and changed if the company is growing) or Kombucha on tap or whatever is not a consideration for me.
Anecdata, but I have worked for two of the big faangm companies and myself and every coworker I am aware of had a signing bonus.
I have had multiple throughout my career and so have my peers. This is actually quite common for engineers and talent on the higher end of the skill bell curve.
Signing bonuses are not not unusual at all and, again I can't stress this to the reader any further, they are awarded consistently and constantly to top performing engineers and talent in their fields.
You never know until you ask but I would expect it to be rare.
I've interviewed hundreds of people in Southern California, some who came out of google (does give signing bonuses) or Amazon (rarely signing bonus) and it has happened that Blizzard tempted some people with a little bonus...but these are uncommon.
People who jump company to company (google to amazon and back) don't get bonuses (as rehires), although that's outside the topic of "new grads".
> People paying bonuses for new grads is a sunk opportunity cost
Sure but FAAMG aren't really trying to pinch pennies. Signing bonuses also usually have a clause where you have to return it, if you don't at least stay a year. Signing bonus as a new grad is a HUGE help to the new grad. When you're competing between FAAMNG, that signing bonus can sway what offer a new grad would accept.
> google (does give signing bonuses)
I'm currently at Google but I had to negotiate the signing bonus. It wasn't part of my original offer.
> People who jump company to company...
They absolutely do.
I'm sorry, are you saying I'm lesser? I don't understand what you mean by this.
I don't think this innuendo helps anyone considering offers at multiple places.
I am curious about standard Bay Area FAANG signing bonuses for mid-senior level. This new grad offer from the post sounds insane to me, regardless of talent:
$115,000 salary
$240,000 equity/4 years, 1 year cliff then quarterly
$100,000 signing
Congrats to the winner of that deal.
AFAIK only Facebook gives 100k signing, and it's usually for returning interns and after negotiation with competing offers (usually other FANG or hedge fund offers).
My direct deposit income is something like $2400 every two weeks. That's after my IRA investments, monthly health insurance cost, metro card cost through my job, etc. I work at Columbia University, by the way.
I live in a rent stabilized 1br apartment in west Harlem: $1500/mo rent. After that I have no major expenses other than food, and I shop at local grocery stores and cook at home a lot. I make my own bread, because I like to, not because I have to. I always feel like I have more than enough money. I put around $800 a month into savings and investments.
I'm even able to travel frequently to Europe, Latin America, and to see my parents in Seattle. I agree with Bradley Kuhn on this one: in general, tech workers are wayyy overpaid.
Considering tech companies earn fantastic profit per employee, the employees are not overpaid at all.
Your call.
Supply and demand doesn't care about what you need to live or what you consider to be over or underpaid.
When I've worked at start-ups in the industry (I've worked in Palo Alto, SF, Seattle, and other places in NYC), it was like, working crazy hours, constant stress and drama, dealing with annoying requirements, and basically working on stuff I don't care about, like mobile apps, vying for popularity, etc.
If a startup wants to pay me to work on these Astronomy simulations I've made, I'd be interested: https://github.com/ccnmtl/astro-simulations (this is what I've done over the past year at Columbia).
If you are comfortable earning what you earn because of the work you do I get it. I looked into working for research universities in the past like UPenn because I'd be working in say cancer research, etc. I get it.