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Comment by jb1991 | Hacker News Reader

jb1991

> most people are making more money than they know what to do with

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.

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The OP of this thread, who lives in SF, mentions he has about $11k left over every month after paying for rent and living expenses, and after spending $1200 a month in 'fun' expenses.

See: https://news.ycombinator.com/item?id=20943699

Yes SF is expensive, but these salaries are absurd.

Apparently he's including equity in that figure, not just salary. With that in mind, those figures not super out of the ordinary for devs in SF.

Which he should, for liquid stock of a publicly traded company.

It's still not the same thing. I worked at a company whose stock price dropped by 40% in the span of a year. If someone is making $100k/$100k stock and equity, then that can easily become $100k/50k. It's even worse than that because you paid taxes on the stock at the vesting price and not the sell price (you can deduct this as a capital gains loss, but it's still money you're not getting).

That poster is definitely has good compensation, but TC needs to be broken into salary and equity.

This is one of the reasons why I like working for Netflix. My compensation is (almost) entirely base salary.

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.

>It's even worse than that because you paid taxes on the stock at the vesting price and not the sell price

How is this worse? You can always sell the stock as soon as it vests, with zero tax implication.

Not if you work in a private company. And even if you do sell stock immediately, if the stock price goes down so does your actual compensation. Equity compensation is less certain than salary compensation.

I suppose, but how many late-stage private companies (i.e. late enough that you're getting stocks instead of some kind of option or other you-aren't-technically-gaining-anything vehicle) are having wild downswings in stock price? I'm not aware of any, and while I could imagine there are some I would assume it's a relatively small number, but I could just not be in the loop.

Dropbox and Twitter both experienced drops in stock value of ~40%. Uber and Lyft both lost a third of their stock value since July. Washington is consistently taking about tougher regulations for tech companies. I would not assume that tech stocks are going to be stable in the near future.

The companies that I am aware of award stock units based on their monetary value. If the stock is worth $100/unit, and your TC is to get $100k in stocks, you get $100k in stocks. If the stock falls to be worth $50/unit, you still get $100k in stocks.

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".

That's not how it worked at the companies I've been at. Your stock grants were determined at the time you join, and your refreshers are determined in January or February. You are granted $X worth of stock, so in that sense the stock units are based on monetary value.

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.

They award stock units based on monetary value, but that calculation is done once sometime around when you join. So a drop pre-joining would be accounted for (maybe beneficial if you expect the stock to rise, but if it drops afterwards, you would have a loss.

Normally there is a vesting period before you can sell any equity.

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.

This isn’t normal. They do often have a minimum compensation target but it’s going to be a lot less than your advertised comp. once your stock is granted the number of shares is locked in.

Is there a time period between being awarded stock and being able to sell it?

It can also become $100k/$150k. Such huge drops that you mention will be exceedingly rare (as will huge jumps that I mentioned), and are in any case capped by the vesting interval.

Really, anything but taking the value of stock as it is when discussing total compensation of well-established publicly traded companies is just noise.

Spreading equity across several weeks can be very misleading when you’re in the middle of a period where the stock price is shooting up.

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.

>Spreading equity across several weeks can be very misleading when you’re in the middle of a period where the stock price is shooting up.

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!

Responding to sibling: Five years to save up for a down payment on a $1.5mm home is incredibly fast. You seem to not think it's a lot of money. Tidepod's main point in this post (and throughout the thread) is that SV tech people don't understand how much money they have relative to the average person, as reflected in how they speak and think about it. This is a perfect example of that.

Cool.

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.

It’s important to note I said “in SF”.

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.

My point was that $5k a month is a lot of money, even in SF! $5,000 a month is more than the take-home income of the average worker in SF.

Yikes. Dig the name btw.

But you must also look at how much space belongs to that one individual for the rent they pay, vs elsewhere; not to mention, California's very high taxes. It's common for those with seemingly high salaries to have very little space or actually share it with many people, and if you lived like that in other places you'd also end up with more leftover each month, even with a lower salary.

ok sure, let's imagine that this specific individual decides to spend $2k more on rent to have a place just to himself, which would bring his net after all expenses to over $9k. Still a lot, so the housing costs don't make that much of a difference here.

But rent is just part of the picture, and 2k is a low estimate to match actual quality of life. What about the much higher taxes, much higher prices for other aspects of living?

He’s gonna need that extra $2k now that the SALT deductions are gone.

that's why I said "2k MORE", on top of how much he is already paying for rent by sharing a place with someone.

OP mentions he pays $2400 in rent, which would get you a pretty decent studio or half of a 2br apartment in some very nice places in SF. The $11k leftover is also after taxes (and also after 'fun' spending and utilites/food).

That's also easy to forget ;) 115k ain't going too far in that respect. The U.S is a different place as well, and even that 100k signing bonus won't go that far in replacing student debt. I was surprised that he's a USC grad with a .ca TLD.

Edit: At an 11k surplus every month, I take the above comment back.

My starting salary was $110k, and I couldn't sell any stock for my first 3 years. Living in SF was not very hard, I opted to live alone in a studio costing $1.8-1.9k. I could still save about half my post tax income.

How long ago was this? And do you own your own home now?

That was 4-5 years ago. No, I don't own my own home. The SF real estate market is inflated, IMO, and I could easily see housing prices drop once the populace has had enough of restrictive development policies. Salaries are high enough that I'm still saving good money while renting.

> and even that 100k signing bonus won't go that far in replacing student debt

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.

> $100k takes how many years of saving money

According to one poster in this thread [1], it takes 1 (one) year for him to save up $100k without even trying.

1: https://news.ycombinator.com/item?id=20943752

He's a unicorn. The rest won't be able to pay up $100k quickly.

Not according to levels.fyi

Which has mostly unicorns filling the data...

+1 to give parent commenter some perspective someone is looking at ~$1200USD a month just to share a bedroom with someone else, closer to double that just to have a private room in a shared home. Approaching $4k to have a place to yourself.

Most of my friends pay $1500-$1800 for a bedroom in an apartment. Those paying $2400 all have 1BD or studios.

Check Zillow for prices.

I am currently living in a gigantic 3BD for $5200.

It's context that I had, but is easily forgotten, especially with the .ca TLD. There's taxes and student debt to service as well—probably.

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