Comment by ededdeddy | Hacker News Reader

Comment by ededdeddy | Hacker News Reader

Parent Full thread

This is commonly brought up but isn't correct simply because what matters more is generally the absolute amount of disposable income you have, not the percentage of your total salary.

If you make 400k / year (typical for a FAANG senior engineer, which plenty of people people reach in their mid-to-late 20s) your expenses might break down as:

- 160k taxes

- 50k housing (luxury 1 bedroom in SF or Palo Alto)

- 10k food (eat at work on weekdays for free, $200 a weekend to eat out at nice restaurants)

- 10k transportation (Tesla Model 3 like everyone else)

= 230k total

So you end up with ~170k a year of disposable income while living very well. If you were willing to cut expenses to the bone (roommates is the big one, cook for yourself, old car) you'd probably end up at around 200k of disposable income. 170k-200k is more than most software engineers can hope to make in gross income in the Midwest. Sure, you might not want to buy a house for $2M, but with just two years of savings you can move to the Midwest and buy a house outright. After 10 years (remember, most of these people would be in their late thirties) you could easily save ~$2M before investment returns and retire to a low cost of living area.

For people who are not tech workers and live in the Bay Area making <$100k / year, there is definitely a great argument that the cost of living is way too high. For software engineers, it's worth remembering the cost of living is so high only because software engineers get paid so much.

Wow, I swear every time I read one of these salary threads the "typical" salary for a FAANG engineer jumps by 50k.

Not doubting it, it's just fucking nuts. I do wonder though what percentage of engineers are making that type of money though? How typical is it really?

Percentage of engineers, or senior engineers?

Overall, I'd guesstimate 40% make 400k or more, with most senior engineers making that much. Not at all atypical, particularly if you've been at one for a couple years.

Is this really accurate? And even if total comp is somehow $400k, how much of that is equity, and how many senior engineers are liquidating it every year to get $400k in cash? That seems wildly overblown. And that equity shouldn’t be factored into the above breakdown anyway, at least not in the taxes calculation!

Equity is a whole lot of that. And yes, people liquidate it immediately. RSUs count as income.

I'd say most of the FAANG engineers I know cash out their RSUs when they vest, or within about a year or two after.

RSUs are not the same as private equity in a startup. While they are subject to market fluctuations they can be liquidated immediately on vesting (annually then frequently quarterly). They are taxed just like regular income... because they are regular income.

As to how many engineers are liquidating at vest? It’s honestly the most sensible option to diversify quickly since you don’t want your investment, savings and income all tied up in one company.

So you're saying 40% of FAANG engineers (not just seniors, but all engineers) are pulling in 400k? That's nuts... I swear the number being thrown around for FAANG was ~250k not that long ago. Next time I check one of these threads it will be 500k....

250k is probably the average figure? Lots of L3s and L4s out there (more of them than L5 and above), who bring the average down.

$400k is pretty high for senior. Most senior FAANG engineers will be in the $300s somewhere, rather than north of $400k.

> Wow, I swear every time I read one of these salary threads the "typical" salary for a FAANG engineer jumps by 50k.

Go look at the 2-year or 5-year stock charts of any of the FAANG companies and you'll see why.

An engineer who started working at a FAANG company several years ago got some RSU grants, and the value of the unvested shares grew a lot since then. On top of that, refresher grants every year or two are pretty common. Total compensation really ramps up after a few years even if you don't get promoted.

So are the RSU grants typically done as a fixed number of shares or is it adjusted based on how much those shares are worth on the market? For example, if the stock price tumbled would new offers be granted more shares to make up for the collapse in value to keep the overall compensation the same?

I'm sure it depends on the company, but my company grants a dollar amount and figures out how many shares add up to that amount. If the stock price tumbled I would get more shares next time I get a refresher grant, because more shares would be needed to add up to the dollar amount the company would grant me.

If the stock price collapses, many employees lose their homes.

Nobody knows what will happen when the inevitable finally happens.

Maybe the companies will step in and make employees mostly whole. Maybe they will have to in order to keep their best people.

Or maybe the gravy train will end.

L

All anyone can tell you for sure is that the companies will continue to pay what is required to get the people they need, and no more.

The point-in-time percentage isn't the best metric. These companies hire a huge number of recent grads each year, with sub-200k total comps. Need to look at expected 5+ year compensation to get a better picture.

Using FB as an example, engineers are expected to make it to E5 within a set time period (~5 years) or they're fired. So anyone still employed after that time is at least an E5. The E5 comp target is 330-400k. So yes, anyone still employed after 5/6 years is making at least that much.

Its not expected nor required to go beyond that, so that will be the career top for many. E6 is a 500-600k range, and I've no clue about E7-9.

Google is similar, and there are equivalent levels at Uber, Lyft, etc.

And then there's Netflix which only hires senior engineers and has a single level with a huge comp range. Pretty much 100% of Netflix enginners are making 300k+, most 400k+. But, Netflix is also an all cash shop - need to pay for benefits out of pocket, buy stock out of pocket, etc; so not 1:1 comparable to others.

Exactly this.

LOTS of grads do not make it to the $500K land. The FAANG companies have also been around a bit, so now google / facebook etc just have a fair number of more senior folks who are making good money. So pay is out of control but these companies make so much gross revenue (check out apple / google financials) that they can afford it.

Totally annoying if you are not in tech! And sometime you are like, do you really need to be spending x billion on comp to run y website?

I've noticed that, too -- the way the typical FAANG salary keeps going up and up and up and up and up and up and up whenever it's quoted here. I've been in Silicon Valley since 2002, always working for tech companies, either as a technical writer or a web developer, and I have never made anywhere near the "average salary" that HN tells me I should have been making.

Even granting that I'm not very good as a salary negotiator, I suspect an awful lot of software engineers, even out here, are making around $150-200K for their base pay, and are not getting another $100K+ annually in benefits and stock options.

Typical FAANG total comp for senior engineers in the bay area will be somewhere in the $300,000s, with moderate tenure (say 4+ years)

Of that, maybe 60% is salary, and the rest is bonus/stock/etc. The breakdown varies by company, and the non-salary comp is somewhat highly variable.

A senior new hire will be more like $250k

More junior folks will naturally make less.

As someone making ~$100k in Iowa, all of those numbers are crazy to me.

But I also make more than basically all of my friends / family, and manage to save 30-40% of my income each year, so I have to say I can't complain.

As a dev making €50k in Western Europe, your salary is crazy to me. :)

And I'd wager COL here is also higher than Iowa.

As someone making £27k in the UK your salary is also crazy to me. The kind of numbers that get thrown around really have no meaning to me.

As someone making 18k€ in Eastern Europe your salary is also crazy to me. And I manage to save >30% of my salary and my quality of living is fine.

I've earnt that as a monthly figure as a London contractor.

There is a market if you're willing to play the game.

Nice. What kind of contracting gig did you do?

DevSecOps consulting for a large brand that was hacked and a bank undergoing a transformation. Managed it for about 2 years, before that the standard rate was £700-£800 p/d.

Did have a large transformation under my belt and critical national infrastructure as feathers in my hat.

That's above market rates. You'd have to be on £1350 a day. Most contracts I see are £450-£750. How did you swing agency / big consultancy rates as a freelancer?

I sold myself as a one man consultancy without the land and expand bullshit. I hit £1500 a day, which was the max before you hit a world of bureaucracy. It's a lot easier to sit on about £1000-1200k a day.

The intention isn't to brag, it's just to point out there is a market here that can be tapped even if you can't travel to SoCal.

I have a friend who works for a FAANG company. He moved from California to London, staying with the company.

He took a 35% pay cut, and he tells me that cost of living in London is much higher than what he left behind in California.

It made sense for him, because he had personal reasons both to be in Europe and to take the specific open position he took that he wouldn't have been able to get on California, but he was much richer in California.

How many people (actual number) are "FAANG senior engineers" ? I feel like this comp package number gets a lot of attention but my intuition is that it's a rare thing, compared to the number of people working in tech as a whole.

My napkin math tells me about 100-200k engineers at FAANG proper, about 100k more getting paid at FAANG level outside of FAANG (depends on who you include like Microsoft and if you count high-paying startups with high chances of success like Airbnb). Roughly half the people I work with (including first line managers) are "senior" so I would guess about 100k-150k people.

I would estimate that between 10% and 15% of FAANG software engineers are senior or higher.

It does take a few years of being at senior for pay to ratchet up to the $350k range that is typical of long-tenured senior engineers at FAANG companies. A newly-minted senior engineer will be more in the $300k range

That math will change quite a bit if you decide to have a family.

Also, I was under the impression that those 400K FAANG salaries were not that common in the bay area, i could be wrong.

Reply on news.ycombinator.com