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Comment by nassycheezy | Hacker News Reader

Please take note that Spotify pays sub-market salaries for these cities. The reason being that they do not offer RSUs but instead public stock options without any discount.

- Typical FAANG compensation: X base pay + Y RSUs + Z signing bonus

- Spotify: X base pay + Y stock options (public, so equivalent to you purchasing stocks really) + no signing bonus

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Spotify gives you the choice of RSUs or options or straight cash. https://hrblog.spotify.com/2019/06/13/show-me-the-incentive/

Cool, they must have changed their comp structure then as the previous model was an immediate "no-no".

The pay isn't particularly attractive compared to other tech companies in those cities, but it's still massively better than 99% of other places in the world.

What's the difference, for the laymen

You only earn money if the stock price appreciate

I'm envious of your laymen speak.

Exactly right.

RSU means they gave you the stock at price X. Options mean, they gave you the right to buy the stock at price X sometime in the future.

so its like call options where employer eats the option fee?

Yes, except I think they usually just issue new stock when you exercise and dilute the existing owners instead of actually paying someone else for an option.

Say Spotify's share price is $100, and as part of your compensation you are given an option to buy 100 shares at $100 in 5 years time

If Spotify in 5 years time is $500, you buy 100 shares for $10k, and immediately sell them for $50k, making a $40k profit (or you keep them).

If Spotify in 5 years time is $102, you buy 100 shares for $10k and sell for $10,200, making $200

If Spotify shares in 5 years times is $90, you don't bother buying the shares, but your options are worthless.

Now imagine you were given 100 shares instead, but couldn't sell them for 5 years (an RSU - or restricted stock unit)

In 5 years time, if Spotify is $500/share, your shares are worth $50k

In 5 years time, if Spotify is $102/share, your shares are worth $10,200

In 5 years time, if Spotify is $90/share, your shares are worth $9,000

Yeah this model sucks, unless they give you A LOT more of these options than they would give you RSUs. Then it could work out, if you believe in the company.

Stock options aren't equivalent to just buying stock.

They are equivalent to letting you travel back in time to the date when the strike price was set to buy stock based on your future knowledge (and using your future money).

That's obviously not worthless. It's much harder to determine the value of than RSUs, but it's potentially very valuable.

This is ridiculous. I find well paid devs super arrogant. Some of them made 150k, 200k, 250k - while other people, also qualified, make salaries that are not enough to start a family and have a decent life.

Fully agree, this is why I didn't put numbers and only mentioned pay structure and market rate.

What are you trying to say? Anyone can demand a greater salary if their qualifications are in demand. If they are not - they should consider working on learning new skills which are in demand.

What would you recommend now?

Other than learning skills (getting new qualifications because your current qualifications are not in demand) which are in demand and pay what you wish to be paid?

> Some of them made 150k, 200k, 250k - while other people, also qualified, make salaries that are not enough to start a family and have a decent life.

I don't understand why they are arrogant. Is it because despite making that level (which is objectively nowhere near the ceiling for global SDE salaries), they still want more? I can understand the cognitive dissonance of viewing that number without context, but I think it might be worth taking a look at something like levels.fyi.

Look at engineer salaries at FAANGs at top hubs such as SF, NYC, LDN. The reason they are so high is because the companies need to pay that amount to get access to the talent they need to run their companies. If they could pay less, they'd save billions (maybe trillions), so they would have already tried that. And indeed they did, before they got taken to court for collusion lawsuits.

The truth is, as high as engineer and tech salaries are, they're high for a reason. They get very expensive things done. I don't see anything arrogant about that. On the contrary, what I would find arrogant is expecting them to do that without taking their fair share.

250k is about median, I wouldn't consider it well paid.

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