Half a million a year for a developer or architect is bonkers.
That's the equivalent of AUD 800K a year. That's more than what the Prime Minister and a cabinet member put together make here!
How can that possibly make sense? For that kind of money you can easily hire 4 senior developers here! Any company "hiring local" at those prices isn't exploring their international staffing options properly...
But at the scale they operate at, it is also relatively easy to justify such salaries. For example, just last month, I saved the company more than a million a year of cloud costs by doing 1 week of cost optimizations for just one of our services. I will create many times that in new revenues/cost savings in the remaining 2 months of the year.
My total comp for year? Barely over half a million. So I'd say they are getting a good value.
I just saved $500K per annum for a customer, after working on the most critical part of a merger between two 10K-user organisations, and I get less then half that.
It's not like it's impossible to get someone that knows how to optimise infrastructure or do complex projects for less than a decent chunk of a million dollars a year! Like other people have commented, they're often making just tens of thousands in Europe, despite having comparable education, experience, and English language skills...
There are also people who do the thing you do who likely make much more. Just as there are folks who did what GP did and make much less.
If $$ is what you optimize for, you can probably find the top 1% of compensation for businesses in your field and work there. For a lot of office workers, there are firms that value their skills and firms that do not. Remember that the comp numbers for Bay Area tech salaries are legit the top 1% globally or some very small percentage.
Consider the difference between an comp "analyst" at a local bank and an "analyst" at an extremely profitable hedge fund.
It's just money in the end and if you make enough to be happy, then the rest doesn't matter. If you want to compete for the top < 10% of compensation locally/globally in your field, then things have to change and it comes at some cost.
It sort of sounds like you're resentful of the american engineer making $500k that you're replying to. But maybe the resent should be directed towards the executives and finance people in europe who make huge salaries just because that's the tradition.
Yeah except the PM and cabinet minister's will pull in 20x later on some board or w/ lobbyists they've been friendly with. That's their stock I suppose.
SAP is one of the primary tech giants in Europe. Their operating profit is $6.2b by comparison (they fit in Microsoft's pocket these days).
Now on top of that, throw in the US banks which are generating enormous profit compared to their European peers, and they also hire tech talent. Throw in Visa, Mastercard, American Express, Square, PayPal, Stripe, etc. Then throw in the US defense contractors. The large pharma & biotech companies. Insurance companies. Huge retailers like Walmart, Costco, Home Depot, Target, Lowes, Walgreens, CVS, etc. Big real-estate companies. Various large conglomerates and manufacturing firms. All of these companies - which generate outsized profits as well - have to compete for tech talent too. The point being, all that demand drains availability and pushes up the salaries that tech talent can command (including outside the bay area).
They definitely ARE all-in on arbitrage. The FAANG megacorps are all pulling in upwards of $2M in revenue per year per coder on average. So what if some of them cost $600k/year?
How does that work with the recent 'they need to return to the office' + anyone remotely working for Facebook outside the US will never make hundreds of thousands as a developer.
That's exactly my point: a dev working for Facebook in Hungary will probably make decent money but it will still be a fraction of what he could be making in the US..
The rough estimates I’ve seen are: $100k USD in MPK becomes about 85k CAD. But also I think they just don’t fill as senior roles in Canada so the upper limit is lower. If you want to make more money, I think it’s worth a shot -- if the offer is bad, you don’t have to take it.
> That's the equivalent of AUD 800K a year. That's more than what the Prime Minister and a cabinet member put together make here!
It is also about what the US President ($400k) and a cabinet secretary ($196.7k) put together make in the US. But far, far, less than the CEO of any public company.
The US president’s compensation is far more than $400k per year including all the post employment benefits. Just the $200k+ per year annuity (inflation adjusted to boot) for the rest of their life is worth millions if they live more than ~6 years, and it only takes 4 years to earn it. Due to his young age, Obama easily got a few extra millions per year just in the value of the annuity.
Check the discussions on Blind. Total compensation discussions are completely bonkers and I believe they are true based on some interviews I had for remote roles in US.
I'm a founder taking a significant pay cut and worked at early stage startups before that. Had a few hot new ML startups try to recruit me and their offers are nowhere near what my friends at FAANG are making.
Last time I was looking for work 8 years ago the gap was nowhere near this large.
Not sure about founders, but if you're looking to hire top talent you need to pay them, give them the promise of meaningful equity. Software engineering is one of those professions where you don't work a 9 - 5 job. I'm constantly thinking about problems at work, while i do mundane tasks like cleaning my apartment, or doing the dishes.
Yes but unfortunately most startups can't afford to compete with monopolies. As the OP mentions I'd recommend anyone considering startups to value equity at $0 unless it's a late stage company with a lot of traction and top VCs backing them.
Stripe being founded 12 years ago with 7 billion in revenue I don't call a startup. Might as well call facebook a startup at this point. Databricks is 8 years old. They are just private.
Yeah that's not a "competitive" difference any more, that's approaching levels of annual compensation nearly a full seed round for a whole startup.
I used to buy into the whole risk vs reward of startups, but the numbers are far too biased towards founders and big tech salaries now for any individual contributor actually paying attention to the market to think about a startup job.
I see these mind boggling sums in the Valley, $300.000, $600.000, can you please translate: how much does that net you per month, after taxes, reasonable healthcare and rent, ideally no further than 1 hour commute and free of black mold?
I'm in Seattle so the situation is a bit better than the valley. But here's a breakdown:
L6 at Amazon, single, no kids:
~$400K TC
$33,333 per month gross
About $100K in federal tax, no state income tax in WA.
$8333 per month
Healthcare: $34 a month for an HSA plan.
$3,650 over the course of the year goes into the HSA, including the employer portion. That ends up being about $205 out of my pocket. This is a bit complicated if you're not American and familiar with the different account types but it's basically money you're saving that's not taxed, but you can only use it for healthcare expenses.
$3000 max out of pocket per year for medical expenses. For all intents and purposes you can assume that's the most I'll ever pay. Out of network stuff makes it more complicated, but my network has essentially everyone.
$250 a month, but you can use the HSA funds from above, so net $0.
Rent: In the Seattle area a newish one bedroom that's about 50-60 m^2 will run you say, $2200 a month. You can go cheaper or more expensive, but that will get you something that's plenty nice. Commute is extremely dependent on exact location, but if you're in the city, the majority of it has a commute time of less than an hour.
$33,333
-$8333
-$34
-$205
-$2200
=
$22,561 income remaining.
I think you'd be able to survive :)
Obviously doesn't account for internet, a phone, a car, utilities or anything else, but that's maybe another $2K a month on the high end.
My salary is just above $200k. After 6% contribution to retirement (max my employer will match), and $25k a year set aside for employee stock purchase program (max I can set aside - our ESPP is really good), I get just under $10k a month in direct deposit.
My rent is $3k a month. My discretionary spending is also around $3k a month. So I save $4k a month (in cash).
I also get around $350k in stock compensation. A bunch get sold off to cover taxes, but I don't sell anymore, as I believe in the company, and it has done well in the last 2 years.
Altogether, I save above $250,000 a year - in vested stock, and cash.
I just put the extra money into regular investment account. My investments account tend to perform better than the rather boring results that 401k accounts give me. Would be different story, if I was allowed to contribute to Roth IRA. I actually didn't know about the backdoor conversion until this year, but that loophole seems to be on its way out.
If you want to purchase a home, you probably need to replace 2k with 4k-5k/month for a mortgage on a home (30 year loan) + ~1k/month in property taxes.
I own a 1500 sq ft townhouse that I bought in 2017 for $480K with $80k down (all from RSUs, which if I had kept in AMZN would be worth... a lot more). My mortgage (refi'd in 2019) + HOA + taxes are $2500 a month.
For one healthcare is usually not an issue because you have a good health plan with an out of pocket maximum. Your employer pays the premiums. Out of pocket you’re looking at about $10k/yr on the higher end, barring big medical problems or issues with your insurer (sadly, always a possibility). Let’s call that $1k/month.
Rent also depends a lot on how many bedrooms you need and how fancy you want to go. Let’s say it’s $2.5k/month (including utilities).
At $300k/yr in California you’re taking home about $180k/yr. So that’s about $15k/month after tax and $11.5k/month after rent and healthcare (you really aren’t likely to spend that much on healthcare. More on rent if you have kids). Not including of course things like 401k which can both lower your taxable income and get extra money from your employer
> Assuming $500k in a big coastal city: $285k after taxes
In Californian coastal city, that is, or in NYC. It’s $305k in New Jersey, and $335k in Washington. And that is if you’re single. If you’re married, with $500k you’re looking at $325k after tax in California/NYC, $338k in NJ, and $366k in WA.
