15 ms·

Paying top employees the highest salaries in the market

256 points by lnguyen 9y ago

Abishek_Muthian 9y ago
The thing with excessive remuneration with startup’s are, it’s highly unlikely one could switch to a better paying job when the need arises. Update : To people who ask why would someone need another job? There are multitude of reasons, a well funded startup which could pay several times the industry standard - when fails; puts excessively paid employees to compete in the same standarised job market. If you live in the part of the world where the HR asks about your previous pay to assess your eligibility for current job, you will soon end up settling for a sub-par(quality) job with standard pay i.e after giving up the ego. Also if the high paying job didn't provide you with necessary foundation to consistently improve your skill set, the moment you are out to compete in open job market; you'll be facing tough competition from better skilled people with standard pay whom the companies would likely prefer. Again, my arguments are based on the fact that you live in part of the world where your previous pay matters for current job interview.
- ceejayoz 9y ago
  Sure, but at $3M a year, sock $2.5M away, live extremely comfortably, and have one hell of a rainy day fund.
  - tehlike 9y ago
    or work for 5-6 years, and retire (while still working for your own sake).
  - dexterdog 9y ago
    I agree but you are not remotely considering taxes.
    - johnvonneumann 9y ago
      At $3M a year, taxes are probably the least of your earthly worries. And also, you probably make enough to get a good tax accountant.
      - travoc 9y ago
        At $3M a year taxes become a more significant worry.
        nhaehnle 9y ago
        The relative amount of taxes paid doesn't really change anymore once you've reached six figures. On the other hand, the absolute amount still increases, which makes it more reasonable to spend significant money on tax accountants. So, if anything, taxes should become less of a worry, because you can more easily let really good professionals take care of it. But yes, I'm aware most people won't look at it rationally.
        charlesdm 9y ago
        If you're an employee, you generally can't optimise much. Perhaps you can take some basic deductions, but that's in. If you take two people earning $1M a year, the employee will in most jurisdictions (both relative and absolute) pay significantly more in taxes than the self employed person.
        walshemj 9y ago
        At the $1M you have much more options to optimise your tax eg in the UK ESI and VCT's become practicable investments which they would not really be at say $70k Just being able to max out your Pension and ISA at $27k is a big win for those earning enough - basically you can put £20k a year beyond the reach of CGT and Dividend Tax per year
        charlesdm 9y ago
  - deleted 9y ago
    [deleted]
  - AFNobody 9y ago
    If 80-90% of it is in stock / options with vesting (as I'd suspect it is based on that article) it is likely only true after the targets / target dates are hit.
    - pooper 9y ago
      > If 80-90% of it is in stock / options with vesting (as I'd suspect it is based on that article) it is likely only true after the targets / target dates are hit. My initial reaction was: Does anyone actually do this? If someone says "salary" package, I'd assume all of it is cash. but then I took a peek. > Top performers can make $1 million in salary and bonus a year, plus options, according to people familiar with its hiring. Total compensation can exceed $3 million. Zhang declined to comment on specific figures, saying most employees prefer stock over cash. So it is $1M in salary/bonus and up to $2M+ in stock grants bla bla (paper that I can't spend). > Zhang isn’t backing off his aggressive plans, despite the controversies over pay and business practices. Asked about one competitor's concern that Toutiao is trying to hire 200 AI engineers, a huge number given the limited pool of talent, Zhang says that's not quite right: "It may be more than 200.” This is the interesting part. at $1M per head, 200 engineers is $200M. It sounds like a lot and it is. I feel like someone is getting taken for a ride and I suspect it is the poor idiots who are taking $3M+ in paper over a little under $1M in cash salary and bonuses. I'd take the $1M cash and save like crazy because this is ridiculous overspending. I cannot imagine why you'd need 200+ data scientists to work on this project. But then I want to remind the reader that I have been wrong before and spectacularly so about Dropbox. I cannot believe Drew and gang are doing so well for themselves. Make sense that I am a poor idiot on the Internet.
      - mywittyname 9y ago
        Because each of those data scientists are a billion+ dollar per year lottery ticket. $3mm per year is a steal when you look at it that way.
    - walshemj 9y ago
      And assuming no dilution or other ways of reducing the value and the Chinese stock market does not even have the protections that the LSE or NYSE have for share holders.
  - pmorici 9y ago
    Don't mean to nit pick but you are going to give up roughly a third of that to taxes.
- j45 9y ago
  Maybe a certain amount is enough.
- ThrustVectoring 9y ago
  Why would you ever need a better paying job afterwards?
  - j7ake 9y ago
    Your assumption is that the position is tenured for life, which is not.
    - adrianN 9y ago
      After you make seven figures for two years you don't really have to work anymore. You can just live off your savings.
- foota 9y ago
  Why?
- foota 9y ago
  I don't understand, how would having a higher pay disqualify you for a position? Has this happened to you?
totalZero 9y ago
Is this surprising?
- vostok 9y ago
  A lot of people haven't really updated their expectations with regard to what the top of market looks like.
shamdasani 9y ago
The desire for more often blinds us. We all are looking for more wealth, and perhaps working for a startup like this will get us there. However, I personally think that talent is priceless. You can't just throw money for top skill. In field like startups, you have to passionate on what you're working on to make it the best it can be. Sure, say I have "top talent". But, what we fail to realize that "top talent" may not translate into more revenue or users. I must be willing to work the extra hours and focus my mind one hundred percent of the time to utilize this talent. And, honestly, I do not think even money would motivate me to work to such a degree if I'm working on something I don't believe in.
- tehlike 9y ago
  true that. Top talent engineers make their companies >20X in profit, no amount of "money" could make someone do this work. They just love it.
- CyberDildonics 9y ago
  > talent is priceless Only when you are shopping for hallmark cards.
- humanrebar 9y ago
  On an individual level, a few million in the bank funds a lot of personal passion projects. And I'm passionate about what I'm working on. I'm passionate about my craft. I'm passionate about investing in my team and their tech stack. To some degree, the employment agreement and the salary is pointing my drive in a direction. I don't shut it off, I just move it. It's true that all that doesn't necessarily translate to more revenue or users. But that's also true, at least in the long run, of anything a firm might invest in, including top compensation packages for sales or management. Or expensive exclusives with vendors or clients. If the competitive advantage of a firm is its tech, then investing in that tech and recruiting and retaining top talent is a bet on a particular business plan. > I do not think even money would motivate me to work to such a degree if I'm working on something I don't believe in. Of course not. Ad absurdum, I wouldn't work for a drug cartel moving poison. I don't think that's a controversial position. Or are there something inherently unethical or soul-sucking about working for a large compensation package?
quickthrower2 9y ago
Cheaper than an acquihire and without the hassle.
wmeredith 9y ago
Top talent... selling advertising... for a news aggregator. Sigh.
- AndrewKemendo 9y ago
  Nobody will ever be happy. If someone says hey I can't pay top of market but we're doing something groundbreaking, they are talked about like they are a bunch of scammers. If someone is paying top salary but doing something mundane, it's "sigh."
  - donovanm 9y ago
    No approach will ever make everyone happy, but some people would be happy with those deals. It's only natural to want to work on interesting problems and be paid well & I don't think there's anything wrong with striving for that. In an ideal world we'd only work on what is the most interesting to us with no concern for money. In the real world there is an unfortunate flaw where we need money in order to survive. Lots of companies have an even worse issue when trying to recruit where the work is boring and the pay is average.
  - cafebeen 9y ago
    i think you mean, there will always be at least one person who is unhappy.
  - TeMPOraL 9y ago
    Because in a better world, the "top salary" would go to those doing "something groudbreaking". As it is, the pay structures in society are totally inverted compared to social value they provide. In particular, the system is set up to give highest rewards to those who work on scamming other people.
- eberkund 9y ago
  You say that like it is some basic task that any idiot with a computer science degree would be able to code up in a couple of weekends. Hey, maybe it is! But that just means the competition is even more fierce so it takes a lot to stand out. Like many things, it's not achieving the 95% that makes you successful but that extra 5% on top of all the other guys that makes the difference.
deleted 9y ago
[deleted]
throwaway2016a 9y ago
How is a company $2.5 billion in (projected) revenue a "startup"?
- Waterluvian 9y ago
  Depends on age and size? If I created a business model where I give you 1.15 for every $1 you give me, I bet I could see billions in revenue. And my company only has three employees. Two of which are cats! But your point is well taken.
  - quickthrower2 9y ago
    Hey leave Uber alone.
abrichr 9y ago
Is there an English language equivalent of Toutiao? If not, why?
- nickrio 9y ago
  TouTiao is a literal translation of Headline. （头）Tou = Head; （条）Tiao = Line
  - thaumasiotes 9y ago
    条 is a measure word for things that are long (rivers / snakes / pants), but it's not the word for line. The character most closely related to the concept is 线 xian, and 线 is indeed the word for "line" in many senses. In other senses, you find words of more than one syllable.
    - nickrio 9y ago
      Yes, it's not very accurate in term of word-by-word translation. Maybe it's for suiting the context and habits. A strip (条) of news is works better than A line (线) of news in Chinese.
- adventured 9y ago
  Sure, the landscape for aggregators is more fractured though, due to the long duration of establishment of huge news sources in the English markets (ie the English market is very consolidated at the top). Eg: Hacker News, Google News, Business Insider, Buzzfeed, Reddit, Huffington Post, Drudgereport, Digg, Flipboard, Techmeme, Redef and about 57 others. Some of them mix original content with blatantly regurgitated content, some are pure play aggregation. They're all playing in or right around the Toutiao neighborhood. The established players, and how well known they are, makes it far more difficult to build super valuable aggregators. If you want business news, you likely already know about Bloomberg, CNBC, etc. and they're going to cover most stories that matter.
- hayden592 9y ago
  Wavii. They did news aggregation and produced summaries with links back to the most popular article on the subject. They were bought by Google in 2013. https://www.google.com/amp/s/techcrunch.com/2013/04/23/google-buys-wavii-for-north-of-30-million/amp/ https://www.google.com/amp/s/techcrunch.com/2013/04/23/googl...
kalasoo 9y ago
Toutiao is more than just a news aggregation app, it's a huge interest mining and data recommendation system. Moreover, the company expands its services to mobile video sharing platform and many other fields so as to collect more dimensional data of users. --- In my opinion, ByteDance is a data/intelligence company and Toutiao is just a great app to adopt the technology and grow fast. So, we look forward to seeing an even brighter future of it, which might be able to leverage the market.
- kalasoo 9y ago
  BTW, the company has acquired many popular user-data-content apps and companies worldwide, while few of them were exposed.
  - tanilama 9y ago
    Flipagram for one
- tanilama 9y ago
  Truth is what majority people like are just BuzzFeed taste stuff. And that is exactly what Toutiao is producing and excelling at distributing. As one popular belief stated in machine learning, garbage in garbage out. They might use some really sophisticated model, but that is just another way of doing spamming a little better.
atomical 9y ago
> Zhang declined to comment on specific figures, saying most employees prefer stock over cash. His employees must be pretty confident considering that a few years of cash could set them up for life.
- walshemj 9y ago
  Or they are nieve - reading about the Chinese stock market it sounds like the NYT before the crash of 29 eg house wives trading on margin
goyfoyxoyfypc 9y ago
That's a start! What about paying all employees well and having executives stand for election by employees once a year?
sologoub 9y ago
These revenue numbers strike me as a bit odd, even for US market with it’s relatively high CPMs: $2.5 billion / 365 days / 120 mil daily users * 20 ad impressions (assumption on my part) * 1000 impressions (to account for CPM pricing) = $2.85 CPM That’s not bad avg. CPM even for US/EU market assuming mostly display/native display ad units and the relatively lower value of mobile dominant audiences. However, average of 20 ad impressions per user is fairly high. If they somehow have a lot of video ads, it changes the calculations somewhat, but still seems oddly high. Does anyone have any insight into how believable that $2.5 billion number is?
- geocar 9y ago
  The way the app works is that as you scroll you see more ads interspersed between headlines/topics. You click on one and you can comment and then go back to scrolling. Or maybe you're done with that topic group and you switch to another. More scrolling. 20 sounds fine to me. If it helps, think of the way people sit on hacker news or reddit waiting for the next story to come out, navigating down to comment, and then back to the next story. There are a lot of people who only do 1-2 impressions and a lot of people to do 100. And if you're still unconvinced: 10 ads only double your CPM estimate; A popular four-lettered sports site charges between $1-3 CPM for "un-targeted" display advertising, and $3-5 CPM for demo/interest targeted.
  - sologoub 9y ago
    But is that popular four-letter sports site in US or China? Typically, ad CPMs follow income levels/disposable incomes in the country/area the user is from. The quality of data the advertiser has about the specific user is also important. For example, since a lot of the tracking is illegal in Germany, even though incomes are similar to US, the CPMs are lower because US has more highly cookied/tracked users with higher CPMs. I’m not familiar with the Chinese ad market, so asking if anyone has concrete experience there and thinks such CPMs are plausible.
    - csa 9y ago
      Generally speaking, you should assume that there is a portion of the Chinese economy that is approximately the same size as the US with about the same amount of disposable income. This is very much an apples to oranges comparison, but a large part of China is effectively "rich" by international standards. Note that there is also a very much not-rich part of China that brings down the avergages. The averages don't matter so much when analyzing a polarized population.
xom 9y ago
And yet the company still can't afford walls.
- arjie 9y ago
  I know a HN trope is to be anti-open-office but maybe it's better to be imitating the guys valued at 20B than the guys valued at 200k. We need a "Show me the code" équivalent for claims about business. "Show me the money" If open offices were a big factor, I'd expect private office startups to out-compete.
  - sooheon 9y ago
    "Show me the money" is biased toward the status quo. If your litmus test for smart policy or decision-making "is everyone else who is successful doing it?", you will always lag behind the best.
    - arjie 9y ago
      That's true, and I can't think of a good alternative. But there's a clear problem on HN where people who don't run businesses and don't know how to pontificate on things like this citing nebulous results on productivity. If open-offices are so remarkably detrimental, then I await the disrupting startup that blows the rest of the industry out of the water by using private offices.
      - walshemj 9y ago
        IBM did not find it nebulous its just that the tail services HR Building Services are lowed two much power and game the system to save money short term (and get a bonus) with no thought to the longer term value.
      - alkonaut 9y ago
        > If open-offices are so remarkably detrimental, Assume they aren't. This place may of course be a bit biased - but among developers the opinion is at least appears to be very clear on that open offices suck. I'd even dare argue that many developers would either not work at a company with open offices, or would at least factor it in and weigh it against compensation. Now if this is the case, then regardless of whether there are tangible benefits of having private offices, companies would either lose out on talent, or need to compensate them more than they otherwise would. See the point isn't only whether developers are less happy or less productive in open offices - the point is also whether they believe they are less happy and less productive in open offices. And that is much easier to test/prove than whether they actually are.
thisisit 9y ago
Just wondering how much of this will actually cause a toxic work environment. Sure the people hired will have top talent but do they actually work well together? And are they comparatively paid? Because people will compete on salaries with each other causing the environment to go bad a bit.
HeavenFox 9y ago
On the one hand, as an engineer, it feels good to be paid top salary. On the other hand, I feel kinda sad Toutiao is the company that's doing it. They have a pretty bad rep for stealing content without compensating the content owner, sometimes even without attribution. Heck, they have stolen my post before without me seeing a single dime of that two billion dollars…
- therealdrag0 9y ago
  Yeah that's disgusting.
ryankupyn 9y ago
The thing that surprises me is that, after paying these engineers seven figures, they're still sticking them in open plan offices (as far as I can tell from the photos). Though I do know some people who can work effectively in that environment, it would be interesting to compare ever-so-slightly-cheaper engineers + a less-distracted work environment.
- jnordwick 9y ago
  I would be interested in knowing if better developers are more improved by having their own office above average developers or if they can handle the distraction more.
  - sitepodmatt 9y ago
    I think a lot of people value having other people around and in their sight, even freelancers leave their home office and head to coworking spaces and claim productivity gains. Personally I think the office per person idea is overrated, however I've worked in many places where the draw backs of open office hit sometimes. I think the best combo is open office, with hot private offices, and with the extra space, sleep rooms, relax rooms, big working table rooms, even put hipster stuff like a standing desk area in maybe etc.. Oh and if an employees ask for NC headphones just buy them! Also if someone really in the zone on something that distractions could be problematic be okay if Fred say's do you mind if I work from home today on this problem.
    - fergie 9y ago
      I second this. I worked at a university for a few years, and lots of people were jealous of my private office in a distant building, but I just found it socially isolating. That said, I did get a lot done.
      - talmand 9y ago
        But at least you had the option to temporarily relocate yourself to a more social area. Then you could move back when you needed focus.
jnordwick 9y ago
This is fairly coming financial technology except less base and more bonus. I've seen plenty of $500-800k base with 4x bonus (and more especially if you are close to the money or on the front desk). I think it is very healthy. It creates tiers in the profession because some developers are that much better. Being good glueing together frameworks isn't going to command that salary.
- tehlike 9y ago
  You mean quant? Or what exactly you mean with 500-800k base and 4x bonus?
- soVeryTired 9y ago
  Sorry, where? In the UK at least, you're talking about the top couple of dozen in any of the major investment banks. Only a couple of hundred in any given bank make more than a million total comp. https://news.efinancialcareers.com/uk-en/159654/everything-you-need-to-know-about-the-structure-and-level-of-salaries-and-bonuses-at-goldman-sachs-jpmorgan-citigroup-and-merrill-lynch-international/ https://news.efinancialcareers.com/uk-en/159654/everything-y...
  - jnordwick 9y ago
    NYC and Chicago mostly. I'm talking about those who are exceptional producers and director level and above and including all forms of compensation including guaranteed bonus minimum and a percentage of pnl at a trading firm.
- popopobobobo 9y ago
  Wow, I don't see these kind of developers walking around. I see managers in finance do this sometimes though. But definitely not plenty. You must be living in some paradise.
  - jnordwick 9y ago
    Sorry I didn't mean to make those numbers sound common. They are debuggers the exceptional end and either director or above or getting a percent of pnl and a trading firm. With just the people I know about i can probably list over a dozen easily dev or dev leads at $1000000+ last year.
fffernan 9y ago
There is a big difference from being paid in USD and being paid in the equivalent of USD in Yuan. Ever try to get 1 million USD equivalent of Yuan out of China before?
- toephu2 9y ago
  If these engineers are Chinese (which they are) and live in China they don't need to get it out of China.
  - charlesdm 9y ago
    You could say the same about people living in Venezuela, Ukraine and Russia. I would assume most (at least as a store of value) would prefer not to hold their local currency.
- Steeeve 9y ago
  I'm willing to give it a shot.
jlebrech 9y ago
at a certain level you're not paying people for their work but to keep their knowledge hostage.
aedron 9y ago
You couldn't pay me enough to work in the office pictured in the article.
alkonaut 9y ago
I'm not sure I'd want that kind of money... I mean I would but I wonder what kind of expectations you could put on someone who makes $1M at a "normal" desk job? Would it be expected that I had a wife that didn't work so I wouldn't have to take care of sick kids all the time? Would it be ok to work 9-5? I'd be happy to take the money but it feels a bit like there are hidden assumptions about what you are actually compensated for, once you get into these obscene levels of compensation.
- MagnumOpus 9y ago
  > Would it be expected that I had a wife that didn't work so I wouldn't have to take care of sick kids all the time? In China, having a nanny is normal and pretty much expected even at six-digit salaries, let alone seven. (And it won't cost much more than $10k a year either, so it is a no-brainer and might be even a perk paid by the company here - just like the company car with chauffeur or free meals.) > Would it be ok to work 9-5? Also no (unless you are just THAT good and have THAT much leverage to negotiate, which is unlikely). Even a normal skilled job will have the expectation of 50-70 hours of facetime, let alone this sort of high-profile position.
  - alkonaut 9y ago
    > In China, having a nanny is normal and pretty much expected even at six-digit salaries, let alone seven. (And it won't cost much more than $10k a year either, so it is a no-brainer and might be even a perk paid by the company here - just like the company car with chauffeur or free meals.) Having a nanny helps, but it only helps with the chore (e.g. dropping off a kid), you can't substitute your own face time with the kids. > Even a normal skilled job will have the expectation of 50-70 hours of facetime, let alone this sort of high-profile position. How can companies assume that paying $1M will get them the best talent, while at the same time assuming that requesting 50-70h work weeks doesn't rob them of a lot more talent? I mean if given a choice between $1M comp and 50-70h workweek, and .5M comp and a sane 40h work week - there has to be tons of people who choose (or had to) take the lower comp?
    - 9y ago
nathan_f77 9y ago
There's a lot of talk about work-life balance on HN, and I usually lean way towards the "life" end of the spectrum. For the last few years I've only been doing a couple of hours of paid work per day. But yeah, I'd be happy to work 70 hour weeks for $3M per year.
- npsimons 9y ago
  > But yeah, I'd be happy to work 70 hour weeks for $3M per year. I think I might compromise to work 70 hour weeks for $3m for one year. The trick is, you don't get to pick when that year happens, and there's actually a lot of build up to get to where you're worth $3m a year. There's a couple of Paul Graham essays with this as one of their themes: http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html http://paulgraham.com/start.html http://paulgraham.com/start.html I love the idea, but I don't think I'm good enough to pull it off, and I don't like the odds.
- classybull 9y ago
  Well, for at least a single year. I mean.. Work twice as hard for one year, and get paid close to what I can reasonably expect to make in 20.. yea, seems like a no brainer.
- jrs235 9y ago
  Ditto. I'd be happy to that for 6-12 months. :) Then I'd work on whatever I wanted thereafter.
calinet6 9y ago
The diminishing returns must be staggering. I can only imagine their management practices are comparably dismal with their focus on individual talent.
leroy_masochist 9y ago
This article strikes me as a submarine with a buried lede, namely, > Top performers can make $1 million in salary and bonus a year, plus options, according to people familiar with its hiring. Total compensation can exceed $3 million. Zhang declined to comment on specific figures, saying most employees prefer stock over cash. So basically, these engineers are getting paid $1mm, which is not a crazy multiple off of top end dev cash compensation in Bay Area, plus equity in a Chinese software company. This does not seem like news, per se. Compliments to Mr. Zhang's PR agency for getting an article published in Bloomberg that makes the client look sexy, mysterious, and elite.
kecoco0207 9y ago
There are currently possible ways for early employees to cash out their stock options, which further incentivizes talents to work for start-ups. EquityZen is a platform that lets employees sell shares before IPO: https://equityzen.com/?utm_source=https%3A%2F%2Fnews.ycombinator.com%2Fitem%3Fid%3D15327455&utm_medium=Hacker%20News&utm_campaign=Hacker_News&utm_term=news https://equityzen.com/?utm_source=https%3A%2F%2Fnews.ycombin...

256 points by lnguyen 9y ago

The thing with excessive remuneration with startup’s are, it’s highly unlikely one could switch to a better paying job when the need arises. Update : To people who ask why would someone need another job? There are multitude of reasons, a well funded startup which could pay several times the industry standard - when fails; puts excessively paid employees to compete in the same standarised job market. If you live in the part of the world where the HR asks about your previous pay to assess your eligibility for current job, you will soon end up settling for a sub-par(quality) job with standard pay i.e after giving up the ego. Also if the high paying job didn't provide you with necessary foundation to consistently improve your skill set, the moment you are out to compete in open job market; you'll be facing tough competition from better skilled people with standard pay whom the companies would likely prefer. Again, my arguments are based on the fact that you live in part of the world where your previous pay matters for current job interview.

ceejayoz 9y ago
Sure, but at $3M a year, sock $2.5M away, live extremely comfortably, and have one hell of a rainy day fund.
- tehlike 9y ago
  or work for 5-6 years, and retire (while still working for your own sake).
- dexterdog 9y ago
  I agree but you are not remotely considering taxes.
  - johnvonneumann 9y ago
    At $3M a year, taxes are probably the least of your earthly worries. And also, you probably make enough to get a good tax accountant.
    - travoc 9y ago
      At $3M a year taxes become a more significant worry.
      - nhaehnle 9y ago
        The relative amount of taxes paid doesn't really change anymore once you've reached six figures. On the other hand, the absolute amount still increases, which makes it more reasonable to spend significant money on tax accountants. So, if anything, taxes should become less of a worry, because you can more easily let really good professionals take care of it. But yes, I'm aware most people won't look at it rationally.
        charlesdm 9y ago
        If you're an employee, you generally can't optimise much. Perhaps you can take some basic deductions, but that's in. If you take two people earning $1M a year, the employee will in most jurisdictions (both relative and absolute) pay significantly more in taxes than the self employed person.
        walshemj 9y ago
        At the $1M you have much more options to optimise your tax eg in the UK ESI and VCT's become practicable investments which they would not really be at say $70k Just being able to max out your Pension and ISA at $27k is a big win for those earning enough - basically you can put £20k a year beyond the reach of CGT and Dividend Tax per year
        charlesdm 9y ago
- deleted 9y ago
  [deleted]
- AFNobody 9y ago
  If 80-90% of it is in stock / options with vesting (as I'd suspect it is based on that article) it is likely only true after the targets / target dates are hit.
  - pooper 9y ago
    > If 80-90% of it is in stock / options with vesting (as I'd suspect it is based on that article) it is likely only true after the targets / target dates are hit. My initial reaction was: Does anyone actually do this? If someone says "salary" package, I'd assume all of it is cash. but then I took a peek. > Top performers can make $1 million in salary and bonus a year, plus options, according to people familiar with its hiring. Total compensation can exceed $3 million. Zhang declined to comment on specific figures, saying most employees prefer stock over cash. So it is $1M in salary/bonus and up to $2M+ in stock grants bla bla (paper that I can't spend). > Zhang isn’t backing off his aggressive plans, despite the controversies over pay and business practices. Asked about one competitor's concern that Toutiao is trying to hire 200 AI engineers, a huge number given the limited pool of talent, Zhang says that's not quite right: "It may be more than 200.” This is the interesting part. at $1M per head, 200 engineers is $200M. It sounds like a lot and it is. I feel like someone is getting taken for a ride and I suspect it is the poor idiots who are taking $3M+ in paper over a little under $1M in cash salary and bonuses. I'd take the $1M cash and save like crazy because this is ridiculous overspending. I cannot imagine why you'd need 200+ data scientists to work on this project. But then I want to remind the reader that I have been wrong before and spectacularly so about Dropbox. I cannot believe Drew and gang are doing so well for themselves. Make sense that I am a poor idiot on the Internet.
    - mywittyname 9y ago
      Because each of those data scientists are a billion+ dollar per year lottery ticket. $3mm per year is a steal when you look at it that way.
  - walshemj 9y ago
    And assuming no dilution or other ways of reducing the value and the Chinese stock market does not even have the protections that the LSE or NYSE have for share holders.
- pmorici 9y ago
  Don't mean to nit pick but you are going to give up roughly a third of that to taxes.
j45 9y ago
Maybe a certain amount is enough.
ThrustVectoring 9y ago
Why would you ever need a better paying job afterwards?
- j7ake 9y ago
  Your assumption is that the position is tenured for life, which is not.
  - adrianN 9y ago
    After you make seven figures for two years you don't really have to work anymore. You can just live off your savings.
foota 9y ago
Why?
foota 9y ago
I don't understand, how would having a higher pay disqualify you for a position? Has this happened to you?

totalZero 9y ago

Is this surprising?

vostok 9y ago
A lot of people haven't really updated their expectations with regard to what the top of market looks like.

shamdasani 9y ago

The desire for more often blinds us. We all are looking for more wealth, and perhaps working for a startup like this will get us there. However, I personally think that talent is priceless. You can't just throw money for top skill. In field like startups, you have to passionate on what you're working on to make it the best it can be. Sure, say I have "top talent". But, what we fail to realize that "top talent" may not translate into more revenue or users. I must be willing to work the extra hours and focus my mind one hundred percent of the time to utilize this talent. And, honestly, I do not think even money would motivate me to work to such a degree if I'm working on something I don't believe in.

tehlike 9y ago
true that. Top talent engineers make their companies >20X in profit, no amount of "money" could make someone do this work. They just love it.
CyberDildonics 9y ago
> talent is priceless Only when you are shopping for hallmark cards.
humanrebar 9y ago
On an individual level, a few million in the bank funds a lot of personal passion projects. And I'm passionate about what I'm working on. I'm passionate about my craft. I'm passionate about investing in my team and their tech stack. To some degree, the employment agreement and the salary is pointing my drive in a direction. I don't shut it off, I just move it. It's true that all that doesn't necessarily translate to more revenue or users. But that's also true, at least in the long run, of anything a firm might invest in, including top compensation packages for sales or management. Or expensive exclusives with vendors or clients. If the competitive advantage of a firm is its tech, then investing in that tech and recruiting and retaining top talent is a bet on a particular business plan. > I do not think even money would motivate me to work to such a degree if I'm working on something I don't believe in. Of course not. Ad absurdum, I wouldn't work for a drug cartel moving poison. I don't think that's a controversial position. Or are there something inherently unethical or soul-sucking about working for a large compensation package?

quickthrower2 9y ago

Cheaper than an acquihire and without the hassle.

wmeredith 9y ago

Top talent... selling advertising... for a news aggregator. Sigh.

AndrewKemendo 9y ago
Nobody will ever be happy. If someone says hey I can't pay top of market but we're doing something groundbreaking, they are talked about like they are a bunch of scammers. If someone is paying top salary but doing something mundane, it's "sigh."
- donovanm 9y ago
  No approach will ever make everyone happy, but some people would be happy with those deals. It's only natural to want to work on interesting problems and be paid well & I don't think there's anything wrong with striving for that. In an ideal world we'd only work on what is the most interesting to us with no concern for money. In the real world there is an unfortunate flaw where we need money in order to survive. Lots of companies have an even worse issue when trying to recruit where the work is boring and the pay is average.
- cafebeen 9y ago
  i think you mean, there will always be at least one person who is unhappy.
- TeMPOraL 9y ago
  Because in a better world, the "top salary" would go to those doing "something groudbreaking". As it is, the pay structures in society are totally inverted compared to social value they provide. In particular, the system is set up to give highest rewards to those who work on scamming other people.
eberkund 9y ago
You say that like it is some basic task that any idiot with a computer science degree would be able to code up in a couple of weekends. Hey, maybe it is! But that just means the competition is even more fierce so it takes a lot to stand out. Like many things, it's not achieving the 95% that makes you successful but that extra 5% on top of all the other guys that makes the difference.

deleted 9y ago

[deleted]

throwaway2016a 9y ago

How is a company $2.5 billion in (projected) revenue a "startup"?

Waterluvian 9y ago
Depends on age and size? If I created a business model where I give you 1.15 for every $1 you give me, I bet I could see billions in revenue. And my company only has three employees. Two of which are cats! But your point is well taken.
- quickthrower2 9y ago
  Hey leave Uber alone.

abrichr 9y ago

Is there an English language equivalent of Toutiao? If not, why?

nickrio 9y ago
TouTiao is a literal translation of Headline. （头）Tou = Head; （条）Tiao = Line
- thaumasiotes 9y ago
  条 is a measure word for things that are long (rivers / snakes / pants), but it's not the word for line. The character most closely related to the concept is 线 xian, and 线 is indeed the word for "line" in many senses. In other senses, you find words of more than one syllable.
  - nickrio 9y ago
    Yes, it's not very accurate in term of word-by-word translation. Maybe it's for suiting the context and habits. A strip (条) of news is works better than A line (线) of news in Chinese.
adventured 9y ago
Sure, the landscape for aggregators is more fractured though, due to the long duration of establishment of huge news sources in the English markets (ie the English market is very consolidated at the top). Eg: Hacker News, Google News, Business Insider, Buzzfeed, Reddit, Huffington Post, Drudgereport, Digg, Flipboard, Techmeme, Redef and about 57 others. Some of them mix original content with blatantly regurgitated content, some are pure play aggregation. They're all playing in or right around the Toutiao neighborhood. The established players, and how well known they are, makes it far more difficult to build super valuable aggregators. If you want business news, you likely already know about Bloomberg, CNBC, etc. and they're going to cover most stories that matter.
hayden592 9y ago
Wavii. They did news aggregation and produced summaries with links back to the most popular article on the subject. They were bought by Google in 2013. https://www.google.com/amp/s/techcrunch.com/2013/04/23/google-buys-wavii-for-north-of-30-million/amp/ https://www.google.com/amp/s/techcrunch.com/2013/04/23/googl...

kalasoo 9y ago

Toutiao is more than just a news aggregation app, it's a huge interest mining and data recommendation system. Moreover, the company expands its services to mobile video sharing platform and many other fields so as to collect more dimensional data of users. --- In my opinion, ByteDance is a data/intelligence company and Toutiao is just a great app to adopt the technology and grow fast. So, we look forward to seeing an even brighter future of it, which might be able to leverage the market.

kalasoo 9y ago
BTW, the company has acquired many popular user-data-content apps and companies worldwide, while few of them were exposed.
- tanilama 9y ago
  Flipagram for one
tanilama 9y ago
Truth is what majority people like are just BuzzFeed taste stuff. And that is exactly what Toutiao is producing and excelling at distributing. As one popular belief stated in machine learning, garbage in garbage out. They might use some really sophisticated model, but that is just another way of doing spamming a little better.

atomical 9y ago

> Zhang declined to comment on specific figures, saying most employees prefer stock over cash. His employees must be pretty confident considering that a few years of cash could set them up for life.

walshemj 9y ago
Or they are nieve - reading about the Chinese stock market it sounds like the NYT before the crash of 29 eg house wives trading on margin

goyfoyxoyfypc 9y ago

That's a start! What about paying all employees well and having executives stand for election by employees once a year?

sologoub 9y ago

These revenue numbers strike me as a bit odd, even for US market with it’s relatively high CPMs: $2.5 billion / 365 days / 120 mil daily users * 20 ad impressions (assumption on my part) * 1000 impressions (to account for CPM pricing) = $2.85 CPM That’s not bad avg. CPM even for US/EU market assuming mostly display/native display ad units and the relatively lower value of mobile dominant audiences. However, average of 20 ad impressions per user is fairly high. If they somehow have a lot of video ads, it changes the calculations somewhat, but still seems oddly high. Does anyone have any insight into how believable that $2.5 billion number is?

geocar 9y ago
The way the app works is that as you scroll you see more ads interspersed between headlines/topics. You click on one and you can comment and then go back to scrolling. Or maybe you're done with that topic group and you switch to another. More scrolling. 20 sounds fine to me. If it helps, think of the way people sit on hacker news or reddit waiting for the next story to come out, navigating down to comment, and then back to the next story. There are a lot of people who only do 1-2 impressions and a lot of people to do 100. And if you're still unconvinced: 10 ads only double your CPM estimate; A popular four-lettered sports site charges between $1-3 CPM for "un-targeted" display advertising, and $3-5 CPM for demo/interest targeted.
- sologoub 9y ago
  But is that popular four-letter sports site in US or China? Typically, ad CPMs follow income levels/disposable incomes in the country/area the user is from. The quality of data the advertiser has about the specific user is also important. For example, since a lot of the tracking is illegal in Germany, even though incomes are similar to US, the CPMs are lower because US has more highly cookied/tracked users with higher CPMs. I’m not familiar with the Chinese ad market, so asking if anyone has concrete experience there and thinks such CPMs are plausible.
  - csa 9y ago
    Generally speaking, you should assume that there is a portion of the Chinese economy that is approximately the same size as the US with about the same amount of disposable income. This is very much an apples to oranges comparison, but a large part of China is effectively "rich" by international standards. Note that there is also a very much not-rich part of China that brings down the avergages. The averages don't matter so much when analyzing a polarized population.

xom 9y ago

And yet the company still can't afford walls.

arjie 9y ago
I know a HN trope is to be anti-open-office but maybe it's better to be imitating the guys valued at 20B than the guys valued at 200k. We need a "Show me the code" équivalent for claims about business. "Show me the money" If open offices were a big factor, I'd expect private office startups to out-compete.
- sooheon 9y ago
  "Show me the money" is biased toward the status quo. If your litmus test for smart policy or decision-making "is everyone else who is successful doing it?", you will always lag behind the best.
  - arjie 9y ago
    That's true, and I can't think of a good alternative. But there's a clear problem on HN where people who don't run businesses and don't know how to pontificate on things like this citing nebulous results on productivity. If open-offices are so remarkably detrimental, then I await the disrupting startup that blows the rest of the industry out of the water by using private offices.
    - walshemj 9y ago
      IBM did not find it nebulous its just that the tail services HR Building Services are lowed two much power and game the system to save money short term (and get a bonus) with no thought to the longer term value.
    - alkonaut 9y ago
      > If open-offices are so remarkably detrimental, Assume they aren't. This place may of course be a bit biased - but among developers the opinion is at least appears to be very clear on that open offices suck. I'd even dare argue that many developers would either not work at a company with open offices, or would at least factor it in and weigh it against compensation. Now if this is the case, then regardless of whether there are tangible benefits of having private offices, companies would either lose out on talent, or need to compensate them more than they otherwise would. See the point isn't only whether developers are less happy or less productive in open offices - the point is also whether they believe they are less happy and less productive in open offices. And that is much easier to test/prove than whether they actually are.

thisisit 9y ago

Just wondering how much of this will actually cause a toxic work environment. Sure the people hired will have top talent but do they actually work well together? And are they comparatively paid? Because people will compete on salaries with each other causing the environment to go bad a bit.

HeavenFox 9y ago

On the one hand, as an engineer, it feels good to be paid top salary. On the other hand, I feel kinda sad Toutiao is the company that's doing it. They have a pretty bad rep for stealing content without compensating the content owner, sometimes even without attribution. Heck, they have stolen my post before without me seeing a single dime of that two billion dollars…

therealdrag0 9y ago
Yeah that's disgusting.

ryankupyn 9y ago

The thing that surprises me is that, after paying these engineers seven figures, they're still sticking them in open plan offices (as far as I can tell from the photos). Though I do know some people who can work effectively in that environment, it would be interesting to compare ever-so-slightly-cheaper engineers + a less-distracted work environment.

jnordwick 9y ago
I would be interested in knowing if better developers are more improved by having their own office above average developers or if they can handle the distraction more.
- sitepodmatt 9y ago
  I think a lot of people value having other people around and in their sight, even freelancers leave their home office and head to coworking spaces and claim productivity gains. Personally I think the office per person idea is overrated, however I've worked in many places where the draw backs of open office hit sometimes. I think the best combo is open office, with hot private offices, and with the extra space, sleep rooms, relax rooms, big working table rooms, even put hipster stuff like a standing desk area in maybe etc.. Oh and if an employees ask for NC headphones just buy them! Also if someone really in the zone on something that distractions could be problematic be okay if Fred say's do you mind if I work from home today on this problem.
  - fergie 9y ago
    I second this. I worked at a university for a few years, and lots of people were jealous of my private office in a distant building, but I just found it socially isolating. That said, I did get a lot done.
    - talmand 9y ago
      But at least you had the option to temporarily relocate yourself to a more social area. Then you could move back when you needed focus.

jnordwick 9y ago

This is fairly coming financial technology except less base and more bonus. I've seen plenty of $500-800k base with 4x bonus (and more especially if you are close to the money or on the front desk). I think it is very healthy. It creates tiers in the profession because some developers are that much better. Being good glueing together frameworks isn't going to command that salary.

tehlike 9y ago
You mean quant? Or what exactly you mean with 500-800k base and 4x bonus?
soVeryTired 9y ago
Sorry, where? In the UK at least, you're talking about the top couple of dozen in any of the major investment banks. Only a couple of hundred in any given bank make more than a million total comp. https://news.efinancialcareers.com/uk-en/159654/everything-you-need-to-know-about-the-structure-and-level-of-salaries-and-bonuses-at-goldman-sachs-jpmorgan-citigroup-and-merrill-lynch-international/ https://news.efinancialcareers.com/uk-en/159654/everything-y...
- jnordwick 9y ago
  NYC and Chicago mostly. I'm talking about those who are exceptional producers and director level and above and including all forms of compensation including guaranteed bonus minimum and a percentage of pnl at a trading firm.
popopobobobo 9y ago
Wow, I don't see these kind of developers walking around. I see managers in finance do this sometimes though. But definitely not plenty. You must be living in some paradise.
- jnordwick 9y ago
  Sorry I didn't mean to make those numbers sound common. They are debuggers the exceptional end and either director or above or getting a percent of pnl and a trading firm. With just the people I know about i can probably list over a dozen easily dev or dev leads at $1000000+ last year.

fffernan 9y ago

There is a big difference from being paid in USD and being paid in the equivalent of USD in Yuan. Ever try to get 1 million USD equivalent of Yuan out of China before?

toephu2 9y ago
If these engineers are Chinese (which they are) and live in China they don't need to get it out of China.
- charlesdm 9y ago
  You could say the same about people living in Venezuela, Ukraine and Russia. I would assume most (at least as a store of value) would prefer not to hold their local currency.
Steeeve 9y ago
I'm willing to give it a shot.

jlebrech 9y ago

at a certain level you're not paying people for their work but to keep their knowledge hostage.

aedron 9y ago

You couldn't pay me enough to work in the office pictured in the article.

alkonaut 9y ago

I'm not sure I'd want that kind of money... I mean I would but I wonder what kind of expectations you could put on someone who makes $1M at a "normal" desk job? Would it be expected that I had a wife that didn't work so I wouldn't have to take care of sick kids all the time? Would it be ok to work 9-5? I'd be happy to take the money but it feels a bit like there are hidden assumptions about what you are actually compensated for, once you get into these obscene levels of compensation.

MagnumOpus 9y ago
> Would it be expected that I had a wife that didn't work so I wouldn't have to take care of sick kids all the time? In China, having a nanny is normal and pretty much expected even at six-digit salaries, let alone seven. (And it won't cost much more than $10k a year either, so it is a no-brainer and might be even a perk paid by the company here - just like the company car with chauffeur or free meals.) > Would it be ok to work 9-5? Also no (unless you are just THAT good and have THAT much leverage to negotiate, which is unlikely). Even a normal skilled job will have the expectation of 50-70 hours of facetime, let alone this sort of high-profile position.
- alkonaut 9y ago
  > In China, having a nanny is normal and pretty much expected even at six-digit salaries, let alone seven. (And it won't cost much more than $10k a year either, so it is a no-brainer and might be even a perk paid by the company here - just like the company car with chauffeur or free meals.) Having a nanny helps, but it only helps with the chore (e.g. dropping off a kid), you can't substitute your own face time with the kids. > Even a normal skilled job will have the expectation of 50-70 hours of facetime, let alone this sort of high-profile position. How can companies assume that paying $1M will get them the best talent, while at the same time assuming that requesting 50-70h work weeks doesn't rob them of a lot more talent? I mean if given a choice between $1M comp and 50-70h workweek, and .5M comp and a sane 40h work week - there has to be tons of people who choose (or had to) take the lower comp?
  - 9y ago

nathan_f77 9y ago

There's a lot of talk about work-life balance on HN, and I usually lean way towards the "life" end of the spectrum. For the last few years I've only been doing a couple of hours of paid work per day. But yeah, I'd be happy to work 70 hour weeks for $3M per year.

npsimons 9y ago
> But yeah, I'd be happy to work 70 hour weeks for $3M per year. I think I might compromise to work 70 hour weeks for $3m for one year. The trick is, you don't get to pick when that year happens, and there's actually a lot of build up to get to where you're worth $3m a year. There's a couple of Paul Graham essays with this as one of their themes: http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html http://paulgraham.com/start.html http://paulgraham.com/start.html I love the idea, but I don't think I'm good enough to pull it off, and I don't like the odds.
classybull 9y ago
Well, for at least a single year. I mean.. Work twice as hard for one year, and get paid close to what I can reasonably expect to make in 20.. yea, seems like a no brainer.
jrs235 9y ago
Ditto. I'd be happy to that for 6-12 months. :) Then I'd work on whatever I wanted thereafter.

calinet6 9y ago

The diminishing returns must be staggering. I can only imagine their management practices are comparably dismal with their focus on individual talent.

leroy_masochist 9y ago

This article strikes me as a submarine with a buried lede, namely, > Top performers can make $1 million in salary and bonus a year, plus options, according to people familiar with its hiring. Total compensation can exceed $3 million. Zhang declined to comment on specific figures, saying most employees prefer stock over cash. So basically, these engineers are getting paid $1mm, which is not a crazy multiple off of top end dev cash compensation in Bay Area, plus equity in a Chinese software company. This does not seem like news, per se. Compliments to Mr. Zhang's PR agency for getting an article published in Bloomberg that makes the client look sexy, mysterious, and elite.

kecoco0207 9y ago

There are currently possible ways for early employees to cash out their stock options, which further incentivizes talents to work for start-ups. EquityZen is a platform that lets employees sell shares before IPO: https://equityzen.com/?utm_source=https%3A%2F%2Fnews.ycombinator.com%2Fitem%3Fid%3D15327455&utm_medium=Hacker%20News&utm_campaign=Hacker_News&utm_term=news https://equityzen.com/?utm_source=https%3A%2F%2Fnews.ycombin...