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Based on that data, most FAANG engineers are already paid more than the profit their employers make per-employee. Yes, a lot of engineers at FAANG make more th

Based on that data, most FAANG engineers are already paid more than the profit their employers make per-employee. Yes, a lot of engineers at FAANG make more than $400k total comp. People seem to have a hard time believing that, but it's true. And according to that chart, only two companies actually make that much profit per employee.

Apocryphon 6y ago
Should total comp really be used in this comparison, rather than actual salary?
- twblalock 6y ago
  Why would only looking at salary be relevant?
  - disgruntledphd2 6y ago
    Because if (when) the markets crash by 40% and show no sign of recovery, salary will remain a lot more constant than total comp. Seriously markets only go up (and the absurd inflation of tech company stock prices since 2008) is a deep, deep problem with society which will inevitably end.
    - twblalock 6y ago
      That's not the point. Companies exist to reward their shareholders. Employees at most companies get paid as little as possible, as long as they don't quit. At tech companies, employees are shareholders and therefore they get to be part of the group of people that the company exists to reward. If you approach your stock compensation with that understanding, you'll be fine. If you expect the stock to only ever increase in value then you are being stupid. In my experience, tech workers at public companies are pretty savvy about their stock compensation. At startups, it's another matter...
      - disgruntledphd2 6y ago
        But the question was why one would report salary rather than total comp. I provided a potential answer to that question.
onion2k 6y ago
a lot of engineers at FAANG make more than $400k total comp This is the problem as I see it: $400k sounds like a good compensation, but we have no idea if that's as high as FAANGs would go. Maybe all those engineers could be on $800k if they'd negotiated better. We don't, and can't, know the answer to this problem. And frankly it doesn't matter if those engineers are happy with $400k, and FAANG companies happy paying them that, then everybody comes away feeling like they've won. I'm just wondering if, as a whole, engineers are actually leaving a lot of money on the table because using the 'market rate' is really the average of all the negotiations that have come before, and if the average engineer is bad at negotiating that means everyone is basing their salary expectation on lots of previous low offers that people shouldn't really have accepted. This is really a pricing problem, and everyone knows pricing is hard.
- missedthecue 6y ago
  If both parties are winning what's the problem here? Do you feel compelled to make one party win at the expense of another? Is that a more desirable outcome on net?
  - onion2k 6y ago
    I didn't say everyone wins. I said everyone feels like they've won. Those aren't the same. If I have to split $2,000,000 between you and me, but you don't know how much money there is, then you might be happy with me giving you $400,000. That's $400,000 you didn't have before. Hell yeah, $400k! That's loads. The fact we're both going away happy doesn't make it right though. There's a big disparity there. If you found out that I'd kept 4* what you got you'd have every reason to be pissed about it. That's what I'm suggesting FAANG companies might be doing - giving developers $400k, which makes them very happy, while keeping a far greater amount for themselves that could have been distributed between the workers at the company had those workers negotiated better by having greater knowledge of the system. I don't even know if that's really a bad thing if that's what's going on. The line that I originally quoted ("Tech workers are in so much demand that they don't really suffer such a disparity of negotiating power") just made me wonder if it's actually true that demand for tech workers has really driven wages to a natural equilibrium, or whether we just think that's true because $400k sounds like a lot.

Apocryphon 6y ago

Should total comp really be used in this comparison, rather than actual salary?

twblalock 6y ago
Why would only looking at salary be relevant?
- disgruntledphd2 6y ago
  Because if (when) the markets crash by 40% and show no sign of recovery, salary will remain a lot more constant than total comp. Seriously markets only go up (and the absurd inflation of tech company stock prices since 2008) is a deep, deep problem with society which will inevitably end.
  - twblalock 6y ago
    That's not the point. Companies exist to reward their shareholders. Employees at most companies get paid as little as possible, as long as they don't quit. At tech companies, employees are shareholders and therefore they get to be part of the group of people that the company exists to reward. If you approach your stock compensation with that understanding, you'll be fine. If you expect the stock to only ever increase in value then you are being stupid. In my experience, tech workers at public companies are pretty savvy about their stock compensation. At startups, it's another matter...
    - disgruntledphd2 6y ago
      But the question was why one would report salary rather than total comp. I provided a potential answer to that question.

onion2k 6y ago

a lot of engineers at FAANG make more than $400k total comp This is the problem as I see it: $400k sounds like a good compensation, but we have no idea if that's as high as FAANGs would go. Maybe all those engineers could be on $800k if they'd negotiated better. We don't, and can't, know the answer to this problem. And frankly it doesn't matter if those engineers are happy with $400k, and FAANG companies happy paying them that, then everybody comes away feeling like they've won. I'm just wondering if, as a whole, engineers are actually leaving a lot of money on the table because using the 'market rate' is really the average of all the negotiations that have come before, and if the average engineer is bad at negotiating that means everyone is basing their salary expectation on lots of previous low offers that people shouldn't really have accepted. This is really a pricing problem, and everyone knows pricing is hard.

missedthecue 6y ago
If both parties are winning what's the problem here? Do you feel compelled to make one party win at the expense of another? Is that a more desirable outcome on net?
- onion2k 6y ago
  I didn't say everyone wins. I said everyone feels like they've won. Those aren't the same. If I have to split $2,000,000 between you and me, but you don't know how much money there is, then you might be happy with me giving you $400,000. That's $400,000 you didn't have before. Hell yeah, $400k! That's loads. The fact we're both going away happy doesn't make it right though. There's a big disparity there. If you found out that I'd kept 4* what you got you'd have every reason to be pissed about it. That's what I'm suggesting FAANG companies might be doing - giving developers $400k, which makes them very happy, while keeping a far greater amount for themselves that could have been distributed between the workers at the company had those workers negotiated better by having greater knowledge of the system. I don't even know if that's really a bad thing if that's what's going on. The line that I originally quoted ("Tech workers are in so much demand that they don't really suffer such a disparity of negotiating power") just made me wonder if it's actually true that demand for tech workers has really driven wages to a natural equilibrium, or whether we just think that's true because $400k sounds like a lot.