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Ask HN: Job Options for software engineer
Which one of the options would an engineer prefer:
1. $600K/yr FAANG (50% cash, 50% RSU)
2. $600K/yr FAANG (100% cash)
3. $700K/yr non-FAANG (100% cash)
NOTE: I work at a FAANG co now and I can tell you that the learning experience can be hit or miss in FAANG (so, 3. is not as bad as it sounds).
I am not trying to decide my next job, but I see a lot of co-workers obsess about RSUs in FAANG (when they can be brought in open market).
- deanmoriarty 5y agoI went with #3
- productstudio 5y agoDid you invest the "extra" cash in FAANG stock(or any other asset class that you thought would give FAANG style return)? I get the fact that equity in a high quality startup is available only through employment (or investment). But, for a publicly traded company, it is not so clear why people choose 1.
- deanmoriarty 5y agoThe reason why people choose #1 is because your grant vests over 4 years but you lock in the price per share at year 0, so you are effectively leveraged for free, and if the stock grows your comp is going to compound nicely, it is entirely possible that by the end of year 4 your annualized comp would be $1M+. It would be hard to replicate that just with cash, because at year 0 you don’t have the entire value of the grant to allocate and lock in the price, so your invested money cannot compound as much. As for me, I do not invest in FAANG, too risky for me. I prefer to get paid cash higher than FAANG and invest in a diversified portfolio (I’m in VTI/VXUS/BND). With this strategy I am at $3M at 34, and I have almost enough savings to fire before 40 that I don’t need FAANG returns and volatility, SP500 will take care of me just fine with reduced volatility.
- productstudio 5y agoWell, one can take a home equity line of credit (interest rates are ridiculously low) and buy shares to "mimic" FAANG employment returns. I suspect people want FAANG jobs (Option 1) 'cos it looks good on resume and the RSU is a side benefit.
- rahimnathwani 5y agoBut then you're exposed to the downside risk. With RSUs, if there's a large drop in share price and you don't get an additional grant to make it up, you can always quit and go somewhere else. So it's a bet with asymmetric payoffs for you.
- productstudio 5y agoThat is a good point. I guess if FAANG stock price goes down, is it fair to say that we will be in recession (ie entire economy is impacted)?
- demygale 5y agoThese numbers seem…high.
- productstudio 5y agoNot that high. You can check levels.fyi
- giantg2 5y agoThe average dev in the US makes about $100k. Even a lot of FAANG employees are not making $500k+. I would think $200k-350k would be more normal based on the limited research I've done.
- ElectricMind 5y agoHave you considered variation because of years of experience > 10 years? I won't be surprised they pulling $500k+ for big giants
- giantg2 5y agoThere can be variation. I dont think years of experience is really a good indicator. The high performers are paid a lot. I remember a story about a startup trying to hire a google engineer who was a top expert in his tech for $1M, but he turned it down because google was paying him $3M per year. Stories like this are anecdotal and not indicative of the norm. According to Levels.fyi, less than 5% of bay area engineers are making over $450k.
- cpach 5y agoDon’t know where you live but comp in Silicon Valley/US has exploded the last ~5 years.
- admissionsguy 5y agoIt does bring me a sense of despair. Living in Europe, earning six-figures just barely and it's a stretch, significantly higher taxes, significantly higher prices (VAT!!), significantly more red tape. Trying to bootstrap a company, how can one even compete in the global market with people for whom $50k is pocket change?
- matt_s 5y agoOption 4: work outside silicon valley with very comfortable salary and much lower cost of living.
- ElectricMind 5y agoYou have a good dilemma at hand. I mean it is good dilemma to have :)
- productstudio 5y agoThis is a hypothetical situation. Just trying to understand what motivates engineers (engineers tend to follow logic). However, the numbers are generally true (are from Silicon Valley & based on data from levels.fyi)
- decafninja 5y agoReally curious as to #3 - what kind of company would pay SWEs this much. Algo trading shops? I'm assuming #2 is Netflix.
- deanmoriarty 5y agoI am a standard SWE (don’t work with finance or write trading algorithms) working in a hedge fund and my offer was ~30% higher than top of band for my level at FAANG, so option #3. Obviously it comes with (much?) worse work life balance.
- decafninja 5y agoInteresting. I recently had two offers from hedge funds (I would describe them as...maybe upper mid tier?). Standard SWE, no fancy algo work or anything. The cash part of the comp was probably just slightly less than FAANG, but total comp (cash + expected bonus) was significantly lower than comparable FAANG.
- deanmoriarty 5y agoWeird. I don’t know why one would accept those then given that work is going to be on average more dull, with worse work life balance. The companies I’m talking about are Two Sigma, Citadel, and similar.
- deleted 5y ago[deleted]
- decafninja 5y agoI'd consider TS, Citadel, Jane St, etc. to be the cream of the crop as far as a tech career in the finance industry goes. I'm actually in the interview pipeline with Citadel and TS at the moment. Don't suppose I could bugger you for any miscellaneous tips? :)
- 5y ago
- b20000 5y agowhat is your job title/level and what do you work on?
- deanmoriarty 5y agoMy numbers are moderately higher than that ($1M/y, no stock appreciation given it’s all cash). I am an infra SWE with a decade of experience (34 years old), the last few years focused on distributed systems (think Kafka, Kubernetes, etc). I have mostly an individual contributor role but I also work as tech lead for a few projects, planning and splitting the work for more junior engineers, and being ultimately responsible for the technical choices of the team. I would define myself as absolutely average, I am not a brilliant developer and most times I find it hard to dig into a codebase and understand it, or entirely follow technical conversations with my peers. I have no “popular” work in the public to my name, if you googled me nothing substantial would show up, just a few sparse messages in open source mailing lists. I am at a hedge fund. My role at FAANG would be paid around ~$600k/y (had actual offers at hand in that range).
- b20000 5y agowhat are the main reasons to work at a hedge fund vs FAANG?
- deanmoriarty 5y agoIf you are a SWE, I’d say higher compensation is pretty much the only factor. I fundamentally don’t like working at all and despise the idea of having to rent my time to a boss in a futile rat race, so I might as well maximize the money if I have to do it, so I can retire early. I am on track to quit the corporate world as soon I reach $5M liquid net worth, which should hopefully be < 5 years away. After that, I’ll quit without even thinking twice.
- b20000 5y agomakes sense… how did you transition to the hedge fund world from the normal tech world and were you at a FAANG when you made the transition?
- dyeje 5y agoThis is what Blind is for.
- productstudio 5y agoBlind tends to be a FAANG echo chamber. Curious to gather other PoV (esp from folks more inclined towards the startup path)
- askafriend 5y agoI would choose #1 if I believed in the company (FAANG tends to be a sure bet in terms of growth). By the time RSUs vest they could be worth substantially more. This is assuming that you're awarded a set # of RSUs rather than a dollar amount pegged to the price of the stock at the time they vest. The details of vesting matter here. If you're unsure or feel uncomfortable with the risk, then the all-cash option (#2) would be better. As for option #3, it would really depend on the specific company - difficult to evaluate without knowing. It's hard to know if taking a bet on a non-FAANG company's stock is a good idea without an understanding of what space they're in, what stage they're at, etc.
- productstudio 5y agoWith the cash option (#2 or #3), you can invest in any FAANG no? ie you can work for Company X, but buy 50% AAPL and 50% FB with the cash you are getting. This is a hypothetical scenario. Just thinking that folks dont think this way when it comes to evaluating job offers. Basically, the question is: "how much extra cash does one need to decline a FAANG offer (is it 2X or 4X the $ value of a FAANG RSUs?)"