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Yeah, as a CEO I find it gross. I don't make the most at my company by a long shot - I own stock, which carries more risk, but I chose to take this path. If the

Yeah, as a CEO I find it gross. I don't make the most at my company by a long shot - I own stock, which carries more risk, but I chose to take this path. If the company is over budget I'm the first to take a pay cut, I would never try to extract that from my employees before I did so with my own funds. The reason developers are paid a lot is because they're worth a lot. That's it. IMO If you're a CEO that's what you sign up for. If you can't handle that, find another job.

bb88 5y ago
I suspect that the market is finally catching up. A good dev might might generate $4M of revenue (or savings) over the course of his tenure. I know I saved companies millions of dollars but only got $100k/yr doing it.
- walshemj 5y ago
  I fixed a single bug that recovered amount (in todays terms ) in my mid 20's. Neither I or the company secretary I worked with to ever got a word of thanks.
  - ASalazarMX 5y ago
    At least you can be sure that the deed was not forgotten, someone higher likely took credit for it.
  - brianwawok 5y ago
    To be fair, someone else made a bug that cost that much. I don't think you want to be in the business of getting a say 20% of revenue from big fixes, but also get 20% of revenue from bug creation? Or hey maybe you do, you could try to get that in your next contract.
    - walshemj 5y ago
      Yeh a previous FD who brought that POS accounts receivable.
    - dzhiurgis 5y ago
      Sales constantly generate revenue and costs (feature requests) - do they get penalised when they don’t win client?
      - bb88 5y ago
        To be fair, sales teams lose commissions, bonuses, and are more easily tied closer to performance metrics -- which makes them easier to be fired.
      - brianwawok 5y ago
        Yes they do, their commission drops. Which could be something like 50% of base pay. Imagine if as a dev you want to make 100k.. so instead you make 50k guaranteed (base pay), but then bonuses based on how many JIRAs you close. Hit your bug target make 100k. Get stuck on a nasty one? Opps, only 90k.
    - imtringued 5y ago
      Business is incredibly willing to accept bugs and often extremely unwilling to fix them.
- smabie 5y ago
  It doesn't matter how much revenue you generate. It's irrelevant. People get paid based on supply and demand.
  - muskox2 5y ago
    Yes, and generating more revenue would tend to instead demand for your skills, no?
    - bb88 5y ago
      That's actually kind of the point. Managers have been pretty much in control of the narrative about what's happening underneath them when relaying to up the chain, and therefore they could overstate their own self importance -- when really it was the people under them that came up with the ideas, found the savings, made the efficiency gains happen... etc etc. (There are many managers that are good, but there are a god awful lot that are bad.) So now in 2021, people have figured out they like having their own private bathroom, and a 43" monitor on their desk (because the company won't pay for it), and not doing the brutal commutes anymore. The reality of the employee's true monetary value in a company is becoming starker and starker by the day.
    - HeyZuess 5y ago
      No, and the inverse can also be true that a low-revenue generating skill might be in high demand. There are many factors which impact on this. Also there is a difference between revenue generating and cost reduction.
  - tsimionescu 5y ago
    That's precisely the problem facing society right now, isn't it?
- nunez 5y ago
  $4M sounds low. Example. Let's say someone in accounting is responsible for combing through invoices, extrapolating data from them, and entering those extrapolations into a spreadsheet, perhaps with some calculations. That someone is earning $75,000/year (not including benefits and other costs) to do this job. $75,000/year is the market rate for someone experienced enough to do this correctly, and since this is accounting, outsourcing this would be difficult because of US tax law. This task consumes approx. 10 of their 40 hours/week. There are 261 working days in the 2021 fiscal year. This means that this $75,000/year person costs the company $288/day. Of that $288, it costs $231/day to do this particular task. $231/day * 261 days = $60,291. You come along. You discover this madness and write a script to do it. You are paid $150,000/year (not fully loaded). Since you're subject to capital-A Agile, you do this in the very little downtime you get between playing stories. You write the script (with no tests, because you ain't getting time for that) in six hours, or about 3/4 of a day. Since you cost $575/day ($150,000/261 days), this work "cost" the company $431. However, the script does what the person in accounting did in 30 seconds and does so completely automatically. In essence, the company "paid" $431 to automate what cost them $60,291 to get done. _Per person_. That's where the real savings comes from. Tech can scale so much more efficiently than people can. If this task needed 10 people worth $75,000/year to accomplish, it would have still "cost" the company $431 to automate what is now a $600,000 annual job! If you were an entrepreneur selling this as a solution, you would probably sell this to the company at, say, $100/month. ($9.99/mo would be too low, and you do have to charge a "throat to choke" premium). That's $1,200/year of super sticky recurring revenue that you can sell to multiple companies with minor refactoring (because big companies generally don't abandon things, especially not things this cheap). Not a bad return on something that took six hours to write! If you were working for this CEO, you would get scolded by a PM for working on an item that didn't have a story, which would percolate up to a negative mark on your yearly review that shunts your chance at a raise. Sure, you'll still get your 5% bonus of $7,500...but your six hour BS project literally saved the company over $59,000! PER PERSON! See why what this CEO said is incredibly insulting?
  - bb88 5y ago
    What I find interesting, is that instead of taking that savings directly (by firing accounting employees), managers will just increase the load on accounting now that they are more efficient. And when reporting those same efficiencies up, many managers will take the credit for any efficiency gain, rather than give credit to the employees that made the gain happen.
- HeyZuess 5y ago
  > I know I saved companies millions of dollars but only got $100k/yr doing it. Let's use an arbitrary 1m saving. If you saved a company (me) a million dollars, you just made 10% (aka 100K). That's a pretty good commission. If you got health care, retirement contributions and anything else on top of that, you have made an exceptional commission. Because I gather you mention saving you mean on sunk costs. The second year you earn 100K, and if you don't save me money you have now made 20% commission and only saved me 800K (1m - 100K - 100k). And so on and so on, or you need to keep saving me 1m a year and there is a point where my costs will reach $0 and your salary will outpace that, increasing my costs. This obviously is a very linear representation where you're not adding extra value, nor am I incurring any additional cost/losses by employing you. Cost savings are reflected once in my bottom line but your salary is reflected every year in my in operating costs. However if you made me an extra 1m a year revenue (and my costs stayed the same), I would make 900K from you every year, and you make 10%. But if my costs increased then that 900K revenue is much smaller, let's say my revenue increased 900K but my costs increased 100K, you make around 12%. Now we are talking about profit.
  - simonh 5y ago
    Plus it costs a lot more than salary to employ an engineer. You also need to pay hosting and operating costs for the product, office and technology support costs, support personnel costs (hiring, HR, procurement, secretarial, finance, payroll), business insurance. All of that needs to be amortized across the 'front line' costs. The cost of employing someone is generally about double what you actually pay them and can be a lot more.
    - HeyZuess 5y ago
      > Plus it costs a lot more than salary to employ an engineer. Yes, the operational costs can be substantial.
  - tsimionescu 5y ago
    If I provide 1M of value to the company, why would it not be ridiculously bad to get 10% of that value for myself? You call it a "commission" as if this was a salesman getting a cut of the cost of the product they sold, but a salesperson selling a $1M product is not providing $1M to the company - the $1M is split between the salesperson, people building the product, marketing etc. On the other hand, an investor who gives the company $1M normally expects to get more than 100% of that back (with some risks, of course). Or would you say that an investment where you pay $1M to get $100K back is a good investment?
DaveExeter 5y ago
>The reason developers are paid a lot is because they're worth a lot. That's it. That is circular reasoning. The reason developers are paid a lot is because employers have bid up the compensation of developers.
- muskox2 5y ago
  Yes, and gold and jewelry are worth a lot because people have bid up prices for them. That is how worth is determined on a market.
- HeyZuess 5y ago
  I actually wonder how many people might be employed by FAANG companies on high salaries just to deny their competitor from getting access to that person's skills. If I am Google, it is in my best interest to hire as many skilled people in AI for example to deny Facebook from accessing those skills. But yes, I can see what you are saying that employers drive the demand which puts the value on developers. Kind of like my wife and multiple other people in the world putting a price on a LV handbag, without the demand the LV is probably not worth more than a few hundred dollars.
smabie 5y ago
Developers aren't paid a lot because they are "worth a lot." They are paid a lot because of supply and demand. That's it.

bb88 5y ago

I suspect that the market is finally catching up. A good dev might might generate $4M of revenue (or savings) over the course of his tenure. I know I saved companies millions of dollars but only got $100k/yr doing it.

walshemj 5y ago
I fixed a single bug that recovered amount (in todays terms ) in my mid 20's. Neither I or the company secretary I worked with to ever got a word of thanks.
- ASalazarMX 5y ago
  At least you can be sure that the deed was not forgotten, someone higher likely took credit for it.
- brianwawok 5y ago
  To be fair, someone else made a bug that cost that much. I don't think you want to be in the business of getting a say 20% of revenue from big fixes, but also get 20% of revenue from bug creation? Or hey maybe you do, you could try to get that in your next contract.
  - walshemj 5y ago
    Yeh a previous FD who brought that POS accounts receivable.
  - dzhiurgis 5y ago
    Sales constantly generate revenue and costs (feature requests) - do they get penalised when they don’t win client?
    - bb88 5y ago
      To be fair, sales teams lose commissions, bonuses, and are more easily tied closer to performance metrics -- which makes them easier to be fired.
    - brianwawok 5y ago
      Yes they do, their commission drops. Which could be something like 50% of base pay. Imagine if as a dev you want to make 100k.. so instead you make 50k guaranteed (base pay), but then bonuses based on how many JIRAs you close. Hit your bug target make 100k. Get stuck on a nasty one? Opps, only 90k.
  - imtringued 5y ago
    Business is incredibly willing to accept bugs and often extremely unwilling to fix them.
smabie 5y ago
It doesn't matter how much revenue you generate. It's irrelevant. People get paid based on supply and demand.
- muskox2 5y ago
  Yes, and generating more revenue would tend to instead demand for your skills, no?
  - bb88 5y ago
    That's actually kind of the point. Managers have been pretty much in control of the narrative about what's happening underneath them when relaying to up the chain, and therefore they could overstate their own self importance -- when really it was the people under them that came up with the ideas, found the savings, made the efficiency gains happen... etc etc. (There are many managers that are good, but there are a god awful lot that are bad.) So now in 2021, people have figured out they like having their own private bathroom, and a 43" monitor on their desk (because the company won't pay for it), and not doing the brutal commutes anymore. The reality of the employee's true monetary value in a company is becoming starker and starker by the day.
  - HeyZuess 5y ago
    No, and the inverse can also be true that a low-revenue generating skill might be in high demand. There are many factors which impact on this. Also there is a difference between revenue generating and cost reduction.
- tsimionescu 5y ago
  That's precisely the problem facing society right now, isn't it?
nunez 5y ago
$4M sounds low. Example. Let's say someone in accounting is responsible for combing through invoices, extrapolating data from them, and entering those extrapolations into a spreadsheet, perhaps with some calculations. That someone is earning $75,000/year (not including benefits and other costs) to do this job. $75,000/year is the market rate for someone experienced enough to do this correctly, and since this is accounting, outsourcing this would be difficult because of US tax law. This task consumes approx. 10 of their 40 hours/week. There are 261 working days in the 2021 fiscal year. This means that this $75,000/year person costs the company $288/day. Of that $288, it costs $231/day to do this particular task. $231/day * 261 days = $60,291. You come along. You discover this madness and write a script to do it. You are paid $150,000/year (not fully loaded). Since you're subject to capital-A Agile, you do this in the very little downtime you get between playing stories. You write the script (with no tests, because you ain't getting time for that) in six hours, or about 3/4 of a day. Since you cost $575/day ($150,000/261 days), this work "cost" the company $431. However, the script does what the person in accounting did in 30 seconds and does so completely automatically. In essence, the company "paid" $431 to automate what cost them $60,291 to get done. _Per person_. That's where the real savings comes from. Tech can scale so much more efficiently than people can. If this task needed 10 people worth $75,000/year to accomplish, it would have still "cost" the company $431 to automate what is now a $600,000 annual job! If you were an entrepreneur selling this as a solution, you would probably sell this to the company at, say, $100/month. ($9.99/mo would be too low, and you do have to charge a "throat to choke" premium). That's $1,200/year of super sticky recurring revenue that you can sell to multiple companies with minor refactoring (because big companies generally don't abandon things, especially not things this cheap). Not a bad return on something that took six hours to write! If you were working for this CEO, you would get scolded by a PM for working on an item that didn't have a story, which would percolate up to a negative mark on your yearly review that shunts your chance at a raise. Sure, you'll still get your 5% bonus of $7,500...but your six hour BS project literally saved the company over $59,000! PER PERSON! See why what this CEO said is incredibly insulting?
- bb88 5y ago
  What I find interesting, is that instead of taking that savings directly (by firing accounting employees), managers will just increase the load on accounting now that they are more efficient. And when reporting those same efficiencies up, many managers will take the credit for any efficiency gain, rather than give credit to the employees that made the gain happen.
HeyZuess 5y ago
> I know I saved companies millions of dollars but only got $100k/yr doing it. Let's use an arbitrary 1m saving. If you saved a company (me) a million dollars, you just made 10% (aka 100K). That's a pretty good commission. If you got health care, retirement contributions and anything else on top of that, you have made an exceptional commission. Because I gather you mention saving you mean on sunk costs. The second year you earn 100K, and if you don't save me money you have now made 20% commission and only saved me 800K (1m - 100K - 100k). And so on and so on, or you need to keep saving me 1m a year and there is a point where my costs will reach $0 and your salary will outpace that, increasing my costs. This obviously is a very linear representation where you're not adding extra value, nor am I incurring any additional cost/losses by employing you. Cost savings are reflected once in my bottom line but your salary is reflected every year in my in operating costs. However if you made me an extra 1m a year revenue (and my costs stayed the same), I would make 900K from you every year, and you make 10%. But if my costs increased then that 900K revenue is much smaller, let's say my revenue increased 900K but my costs increased 100K, you make around 12%. Now we are talking about profit.
- simonh 5y ago
  Plus it costs a lot more than salary to employ an engineer. You also need to pay hosting and operating costs for the product, office and technology support costs, support personnel costs (hiring, HR, procurement, secretarial, finance, payroll), business insurance. All of that needs to be amortized across the 'front line' costs. The cost of employing someone is generally about double what you actually pay them and can be a lot more.
  - HeyZuess 5y ago
    > Plus it costs a lot more than salary to employ an engineer. Yes, the operational costs can be substantial.
- tsimionescu 5y ago
  If I provide 1M of value to the company, why would it not be ridiculously bad to get 10% of that value for myself? You call it a "commission" as if this was a salesman getting a cut of the cost of the product they sold, but a salesperson selling a $1M product is not providing $1M to the company - the $1M is split between the salesperson, people building the product, marketing etc. On the other hand, an investor who gives the company $1M normally expects to get more than 100% of that back (with some risks, of course). Or would you say that an investment where you pay $1M to get $100K back is a good investment?

DaveExeter 5y ago

>The reason developers are paid a lot is because they're worth a lot. That's it. That is circular reasoning. The reason developers are paid a lot is because employers have bid up the compensation of developers.

muskox2 5y ago
Yes, and gold and jewelry are worth a lot because people have bid up prices for them. That is how worth is determined on a market.
HeyZuess 5y ago
I actually wonder how many people might be employed by FAANG companies on high salaries just to deny their competitor from getting access to that person's skills. If I am Google, it is in my best interest to hire as many skilled people in AI for example to deny Facebook from accessing those skills. But yes, I can see what you are saying that employers drive the demand which puts the value on developers. Kind of like my wife and multiple other people in the world putting a price on a LV handbag, without the demand the LV is probably not worth more than a few hundred dollars.

smabie 5y ago

Developers aren't paid a lot because they are "worth a lot." They are paid a lot because of supply and demand. That's it.