4 ms·

The Great Tech Salary Crash

37 points by dbrereton 4y ago

EGreg 4y ago
Wouldn’t this actually drive the companies to offer higher base pay now?
- driverdan 4y ago
  Only if employees demand it through market pressure.
- Robotbeat 4y ago
  In the midst of layoffs from tech companies? Supply and demand. Supply of available workers is going up due to crypto/tech bubble popping, remote work, etc, and demand is going down because we’re in a technical recession… why would base pay increase?
- kypro 4y ago
  They can't do that easily though. If a company pays $100,000 in stock-based comp. that has no impact on their cashflows. You're effectively paying your employees with investment capital which is great if you have a hyped public stock. If you start paying all your engineers in cash suddenly your operating margins will drop and investors will get nervous that you're going to run out of cash. Imo there are a large number of unprofitable public tech companies today that rely almost entirely on their stock price remaining high to sustain their engineering costs. Instead of higher base pay, layoffs are far far more likely. Many of these companies simply don't have the cashflows to pay their engineering teams in cash.
kietay 4y ago
This is comparing expected growth numbers vs actual returns on equity grants
dboreham 4y ago
s/overtime/over time/
karlmdavis 4y ago
That… is not my understanding of the word “salary”; this article is conflating it with total compensation. Rather confusing.
- jasonlotito 4y ago
  "2022 is the year where Tech Compensation drops for the first time in decades." First line of the actual article. Subheader: "2022 is bringing us one of the largest declines in tech compensation in decades" Not sure how you are confused. Yes, Salary was used in headline, but the article made it very clear it was instead referring to compensation as a whole, and how this was affecting, basically, your take home. So, not sure where the article (which is pedantically separate from the headline) is confusing about this. Meta: It's annoying to see comments discuss the typos, the precise definition of things, and the otherwise useless pedantic-isms in HN articles. This isn't a recent occurrence, and I'm sure I've been a part of the problem in the past, but these comments are usually worthless at best, if not harmful in that it detracts from a more useful and constructive discussion. In the race to be "clever" and "technically correct", it's actually lazy and pointless. I wish there was a way to simply filter out this drivel. In many ways I dislike even having to type this meta commentary, but I feel it needs to be said. Apologies for the disruption.
  - geerlingguy 4y ago
    99% of us just read the headline on HN and jump to the comments to leave a hot take ;)
  - pliny 4y ago
    The difference is between something obvious and uninteresting (equity comp goes down when the value of the equity goes down) and something interesting and untrue (tech salaries are crashing). I get that post writer needs a hook in case they have something interesting to say about the equity comp situation (having read the article I don't think this is the case), but lying in the title to trick people into reading your article is still bad.
    - 4y ago
mooreds 4y ago
Focuses on stock grants from the big tech cos. Interesting, but more interesting to me is if salaries will drop across the board, which I feel will have a bigger impact on more people. True title should be "The Great Tech RSU Compensation Crash". :)
Pengtuzi 4y ago
Tech = FAANG, Salary = Stock valuation holy clickbait, Batman.
viknesh 4y ago
Another interesting factor (obviously not specific to tech) is inflation. This means that real wages probably declined by closer to 20-25% once accounting for that.
nottorp 4y ago
So... if you work for a public company that gives significant stock options, your total income has gone down. Otherwise nothing changed. How much rep do I need to downvote submissions again?
- tenpies 4y ago
  > Otherwise nothing changed. The beauty of inflation is that you can say this and even believe it, but your salary is down anywhere from 9% to 20% depending on how much you want to trust some of the most massaged CPI numbers ever put out by a government.
  - nottorp 4y ago
    I know, but it has nothing to do with the clickbait post that isn't about inflation.
- mikestew 4y ago
  How much rep do I need to downvote submissions again? Enough that people think you're @dang. All you can do is flag a submission, which is what I did. I rarely flag stuff that makes it to the front page, but this is such egregious bait-and-switch clickbait I made an exception.
  - nottorp 4y ago
    Editing it to say 'If you work for a FAANG your total compensation just crashed' would make it honest. Guess the admins can do that, I've never looked much into the internal workings of HN.
twh270 4y ago
Article seems to be clickbait and, worse, after scrolling partway a popup appears demanding an email address and prevents you from reading the rest of the article. I have no patience for that kind of bullshit.
- mcherm 4y ago
  > after scrolling partway a popup appears demanding an email address and prevents you from reading the rest of the article. Curious. I did not have that experience. I was able to read the full article normally.
  - twh270 4y ago
    Interestingly, I just went back and did not have that same experience. Seems that something changed.
- mgdev 4y ago
  You are able to close the popup by clicking in the shadow area of the shadowbox.
- jasonlotito 4y ago
  And yet, instead of just flagging it and moving on, you decide to harmful comment as it helps to promote something you consider to be BS. Good job.
mgdev 4y ago
Facebook only granted stock yearly, even when their performance review process happened every six months. So that "squeeze effect" doesn't mean much, IMO.
pcmoney 4y ago
If your RSUs are significantly devalued due to a price drop most tech companies will just give you a supplemental refresh to bring you back up. You might not be 100% whole to your target total comp but nobody is letting good engineers take a 35%+ cut to TC (65% to stock) because if they do they will lose their top talent. If I am a strong engineer and my comp gets cut by a 65% reduction in share price and I am at a BigTechCo then I can probably pretty easily: 1. Move to a peer company in regards to comp (Meta, Goog, Twtr, Msft, uber, airbnb) 2. Get a signing bonus of $40-100,000+ To do so 3. Get a new hire set of RSUs with a valuation at the current share price vs my previously underwater ones (which if the whole sector has gone down will probably work out really well for me long term). TL;DR total comp at the elite/liquid RSU level wont go down much.
lordnacho 4y ago
Some people are going to buy the "you'll get shares at a better price at the next refresh", at least for a year or two. TBF, if that happens and prices go back you should be very happy. Question is whether it's going to be a multi-year collapse with the shares under water for ages and ages.
TrackerFF 4y ago
A year ago or so I heard about tech workers taking out margin loans (for home purchase) against their RSUs and similar. Wondering how that's going right now.
system16 4y ago
I think a replacement acronym for FAANG may be in order if Netflix continues its downward trajectory because simply removing it from the current one won't work.
- egwynn 4y ago
  I always roll my eyes a little bit when people use the "FAANG" acronym because Netflix never really seemed like a good fit and it leaves out Microsoft which seems like a better fit. Nevermind that "Facebook" is actually "Meta" now and "Google" is actually "Alphabet" now. See also https://en.wikipedia.org/wiki/Big_Tech#FANG,_FAANG,_and_MAMAA https://en.wikipedia.org/wiki/Big_Tech#FANG,_FAANG,_and_MAMA...
cudgy 4y ago
Oh no! Stock options and other stock-based compensation for less than 1% of tech workers is suffering from the easily predictable end of the longest stock bull market in history. Now that these shares are hammered and more fairly priced, wouldn’t these few, rare, lucky FAANG workers be better off since the share prices are less likely to fall as far now?
sys_64738 4y ago
Isn't stock options meant to be under total compensation. Salary to me is the $$$ in my pocket that I get paid for showing up tomorrow, every two weeks.

37 points by dbrereton 4y ago

EGreg 4y ago

Wouldn’t this actually drive the companies to offer higher base pay now?

driverdan 4y ago
Only if employees demand it through market pressure.
Robotbeat 4y ago
In the midst of layoffs from tech companies? Supply and demand. Supply of available workers is going up due to crypto/tech bubble popping, remote work, etc, and demand is going down because we’re in a technical recession… why would base pay increase?
kypro 4y ago
They can't do that easily though. If a company pays $100,000 in stock-based comp. that has no impact on their cashflows. You're effectively paying your employees with investment capital which is great if you have a hyped public stock. If you start paying all your engineers in cash suddenly your operating margins will drop and investors will get nervous that you're going to run out of cash. Imo there are a large number of unprofitable public tech companies today that rely almost entirely on their stock price remaining high to sustain their engineering costs. Instead of higher base pay, layoffs are far far more likely. Many of these companies simply don't have the cashflows to pay their engineering teams in cash.

kietay 4y ago

This is comparing expected growth numbers vs actual returns on equity grants

dboreham 4y ago

s/overtime/over time/

karlmdavis 4y ago

That… is not my understanding of the word “salary”; this article is conflating it with total compensation. Rather confusing.

jasonlotito 4y ago
"2022 is the year where Tech Compensation drops for the first time in decades." First line of the actual article. Subheader: "2022 is bringing us one of the largest declines in tech compensation in decades" Not sure how you are confused. Yes, Salary was used in headline, but the article made it very clear it was instead referring to compensation as a whole, and how this was affecting, basically, your take home. So, not sure where the article (which is pedantically separate from the headline) is confusing about this. Meta: It's annoying to see comments discuss the typos, the precise definition of things, and the otherwise useless pedantic-isms in HN articles. This isn't a recent occurrence, and I'm sure I've been a part of the problem in the past, but these comments are usually worthless at best, if not harmful in that it detracts from a more useful and constructive discussion. In the race to be "clever" and "technically correct", it's actually lazy and pointless. I wish there was a way to simply filter out this drivel. In many ways I dislike even having to type this meta commentary, but I feel it needs to be said. Apologies for the disruption.
- geerlingguy 4y ago
  99% of us just read the headline on HN and jump to the comments to leave a hot take ;)
- pliny 4y ago
  The difference is between something obvious and uninteresting (equity comp goes down when the value of the equity goes down) and something interesting and untrue (tech salaries are crashing). I get that post writer needs a hook in case they have something interesting to say about the equity comp situation (having read the article I don't think this is the case), but lying in the title to trick people into reading your article is still bad.
  - 4y ago

mooreds 4y ago

Focuses on stock grants from the big tech cos. Interesting, but more interesting to me is if salaries will drop across the board, which I feel will have a bigger impact on more people. True title should be "The Great Tech RSU Compensation Crash". :)

Pengtuzi 4y ago

Tech = FAANG, Salary = Stock valuation holy clickbait, Batman.

viknesh 4y ago

Another interesting factor (obviously not specific to tech) is inflation. This means that real wages probably declined by closer to 20-25% once accounting for that.

nottorp 4y ago

So... if you work for a public company that gives significant stock options, your total income has gone down. Otherwise nothing changed. How much rep do I need to downvote submissions again?

tenpies 4y ago
> Otherwise nothing changed. The beauty of inflation is that you can say this and even believe it, but your salary is down anywhere from 9% to 20% depending on how much you want to trust some of the most massaged CPI numbers ever put out by a government.
- nottorp 4y ago
  I know, but it has nothing to do with the clickbait post that isn't about inflation.
mikestew 4y ago
How much rep do I need to downvote submissions again? Enough that people think you're @dang. All you can do is flag a submission, which is what I did. I rarely flag stuff that makes it to the front page, but this is such egregious bait-and-switch clickbait I made an exception.
- nottorp 4y ago
  Editing it to say 'If you work for a FAANG your total compensation just crashed' would make it honest. Guess the admins can do that, I've never looked much into the internal workings of HN.

twh270 4y ago

Article seems to be clickbait and, worse, after scrolling partway a popup appears demanding an email address and prevents you from reading the rest of the article. I have no patience for that kind of bullshit.

mcherm 4y ago
> after scrolling partway a popup appears demanding an email address and prevents you from reading the rest of the article. Curious. I did not have that experience. I was able to read the full article normally.
- twh270 4y ago
  Interestingly, I just went back and did not have that same experience. Seems that something changed.
mgdev 4y ago
You are able to close the popup by clicking in the shadow area of the shadowbox.
jasonlotito 4y ago
And yet, instead of just flagging it and moving on, you decide to harmful comment as it helps to promote something you consider to be BS. Good job.

mgdev 4y ago

Facebook only granted stock yearly, even when their performance review process happened every six months. So that "squeeze effect" doesn't mean much, IMO.

pcmoney 4y ago

If your RSUs are significantly devalued due to a price drop most tech companies will just give you a supplemental refresh to bring you back up. You might not be 100% whole to your target total comp but nobody is letting good engineers take a 35%+ cut to TC (65% to stock) because if they do they will lose their top talent. If I am a strong engineer and my comp gets cut by a 65% reduction in share price and I am at a BigTechCo then I can probably pretty easily: 1. Move to a peer company in regards to comp (Meta, Goog, Twtr, Msft, uber, airbnb) 2. Get a signing bonus of $40-100,000+ To do so 3. Get a new hire set of RSUs with a valuation at the current share price vs my previously underwater ones (which if the whole sector has gone down will probably work out really well for me long term). TL;DR total comp at the elite/liquid RSU level wont go down much.

lordnacho 4y ago

Some people are going to buy the "you'll get shares at a better price at the next refresh", at least for a year or two. TBF, if that happens and prices go back you should be very happy. Question is whether it's going to be a multi-year collapse with the shares under water for ages and ages.

TrackerFF 4y ago

A year ago or so I heard about tech workers taking out margin loans (for home purchase) against their RSUs and similar. Wondering how that's going right now.

system16 4y ago

I think a replacement acronym for FAANG may be in order if Netflix continues its downward trajectory because simply removing it from the current one won't work.

egwynn 4y ago
I always roll my eyes a little bit when people use the "FAANG" acronym because Netflix never really seemed like a good fit and it leaves out Microsoft which seems like a better fit. Nevermind that "Facebook" is actually "Meta" now and "Google" is actually "Alphabet" now. See also https://en.wikipedia.org/wiki/Big_Tech#FANG,_FAANG,_and_MAMAA https://en.wikipedia.org/wiki/Big_Tech#FANG,_FAANG,_and_MAMA...

cudgy 4y ago

Oh no! Stock options and other stock-based compensation for less than 1% of tech workers is suffering from the easily predictable end of the longest stock bull market in history. Now that these shares are hammered and more fairly priced, wouldn’t these few, rare, lucky FAANG workers be better off since the share prices are less likely to fall as far now?

sys_64738 4y ago

Isn't stock options meant to be under total compensation. Salary to me is the $$$ in my pocket that I get paid for showing up tomorrow, every two weeks.