4 ms·

I'll believe it when I see it. There is an uproar because the cash portion of bonuses are being capped at "just" $125,000 a year. Presumably, that is in addit

by jcnnghm 15y ago

I'll believe it when I see it. There is an uproar because the cash portion of bonuses are being capped at "just" $125,000 a year. Presumably, that is in addition to the regular salary, and excluding stock bonuses, which now make up about 75% of bonuses. So a $500,000 a year combined cash and stock bonus will not be unheard of. That's a total compensation package of $600,000 - $700,000 a year. YC founders probably have the highest chances of success as startup founders, given YCs connections and alumni network. What percentage of founders make over $600,000 a year in total compensation, once exits are added back in, and averaged over the years the founder works on the company? What percentage makes under $125,000 a year? What percentage of engineers that aren't founders or within the first five employees make over $300,000 a year? The money is in Silicon Valley, Google's 2011 net income was $299,874/employee [1], but the vast majority of engineers aren't going to be the ones to get it. How many finance people are actually going to give up the higher pay, lower cost of living, shorter hours, and structure of Wall St for Silicon Valley? Have a bad year on Wall St, make a Silicon Valley engineering salary, have a bad year as a start-up founder, make nothing and go bankrupt. [1] Goldman Sachs 2011 net income was $162,913 per employee. Average pay was $367,057. It's harder to get data on Google, but it looks like the mid-career median salary is $141,000.

mahyarm 15y ago
From what I got, Wall St./NYC has a similar or higher cost of living and very insane hours even at large finance firms for at least for the first 5 years. 14 hour days are very common.
- jcnnghm 15y ago
  I just looked it up, and you are correct about the cost of living. Manhattan seems to be about 38% higher than San Francisco.
  - uptown 15y ago
    Cost of living in NYC is pretty insane. Housing is consistently high. Food prices are nuts ... think > $7 for a box of cereal. For taxes, you've got Federal tax, state tax, and city tax, plus some exciting new taxes like MTA taxes for the mismanaged transit authority you're already paying your fare to use. Want to own a car? Either park on the street for free where you'll need to move your car no fewer than three times a week due to street-cleaning, or you can get a parking garage for anywhere from $300/month to $550/month depending on the type of car you're trying to park. The list goes on and on. It's an expensive place to live. The upside is that anytime you take a vacation elsewhere it feels like you're stealing because everything is so comparatively inexpensive.
    - apaprocki 15y ago
      $7 cereal? $550/month parking? Yes, if you're referring to the most chic organic cereal you can find at Whole Foods and you're parking a Bentley. Alternatively, you can shop at C-Town or Costco and find any number of parking spots for $250/month. Zipcar is prevalent everywhere as well if you don't want the overhead. Don't get me wrong, NYC is expensive, but you don't have to make it out to be more than it really is. If you don't make the money to live in a certain neighborhood, think about moving.
      - AznHisoka 15y ago
        absolutely, you are so right. NY'ers are so spoiled and are used to overspending. "I like to take my girlfriend out to eat.. taxi here and there.." Please.. learn how to budget and spend wisely. Eat at home. Take the subway.
        tptacek 15y ago
        This strikes me as similar to the common explanation of why Whole Foods "appears" so expensive when apples-apples comparisons can show prices there to be similar to those of Safeway; yes, the apples cost the same, but Whole Foods gives way more prominence to the super-expensive rare varietal organic local apples that cost 3x as much. Net result: whatever the absolute price comparisons say, it takes more mental effort to shop cost effectively at Whole Foods.
    - zavulon 15y ago
      You're talking about Manhattan. NYC is a big place. A lot of people live in outer boroughs (and I don't mean Downtown Brooklyn), where it's a yes, one hour commute to work, but you can rent a house with a driveway, or find parking with absolutely no problem (street cleaning once a week). And if you live in Manhattan, you don't need a car anyway.
      - bitwize 15y ago
        If you work in finance, then not living in Manhattan means you're not "serious" and will be passed over for promotions, etc. Basically, high rollers are expected to live a high-roller lifestyle. If you display signs of frugality it means you're still thinking like a poor person.
patio11 15y ago
I think it's time to dust off the pg essay on wealth. Wall Street pay skyrocketed because of measurement and leverage: basically, you can trace millions of dollars of revenue to the actions of a single individual with a high degree of certainty. Does that opportunity exist in Silicon Valley? Yes, it exists in spades. The engineers at issue are not as sophisticated as Wall Street employees about extracting that value or taking advantage of a very fluid employment market, but they also didn't get where they are by being stupid, and if you're not stupid and your weekly reports are routinely sounding like "Oh BTW I made us two million bucks" then people are going to start giving you whatever it is you care to get out of the relationship. There just doesn't seem to be any a priori reason to me why $120k is the correct price for competent engineering in a world where productivity directly associated with software is measurably exploding. (That gets no less true at $240k, $360k, or $1024k.) I don't know if I'd pick early startup employees as the likely beneficiaries of this dynamic, though. Some will end up working for the next Google and end up rich as kings, but that has a poor median-case outcome for individual engineers since they don't get to "invest" working years in 100 companies in parallel. If you want measurement and leverage there's a fairly good case to be made for going to work for the current Google (or AmaBookSoftEtc) and just engineer your transfer onto the pointy bit of the spear.
- geebee 15y ago
  This is indisputably a big part of why people on wall street get paid so much. It doesn't explain why the opportunity exists in the first place, but it does explain why the top players get so much money. As long as we're careful not to associate "bringing in revenue" with "creating wealth", I'm in agreement. My big problem with wall street isn't that top players get money - that's fine by me. It's that they acquire wealth without creating it, and in many cases inflict real wealth destruction on the rest of the economy. In general, I'd say that in a a good economic system, wealth acquisition correlates closely and positively with wealth creation. When it does, people tend to value and admire the wealthy. When the correlation becomes negative, well, you get the French revolution. This is a big part of why wall street pr types try to frame this as a general "anger with the 1% issue" rather than as an "anger with wall street" issue (and even then, plenty of banking activity is highly beneficial to the economy). This is why I was so disappointed to see the "occupy wall street" movement become so diluted ("occupy the ports! occupy berkeley!). In the early days, we could turn to the wall street people and say "hey, this is occupy wall street, not occupy google. we aren't you, don't think you get to hide behind a productive industry that actually creates some value." Now? Well, I wouldn't be surprised by "occupy silicon valley".

by jcnnghm 15y ago

mahyarm 15y ago

From what I got, Wall St./NYC has a similar or higher cost of living and very insane hours even at large finance firms for at least for the first 5 years. 14 hour days are very common.

jcnnghm 15y ago
I just looked it up, and you are correct about the cost of living. Manhattan seems to be about 38% higher than San Francisco.
- uptown 15y ago
  Cost of living in NYC is pretty insane. Housing is consistently high. Food prices are nuts ... think > $7 for a box of cereal. For taxes, you've got Federal tax, state tax, and city tax, plus some exciting new taxes like MTA taxes for the mismanaged transit authority you're already paying your fare to use. Want to own a car? Either park on the street for free where you'll need to move your car no fewer than three times a week due to street-cleaning, or you can get a parking garage for anywhere from $300/month to $550/month depending on the type of car you're trying to park. The list goes on and on. It's an expensive place to live. The upside is that anytime you take a vacation elsewhere it feels like you're stealing because everything is so comparatively inexpensive.
  - apaprocki 15y ago
    $7 cereal? $550/month parking? Yes, if you're referring to the most chic organic cereal you can find at Whole Foods and you're parking a Bentley. Alternatively, you can shop at C-Town or Costco and find any number of parking spots for $250/month. Zipcar is prevalent everywhere as well if you don't want the overhead. Don't get me wrong, NYC is expensive, but you don't have to make it out to be more than it really is. If you don't make the money to live in a certain neighborhood, think about moving.
    - AznHisoka 15y ago
      absolutely, you are so right. NY'ers are so spoiled and are used to overspending. "I like to take my girlfriend out to eat.. taxi here and there.." Please.. learn how to budget and spend wisely. Eat at home. Take the subway.
      - tptacek 15y ago
        This strikes me as similar to the common explanation of why Whole Foods "appears" so expensive when apples-apples comparisons can show prices there to be similar to those of Safeway; yes, the apples cost the same, but Whole Foods gives way more prominence to the super-expensive rare varietal organic local apples that cost 3x as much. Net result: whatever the absolute price comparisons say, it takes more mental effort to shop cost effectively at Whole Foods.
  - zavulon 15y ago
    You're talking about Manhattan. NYC is a big place. A lot of people live in outer boroughs (and I don't mean Downtown Brooklyn), where it's a yes, one hour commute to work, but you can rent a house with a driveway, or find parking with absolutely no problem (street cleaning once a week). And if you live in Manhattan, you don't need a car anyway.
    - bitwize 15y ago
      If you work in finance, then not living in Manhattan means you're not "serious" and will be passed over for promotions, etc. Basically, high rollers are expected to live a high-roller lifestyle. If you display signs of frugality it means you're still thinking like a poor person.

patio11 15y ago

I think it's time to dust off the pg essay on wealth. Wall Street pay skyrocketed because of measurement and leverage: basically, you can trace millions of dollars of revenue to the actions of a single individual with a high degree of certainty. Does that opportunity exist in Silicon Valley? Yes, it exists in spades. The engineers at issue are not as sophisticated as Wall Street employees about extracting that value or taking advantage of a very fluid employment market, but they also didn't get where they are by being stupid, and if you're not stupid and your weekly reports are routinely sounding like "Oh BTW I made us two million bucks" then people are going to start giving you whatever it is you care to get out of the relationship. There just doesn't seem to be any a priori reason to me why $120k is the correct price for competent engineering in a world where productivity directly associated with software is measurably exploding. (That gets no less true at $240k, $360k, or $1024k.) I don't know if I'd pick early startup employees as the likely beneficiaries of this dynamic, though. Some will end up working for the next Google and end up rich as kings, but that has a poor median-case outcome for individual engineers since they don't get to "invest" working years in 100 companies in parallel. If you want measurement and leverage there's a fairly good case to be made for going to work for the current Google (or AmaBookSoftEtc) and just engineer your transfer onto the pointy bit of the spear.

geebee 15y ago
This is indisputably a big part of why people on wall street get paid so much. It doesn't explain why the opportunity exists in the first place, but it does explain why the top players get so much money. As long as we're careful not to associate "bringing in revenue" with "creating wealth", I'm in agreement. My big problem with wall street isn't that top players get money - that's fine by me. It's that they acquire wealth without creating it, and in many cases inflict real wealth destruction on the rest of the economy. In general, I'd say that in a a good economic system, wealth acquisition correlates closely and positively with wealth creation. When it does, people tend to value and admire the wealthy. When the correlation becomes negative, well, you get the French revolution. This is a big part of why wall street pr types try to frame this as a general "anger with the 1% issue" rather than as an "anger with wall street" issue (and even then, plenty of banking activity is highly beneficial to the economy). This is why I was so disappointed to see the "occupy wall street" movement become so diluted ("occupy the ports! occupy berkeley!). In the early days, we could turn to the wall street people and say "hey, this is occupy wall street, not occupy google. we aren't you, don't think you get to hide behind a productive industry that actually creates some value." Now? Well, I wouldn't be surprised by "occupy silicon valley".