There were Senior Staff SWEs at Google NYC when I was there. It's not surprising that there's a Principal SWE now.
You're talking about anecdotes with regard to those highly-compensated engineers. They exist, but I don't think that anyone entering Google at 2015 has any real chance of becoming one of those 9-figure engineers from a SWE-3 start.
Growth is everything in both tech and careers. I don't think someone coming in to Google as a SWE-3 in 2015 has a realistic chance of being a 9-figure Distinguished Engineer while rising through the company. I don't think a manager does either - Google will be dead before they can climb the hierarchy. I think someone coming into Google as a SWE-3 in 2015 who then quits after a year or two and either joins a fast-growing startup or founds their own has an excellent chance of being re-acquired in 5-10 years as a 8/9-figure VP.
I don't think a manager does either - Google will be dead before they can climb the hierarchy.
You think so? Why do you think Google will be dead in the next few years? I'd bet on it being around, in some form, even 50 years from now.
A halfway competent manager at Google will make Director in 5 years and VP in 10. That might be, in part, because Google has so few competent managers that a "5" or a "6" is a local 9.75. And (for as much as I trash Google) I think the odds are that Google will be around in 10 years.
All of that said, I'd imagine that there are plenty of VPs and Directors at Google who are not making 8- or 9-figure packages. You can get VP on seniority alone at Google, just by not making mistakes once you're on the management ladder, but the 8-figure RSU packages require a bit of luck.
I don't think Google will be dead in the next few years. I think it will be dead in about 15-20 (because that is the typical lifespan of a tech company - witness Sun, SGI, DEC, Apple if Steve Jobs had not returned, Compaq, Microsoft, and many others). I also think that the average manager at Google will never reach Director, and indeed a SWE3 has a better chance of making Distinguished Engineer than a manager does of making Director.
The reason I believe this is simple numbers. Assume a Director is responsible for a department of about 120; he has 5-6 direct reports (all managers), who average 2 managers and a handful of direct reports. In total, the department has 15 managers, one director, and about 100 ICs. In a steady-state company (one that is not growing, which I think will increasingly describe Google in the near future), the only way for an existing manager to get the director job is for the director to vacate it. When will that happen? The competition for the spots the director would want to move upwards into (VP positions) is just as tight, and they are often filled externally. The competition for the CEO spot is non-existent; there is about zero chance that Larry will step down during his lifetime. So every single manager has to wait for the Director to retire or leave the company, and even then, he has only 1/15 chance that he'll be the one selected.
Things were different when Google was doubling in size every year; when a company grows that fast, it's ready for a new level of management every 2-2.5 years, and instead of multiple people fighting for the same spot, everybody on the team could be made a manager and a new level of fresh recruits placed under them.
On the engineering ladder, at least, promotions are not zero-sum. You can get promoted for building a system that has high impact, without having to displace anyone on the org chart. The problem is that "high impact" is hard to define for promo committees, and so they often fall back on metrics they're familiar with like "number of people on the team" when assessing promo cases. But the number are not against you the way they are when climbing the management ladder.
I'm not sure you have demonstrated what you are trying to show.
If I understand correctly, you've calculated the chance a manager is promoted to director as 1/15 * average number of directors that leave over the relevant time period.
But you haven't made any argument about the chance an engineer is promoted to distinguished engineer besides stating promotion non rivalrous. A system in which no one is promoted to distinguished engineer is non rivalrous, for example.
The false assumption is that you need to have 100 people under you to be a Director. It's a title, not an organizational role.
Managers benefit from a seniority system at places like Google because you get automatic level bumps after so long. Sure, the ladder will get longer at the top (there will be VPs and SVPs and EVPs and SEVPs and CVPs) as they have to invent new levels up there, but the fact is that it's just much easier for you if you're a Google manager with guaranteed promotions for average performance, as opposed to an engineer who has to do something special to get Principal+.
You could be right, though. Google may have to do an honest layoff (as opposed to the dishonest stack-ranking/PIP bullshit which is a layoff masked as a "low-performer initiative") and, when that happens, a lot of managers are going to find themselves on severance packages. The ones who manage to hold on will still be getting the guaranteed title bump every 2-3 years, unlike engineers to whom no guarantee is made, but it won't be the same, and being a manager at Google won't be the cushy, write-your-own-performance-reviews job that it historically has been. The churn will free up positions, but the game will (as you noted) feel more zero-sum than it is when it's expansion that creates them.
You're talking about anecdotes with regard to those highly-compensated engineers. They exist, but I don't think that anyone entering Google at 2015 has any real chance of becoming one of those 9-figure engineers from a SWE-3 start.