I think the word Salary here is a bit of a misnomer. Compensation is probably a better word to use. And the term programmer is probably incorrect in the top tiers here as you probably aren't strictly a programmer at this level.
For instance, it wouldn't be all that unusual for a programmer at a hedge fund to have a salary of $200,000 and a bonus of 1x that.
But its also very common for people at funds to keep the majority of their bonus in the fund such that if you have say $1,000,000 in the fund and it does 20% that year you can conceivably claim a compensation on the year of $200,000 (salary) + $200,000 (bonus) + $200,000 ( cap gains).
You can argue something similar if you work for a public company where your salary, bonus and capital gains on stock grants can be factored similarly.
Now there is probably some salary inflation going on here where people are counting compensation that is restricted over a few years as though they earned it all in the current year.
> I see about an offer per quarter of $500-900k base with $1-2M bonus (usually guaranteed for the first year) for pure technology role. Add more front office work and the bonus potential shoots up (but it's a tough gig at the moment at least).
This seems high and I don't know of any funds that actually guarantee tech hires a million dollar bonus regardless of what the fund does, I mean that's kind of the point of going to work for a hedge fund, you eat what you kill. If you and the fund do well you get paid, if the fund doesn't make money, you're not going to get a huge bonus.
But Niall Dalton, if you are listening and not lying about this comp, ummm, I'm available:)
Your cap gains example is irrelevant. If you have $1m saved up, you could make passive income elsewhere - stock market, mutual fund, real estate - the fact that you decided to park it at your employer's fund doesn't make the passive income related to your job.
What fund can guarantee better-than-market returns anyway?
There's a whole world of investments you and I don't have access to because we're a few $B short. As a perk some shops allow employees some access to their funds, like a parallel to RSUs or equity.
Calling it "a whole world of investments" is a little extreme. Access to almost all asset classes is available for even the smallest of investors.
Absent a mysterious Renaissance-like trading algorithm that magically prints out-performance, diversification is the only free lunch, and it's cheap and easy to massively diversify these days.
I mean there are lots of funds/managers you can only invest with if you have a few hundred million to play with. Sure, they invest in the same asset classes you do except in theory they do it way better.
I don't understand why people parrot this sentiment all the time. Lots of crappy startups hand out worthless equity -- would you say "most tech stocks aren't worth anything"? Sure there are bad investment firms out there and those don't tend to last very long. There are many firms which handily beat the market, they wouldn't be around if they didn't.
You would think so, but taking into account fees, there are actually ZERO funds that beat the market over a 30 year period. You can research this on morningstar. Maybe there are some super secret private funds out there that beat the market over the long period (Madoff's fund was one of them).
So ya, you would think they wouldn't stay in business, but marketing and complexity is powerful.
Their best trick is to hold a ton of funds in their portfolio then show you the ones that have had a good run the last 10 years. Then of course a different ten in a few years. Hold enough assets in enough configurations and of course you will have some winners over shorter periods of time. But good luck guessing which ones.
Where are you getting your data from? Most well-respected shops don't publish their returns publicly. It's kind of an Occam's Razor thing -- is the entire trillion dollar investment industry really run on hopes/dreams/unicorn tears or is it more likely that the guy on HN who read an article from Warren Buffet not actually an expert on the industry?
I wasn't aware that Morningstar had publicly available hedge fund performance data. What do they show for Renaissance's Medallion Fund over the last 29 years?
It of course doesn't have hedge funds, which are black box. And Renaissance is the "blackest". I find it suspicious that the only funds with long term performance that "beats the market" are unpublished and secret. Madoff's fund was on of the few that beat the market consistently too.
Famously Renaissance has an employee-only fund that's provided insane returns since the early 90's [1]. It's kind of a ridiculous claim you're making -- that the entire trillion dollar industry is struggling to beat just sitting on the S&P. Capitalism doesn't work that way.
Still irrelevant - funds do not beat the market and you shouldn't be parking your money at your fund, even if your job gives you "exclusive access" to it. If you did, and you miraculously beat the market, that was due to luck and shouldn't be considered a perk of working there, since actually the perk is to get below-market-rate returns.
The average fund minus fees does not beat the market. This does not mean "no funds have consistently beat the market"
However one of two things happens to funds that consistently beat the market. They either grow to the point where they stop beating the market, or they stop accepting new money. This means that any investor looking to put their money in one a super fund won't be able to, because it's too big, or won't take your money. However this second restriction does not apply if you are working there. Some of these funds give access to their employees.
The other option is that some funds give fee discounts to their own employees. So even if the fund doesn't beat the market minus fees, they beat the market sans fees.
Completely agree with this. You can't count your hedge fund's returns as compensation. Most hedge funds are terrible and I don't want my money anywhere near them.
It's like working anywhere else. If you work at a fund you believe in, you want your money there. If you work at a startup you believe in, you want equity. If you know you're working at a terrible hedge fund why are you working there?
You can't divorce yourself from the business. If the company goes under or does something illegal or morally questionable it affects you. Either way, I'm just saying it's entirely comparable to receiving RSUs or options from a non-finance firm.
I'm not lying but my comment is being misinterpreted; I should have been clearer.
That's an annual comp number, not a quarterly. I was trying to say I see a certain rate of offers flying by to/from some people, at those levels.
Also; bear in mind that some of the offers are under the assumption that certain technology is rebuilt and/or replicated. (Personally I don't touch such offers). So it's not just a regular thing, it's folks attempting to hire to replace/replicate/compete on certain tech too.
The offers I've seen that are predicated on build a major new platform to support a firms activities, have included a guarantee for the first year (essentially a fancy perf bonus) given that the entire year would be spent deep in the bowels of hard systems work that would only come to fruition later.
(edit to add comment re why some such offers have a first year guarantee; being vague to protect the guilty).
> Now there is probably some salary inflation going on here where people are counting compensation that is restricted over a few years as though they earned it all in the current year.
I've actually found that people tend to be very careful about counting $600k in stock over 4 years as $150k per year.
Articles like this are kind of frustrating, for the implication that $250k is standard for a few years experience, and you can easily get it with less.
That's really not been my experience. Not everyone - not most people even - work at Google.
Related question - at a mid-stage startup (say 100 employees), how does option/stock compensation work? Do they regularly give you more (like big companies do) or are the options associated with signing all you get (and their growth is how they're an ongoing part of compensation)?
I took the post to mean $250k was the low end of the range for highly compensated programmers.
Something more like $150k or $180k is probably a more realistic mid-career average compensation (with salary somewhat less than that, in the USA).
Complicating the discussion is HN skews to the high end of the range. Not only is it very SV-centric, the type of programmers who post here appear to be atypical (high performing, entrepreneurial, etc).
> Do they regularly give you more (like big companies do) or are the options associated with signing all you get (and their growth is how they're an ongoing part of compensation)?
Most places I've seen give you one dump at sign-on and that's all you get ever. I understand some companies refresh you every so often.
I ask because when you are one of the first ~20 employees you get a meaningful percentage, like say 0.1%. In that case the value goes up with the value of the company. .1% of a company that's worth 200M is $200k, which vesting over 4 years is... $50k (obviously strike price, company actually still existing, etc, are factors)
When you work at a big company like Google, you get a regular amount of equity compensation that translates directly (via public markets) into dollars, say $50k, every year.
But if you join mid stage... you usually get a number of options which translates to a very small portion of the company. Like even if the company had a unicorn IPO, it might only be $10-$20k.
I wonder if there's some kind of bridge that's typical between the startup state (where there's a sizable option pool to hand out) and the Post IPO state (where RSUs are handed out as a big chunk of compensation)?
I think the answer to all your scenarios is: It depends on the company. Some companies (regardless of size) give refreshes, some don't. For those that do, some do it discretionary based on performance, some just hand a little to everyone. Some companies give options, some companies give stock. Some companies give "thanks for working here you're so great".
Most employees even in Google don't make $250k base.
Most of bay area is littered with low-profile companies like Brocade, Broadcomm, McAfee, KLA-Tencor, Micron, Hortonworks, Arista etc. Most "senior" engineers in these companies don't make $150k base.
Some guys just have a retarded view of what companies are paying. Outside the top 10 high-profile companies, most engineers in the bay are slaving away in low-mid 100ks
Didn't realize AMZN paid that well. Every ex-amazoner I know left because Amazon was a lot lower than industry. As soon as they could jump ship, they did.
India has huge inequality among software engineers. While $5400 is possible, but 35 lpa (and more), about 10x that number, is also possible for someone who is not exceptional.
For anyone else who doesn't easily process abbreviations from Indian English, "LPA" stands for lakhs per annum. A lakh is 100,000 and the implied currency is INR = Indian rupee.
As such, 35 lpa = 3.5 million INR/year ~ $52,600/year at present forex exchange rates (PPP value is another story).
She has just accepted a new job that'll start soon, so she'll hopefully make some more. She is requesting 4 lakhs per year (~$6000 dollars) but doesn't know if it'll be that yet.
These articles are correct and $250k is not exceptional for a few years of experience. They are talking about total compensation and not salary. If you think this is exceptional then you owe it to yourself to respond to some of those LinkedIn messages. And, no, this kind of pay is not restricted to NY/SF/SV/Seattle.
Look at /r/programming, do you think these people are pulling $250k. They are closer to the average. If you think $250k is normal you're in an exceptional bubble.
E5 at Facebook all make north of 250 total comp... mány make far more than that due to discretionary equity. Even e4 total comp is at or just below 250.
I believe it, but this is more of an argument between the exceptional vs the broader industry. Me and the other person (I think) are looking at the industry in a much broader sense because there are various reasons someone would even make it into Facebook or Google in the first place which are not entirely dependent on ability. Even the majority of people at Google and Facebook are not at a senior level which is roughly what I think E5 is if I recall correctly.
HN discussions are insanely biased. Our idea of what's normal is skewed by who we know. Everyone knows that one guy who is somebody's brother's nephew's co-worker's roommate who makes $250K at Google. The vast majority of practicing tech people in or out of the Bay Area are not pulling down that much by a long shot.
Are you really willing to tell me that that the average engineer in 3-6 years can pull in $250k? Your own source says the median is $100,690. How long do you think those people have been working in the industry? Are they all just fresh out of college? So if these people all just work 3-6 years should I expect a bunch of multimillionaires? Can the industry support $250k salaries for a wider amount of the population?
The average developer is average, not awful. You can make more if you are better than average and know the right people and speak the right language. I know people who are making $350k, but they are very much an exception and we both know and understand this. Much of how much you get paid is based around who you know, your location and your cultural fit. Most people do not live in the bay area for various reasons and salaries like that are extremely uncommon outside of there and the upper echelons of the NY finance market.
I was exaggerating, but if you save your money while making 250k you can easily live off 30k and pocket the rest. It's not hard to become a millionaire off of that salary in a very short amount of time.
> Most people do not live in the bay area for various reasons and salaries like that are extremely uncommon outside of there and the upper echelons of the NY finance market.
As someone who has actual experience with this, it's easier to get a high paying job in those areas because that's where the hard problems are being solved.
Hard problems are usually solved in high cost of living areas because you need to pay your employees a lot of money and those employees usually prefer to live in high cost of living areas. I actually have personal experience with this.
Yes, the cost of living argument applies if your salary is at the low end of the scale.
If you're solving hard problems at a company that values that kind of stuff, then you can makes just as much anywhere else. I actually have personal experience with this too.
No, the cost of living argument does not apply at the high end of the scale. Cost of living starts to become irrelevant as you make more money.
Sure, rent in NY is $60k per year vs $24k per year in Oklahoma, but it's just not that important if you're making $1m+ year.
Ok so first off, rent in Tulsa is 12k at most for a full house.
Second off a lot of the high cost of living has nothing to do with solving hard problems, if it did the civil engineers would have solved the hard problem of fixing the housing market in SF. What you are essentially arguing is Tom Cruise 2.0 makes 6 million a film after a few years in the industry so therefor everyone else sucks which you can tell because they don't make 6 million. Being generous I would claim it's a survivorship bias.
> Second off a lot of the high cost of living has nothing to do with solving hard problems
Actually, it's directly related. People who solve hard problems at companies that value that sort of thing make a lot of money. Generally, people who make a lot of money want to live in nice areas. Nice areas become expensive as housing gets bid up by high earners.
Nice is relative. People who make a lot of money want things relative to their interests. Areas become more expensive due to poor planning from civil servants more than Google salaries. NYC, DC, Boston, Atlanta, Austin, London, Brussels and Berlin are all cities which are also working on "solving hard problems" but they don't have nearly the cost of living problems that SF has.
Also, people who make a lot of money, especially in a given field (like tech) tend to want to live with each other, which really exacerbates the problem in markets that resist change (like SF).
Of course, allowing huge office towers to go up but refusing residential development doesn't help.
But your own link has the median pay (salary) across the job role at $100k. Is total compensation typically 250% of salary? That's a lot of bonus money and benefits.
It also requires a degree of knowing your worth, asking more than your worth, doing insane amounts of work and being very good at pricing and marketing yourself.
I personally don't care that much about money, so I tend to work for a year or two and then take a year off:
Unlike a lot of other careers, this isn't as difficult to do in software, and you end up working for better companies who care less about having a warm body that will stay there forever over having someone who can think creatively.
A somewhat related, but distinct question is: how do you get the skills to make those high salaries?
I don't care about salaries persay, but I do care about being valuable. Of course, the two things are very related.
Here are some things I've heard people mention that are chicken-and-egg kind of answers:
- Get a great mentor
- Work at a great company
- Work on a high performing team
- Work on a difficult product
Unfortunately, all of these presuppose greatness to begin with, and only help to become even more great. Which is nice, but not useful for someone trying to get there to begin with.
I'm in my 2nd year of being a "professional", and I worry if I'm on the right trajectory, or not. By the way, if someone is reading and is willing to spare 15 minutes of their time I'd love to get your advice, email in profile. Moreso if you're based in the east.
The easiest (or most common) way is to start young: go to a top university. This makes it far easier to jump into a top company. Then you're mostly there, without even necessarily programming anything exceptional.
Otherwise, you could get really good at interviewing, write publicly (book, popular blog, etc.), give talks at conferences, create popular open source software, etc.
That's the first level, obvious credentials. Don't forget that legwork like SAT prep classes, or presentations which don't teach you useful skills can still open doors.
Next is networks of people that will vouch for you. This does not necessarily take a lot of effort, but being the only resume someone is looking means you just skipped a lot of pre-filters. "I was thinking about possibly jumping ship. O your looking for someone? How about we do lunch and talk about a possible fit."
Now add presentation; speech patterns, dress, non verbal indicators, but also what subjects to bring up in conversation. Pull this off and people will often skip the need for in depth evaluation based on assumptions.
This is [sadly] the accurate advice. While "love what you do" and "learn a lot" and "improve your skills" sound nice, the reality is that success more often than not comes from pedigree (what school you went to, who your parents are), people (who you know) and polish (how smoothly you talk/dress, how you carry yourself, confidence, ability to make small talk, etc.).
EDIT: I'll also add "self-promotion". So, the four P's: Pedigree, People, Polish, and Promotion.
> "I don't care about salaries persay, but I do care about being valuable."
You should care about salaries, even if you don't care about salaries.
Yeah that sounds insane, but salary is a signal for ability. It probably shouldn't be, but hey, I didn't make these crazy rules.
Having a high salary opens doors to many interesting jobs doing really interesting work. For a long list of (very unfair) reasons, someone making $300k gets taken more seriously than someone making $100k (even at companies that can't afford you!).
So yes, you're right about working with great mentors, at great companies, and with great teams - but you should also focus on getting paid more. They're all tied up together and each contributes to the others.
As to how to break into the cycle of high salaries -> high impact work -> higher salaries -> higher impact work...
That's a good question. Joining one of the AppAmaGooFaceSoft big corps is one way about it - the hiring processes at these companies are less network-reliant than many other jobs, and all are famous enough that it massively opens the door to further work. I had the good luck of starting my career at Amazon, which opened many doors.
(I also had the great luck of not staying at Amazon)
Right on. I had this cycle as freelancer. Higher rates resulted in higher quality work which resulted in higher rates.
People will respect you less if you tell you don't care about money. Unless you are superstar who makes $1000/hr while saying that money is not important.
- Love what you do, this is extremely important, although you have goals in mind, you should enjoy the process to reach your goals, this would make you work harder, and failure wouldn't be a big deal, as you enjoy it.
- Practice, solve useless problems for fun, sharpen your skills, until you become really good at what you do.
- Really know what you are good at, and what you are not, and don't be afraid of pointing out what you don't know, even to someone who is interviewing you, and always know why you don't know, and if you need to know what you have to do.
- At this point, have the mentality whenever you go to an interview, that they would gain more from hiring you, that you would gain from being hired by them.
If you want to be successful, the single most important skill you can probably cultivate is the ability to communicate well and get along with people.
All else is secondary at best.
Most people in any job are at least competent. It's not that hard to rise above "merely competent" and you get many extra points if you're personable and can explain what you're doing to management. Quietly sitting in a corner, coding away, isn't going to get you anything other than average results.
Most of your list is luck, or chance. However, you can choose to work at a great company by only researching and applying to, great companies. The interview is where your interaction skills will prove useful.
This is what I've noticed as well. Most devs can't communicate for shit. Being able to just talk is often enough to get your foot in the door.
It also has the added bonus of giving you more power in the workplace. If you can communicate well, you can get more ideas on the table and implemented. The more ideas you implement, the higher your worth clearly is.
The other thing I'd note is that your raw dev skills are a product of how much effort you put in. If you do dev purely as a job (minimal pre-job training and relying solely on on-the-job training and experience to keep up) you're going to be stuck as a mediocre dev.
To be truly successful you need to be seeking and actively consuming knowledge all the time (at least in your early career). This means keeping up with your chosen dev scene and languages, and actually playing with them and learning them in your own time.
Companies value someone who knows their shit, knows it well, and can communicate how to apply that shit to their product.
I think being a dev is a unique career because unlike most, there aren't just a few advancements every year to care about, there's several every month. And those advancements aren't just something you can maybe do in the future once a paper is vetted and reviewed, they're things you can read about, toy with and probably apply to your product straight away.
Well, nikcub isn't actually wrong. The CBA is the contract that dictates the relations between the league and the players association. It sets terms for the league, the salary cap, and the even procedures regarding the draft.
As far the cap goes, there are two caps: the soft cap and the hard cap. The soft cap is what you're probably referring to. The soft cap is usually broken all the time, as teams use it to retain players and whatnot. Think of 'Bird rights'.
The hard cap is what I imagine nikcub was referring to. A hard cap cannot be exceeded for any reason. Even in a sign-and-trade, since I think 2013, you'd have to waive a player to be below the cap, or make sure payroll is below the hard cap in the end.
In the context of nikcub's comment, I think he was referring to the hard cap.
In theory the highest salary a programmer can make is infinite. Think WhatsApp founders, $20 billion acquisition.
The numbers in this post probably apply to less than 0.01% of developers. Most developers don't even come close, even in Silicon Valley. I have seen people make those numbers, including one million compensation, and the only explanation I can come up with is: right place, right time.
I'm sure there are exceptions, though.
There's only three ways to get above average returns over time: get into one of the top 5 tech companies that pay well and insert yourself into important groups and ride a fast track wave; become a premium freelancer and charge premium rates; or get into a rocketship startup and get a lucky outsized exit. Lucky because very very few startups have a good exit (for employees). Most die, or exit in a way investors and founders make some money but employees don't make anything. Hello liquidation preferences.
Bottom line: get good at what you do, stay in the top 25% in your area, build a reputation, and go to places where you can add value. Negotiate.
There is no limit on what you can make, especially in the engineering world. If you hit a limit at a day job, the limit can be removed by working for yourself and running your own business. Then you will be limited only by how much your customers value your work.
Anybody who claims a $250k compensation package is normal in the US is bonkers. Somebody posted it in a sibling thread, but the US BLS has the average salary at $100k. Add benefits and bonuses and you might hit $200k, but even that's a stretch.
I'm surprised to see the omission of top machine learning engineers from this article, who are currently priced in the $1m-5m range. Facebook has placed such offers to industry experts, as well as to the world's strongest PhD students in computer vision. I am under the impression that other tech giants are competing similarly.
(Note: when I say top, we're talking about a pool of <500 people worldwide.)
Fyi... MZ's salary is just $1 a year. Other programmers with salaries of $1/year are Larry Page and Sergei Brin. (But setting aside pedantics of "net worth != salary", I think we all get your point.)
Articles like that are very annoying. Annoying, because this is not actually the highest salary an engineer can make, but the highest salaries reported. The word "can" is used in the wrong fashion.
it seems that just like with any other market, scarcity dictates the price. however, aiming at being the ultimate specialist of a little known piece of technology is a very risky bet.
On the other hand, you don't have to make $500k+ for too many years before employment just isn't a big concern any more. Rumor is that's what you can make as an expert in image processing.
Indeed, but it does probably takes a bit of time before you're proficient enough to be worth that amount. Plus, the time you spend working with this tech, is also a time during which you're most likely not learning something new.
And people wonder why everyone wants into the industry... alas it's top talent that command these salaries, I'm far from there. Qureshi's story is a fun one I've heard him talk about it on the Software Engineering Daily podcast. Knowing how to negotiate well and being a talented engineer can go a long ways.
Strictly answering the question posed: O(100M) USD. (evidence: all the "first engineers" at AmaGooFaceSoftFlix).
If you are above average but not super smart, willing to put in hard work and have normal interpersonal skills (i.e. not being a total jerk, know how to talk to groups, know how to write effectively etc), here is how you can be a millionaire in 10 years:
1 year: Practice super hard for tech interviews. They are notoriously difficult, but all you need is good understanding of the best reference book for {Algorithms, Data structures, Computer Architecture, Operating Systems, Databases}; which is basically what they teach you in undergrad CS. Online, you will find plenty of "how to crack google interview" links. Then apply to a few small companies as "warmup exercise". Finally, apply to all the big names AmaGooFaceSoftFlix in high-salary area (SV, Seattle, NYC) and get in one of them.
next 9 years:
1. Give your best in the first 3-4 years. If your group is bad (mainly due to bad manager), suck it up - you can easily switch teams in most big companies within 18-24 months.
2. Aim for promotion every couple of years. Find senior people who are friendly, make friends with them (plenty of opportunities to hang out socially in your early years), ask them career advice from time to time etc. With this strategy, you will be E5 in FB or Senior S/W Engg in Google (or equivalent) in ~4-5 years. This level pays ~250-300K in Salary + Bonus + Stocks. Previous 2 levels should pay 150-170K and 200-230K.
3. Don't get daunted by "high cost of living" memes. If you are at a big company on a good trajectory, you can easily afford it in SV/Seattle/NYC.
4. Out of your total earnings, allocate 25-30% for taxes, 30-35% for living expenses, rest for savings (preferably 401K, Roth IRA via backdoors etc) in low cost index funds.
5. Beyond a certain level, either you will need a bit of interpersonal (political?) skills or super smart chops in some specific area to grow further. But decent knowledge of some stack plus hard work can get you to next level within next 2-3 years, at which point it starts paying really well - >400K, bulk of which is from stock grants.
After 10 years, your savings will nicely grow nicely close to 1M USD. If you have have purchased house, your home equity may replace some of the liquid net worth.
Disclaimers:
1. I assume ability to work in the US
2. I am not counting for outliers in either direction (some folks become director+ in 10 years, some folks languish).
3. I am basing this on my own experience and that of many of my friends. Again, we were lucky to work during a period of tech boom, cheap money, amazing stock rally etc etc. Who know what next 10 years will be.... but again, life is not that fragile either.
For instance, it wouldn't be all that unusual for a programmer at a hedge fund to have a salary of $200,000 and a bonus of 1x that.
But its also very common for people at funds to keep the majority of their bonus in the fund such that if you have say $1,000,000 in the fund and it does 20% that year you can conceivably claim a compensation on the year of $200,000 (salary) + $200,000 (bonus) + $200,000 ( cap gains).
You can argue something similar if you work for a public company where your salary, bonus and capital gains on stock grants can be factored similarly.
Now there is probably some salary inflation going on here where people are counting compensation that is restricted over a few years as though they earned it all in the current year.
> I see about an offer per quarter of $500-900k base with $1-2M bonus (usually guaranteed for the first year) for pure technology role. Add more front office work and the bonus potential shoots up (but it's a tough gig at the moment at least).
This seems high and I don't know of any funds that actually guarantee tech hires a million dollar bonus regardless of what the fund does, I mean that's kind of the point of going to work for a hedge fund, you eat what you kill. If you and the fund do well you get paid, if the fund doesn't make money, you're not going to get a huge bonus.
But Niall Dalton, if you are listening and not lying about this comp, ummm, I'm available:)