I've seen an infinite amount of posts on this site claiming that the compensation for software engineers at tech shops is the same as most careers on Wall Street.
I understand the work-life-balance at tech is likely incredibly better but I am confused as to how comp is similar in most cases.
After doing a few Google and Glassdoor searches, it appears that 90% of software engineers' total comp caps at $200 - $250 k, which is definitely exceptional in life but seems low compared to most mid-level/senior roles on Wall Street (even outside IB/PE). I know that some SWE, like 10%, get % of equity in their firm but it seems more rare than the status-quo.
Love to hear more explanations into comp and if these numbers are accurate for tech.
the comparison of a SWE to a non-technical role on the street is not a good one. the proper comparison would be quant v quant v quant
that said, I have a little familiarity with tech comp as most of my clients are in tech, here's what a late 30s/early 40s non-technical/non executive person can expect
175-250k base, 25-50% target bonus depending on if role is sales and company performance, 50-75% target stock award
hypothetical
$200k base
$50k cash bonus
$150k stock award (grant, not vesting)
however, if you've been with the company for years and the stock's compounded at 20%/yr like many of these tech names, your vestings will likely be in the $150-250k so total W2 assuming no deferred comp is in the $4-600k/yr range
on the executive side, expect 50-200% more cash comp (obvi depends on level) and much more equity
on the SWE side, for a high performer the stock awards and bonus can be significantly higher
if you're at AMZN however, your cash comp will never be more than $175k, they make up for it BIGLY with equity
https://www.levels.fyi/comp.html
Levels has all the info you need: https://www.levels.fyi/company/Google/salaries/Software-Engineer/, http…;
Generally tech companies 'cluster' around each other based on their comp strategy. The best paying shops are the likes of Google, FB, Snap, Airbnb, Netflix, Uber etc, then one tier down w/ Microsoft, Amazon, Salesforce, Yahoo, eBay etc. Then the likes of Expedia, Wayfair, Autodesk, etc and lastly Cisco, Oracle (non-OCI), Intel, etc. And comp is largely driven by level in the org - usually denoted by 'L' and some number but they can be whatever structure the company has termed it to be.
Most folks in 'core roles' (Product Management, Engineering, Design, UX Research, Data Science / Analytics, Technical Program Management, Design Program Management, Product Marketing) don't make it past the equivalent of Google's L5 or L6 but the few (let's say top 5% or so) that make it past that rake in a fair haul of cash (e.g. L8 at Google: https://www.levels.fyi/company/Google/salaries/Software-Engineer/L8/) - i.e. high six figs to low seven. And if you make it to the exec level.. well, that's a whole different story. Levels past L5 tend to be leadership roles either technical or management and require evidence of various levels of impact - you usually need excellent social and leadership skills to get to those levels. Worth noting, however, is that if you're 'really good' in tech, your promotion timeline could be truncated significantly and you could blitz past levels.
As for the crux of the question.. most reasonably achievable levels (accounting for probably 95% of people) for ICs in core roles at tech companies will make ~$250-500k a year at the top companies and more like ~$150-250k at lower paying companies. New grads will make anywhere from $130k to $200k+ total comp. Structure is typically: base salary, annual bonus (if applicable) and value of stock vesting every year. Netflix is a bit of outlier in that they pay entirely in base with the option to exchange part of your base for discounted options. Amazon has an annual cash offset for your first 2 years of tenure due to their backloaded vesting schedule for on-hire grants (5% Y1, 15% Y2, 40% Y3, 40% Y4) then it's just base (w/ a low cap of $160-185k depending on where you're based) and value of annual vesting stock.
Annual vesting stock is either derived from the vesting schedule of on-hire grants or stacked vesting tranches of refresher grants (awarded every year) or both (hence the 'cliff' you experience in total comp after year 4 of working at a company).
The equity and stock vesting schedule at large tech companies has gone through the roof. No one on this site realizes it -- likely in denial. I grew up and live in SF. It's basically the only thing tech bro's talk about nowadays.
I'm also referring to tip top tech SWE roles. Think Stanford / Berkley CS / Math double majors. Multiple offers and hops from say a google to an FB after 2 yrs.
500K would be below market in a good vesting year (which has basically been every year for past 4 years). Don't even ask about what the Airbnb guys pulled after the IPO. Makes MD's look like sht.
When you make your money in tech, will you be able to invest as well as the guy that was in PE?
Definitely not.
Except for the fact that their stock bonuses have been averaging 20% returns...
There is like, zero correlation between working in IB / PE and being a good personal investor.
A lot of posts already cover this, but the short story is this.
The best part about the tech rat race is that it's not up or out. It's much easier to chug along and hit 400-600k comp than it is to reach that in Finance/Law/Consulting. At the same time, if you're really good you can earn >1M+ similar to all of the tougher professions. Also, the potential upside is just as high, if not higher. Big tech c-suite massively outearns wall street c-suite.
I’m so tired of this tech bullshit. I can say that I earn millions at associate level but that wouldn’t be true.
I know a ton of people working tech who earn slightly above average wage with little stock comp.
people you are referring to are a small % of all people working in tech. On top a lot of the time they will earn a million or so at exit and then they will continue working on the basic salary + bonus wondering what the fuck to do with the money because their financial literacy is close to zero.
let’s then compare top people in finance with top people in tech. will top people in tech work leas? It may be the case but from my own experience ANY PERSON WHO EARNS A LOT HAD TO SACRIFICE A TON OF THEIR FREE TIME. There is no such thing as earning a shit ton of money doing fuck all. Stop trying to sell this bullshit idea that people who earn a lot don’t work their asses off for it.
Now if we look at top finance people, they will be making close to 200k at associate level (post covid pay rise) and ~100% bonus or more, which is already =$400k. Didn’t you say it’s not achievable? Guess what , thats what fucking associates make in their first year.
You say exec people make >1mil in tech? I’m sure you will be surprised how much money partners in PE firms print and that number will have 6 zeros but it won’t be even close to 1mil
I don’t even want to continue this conversation. Go to SF and don’t come back to this forum.
Who cares what the nerds make? Our path is chosen, don’t need to look in the wallets of others
I'd take less of a paycheck instead of having to deal with SJW Tech companies.
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Keep in mind that this forum forgets that 95% of software engineers are not working for the Big Tech FAANG companies or unicorn startups. Sure, I'd bet that SWEs at FAANG have the potential to clear more than an MD at Goldman in their careers, but that's only because they are the best in their respective industry that has grown exponentially in size the past decade. Anyone who had a good amount of equity in those companies would in theory out earn at least half of Wall Street.
My point is that, either way, to surpass the Wall Street comp, a software engineer needs equity (which is the only way to get to the stratosphere); otherwise they're capped at a $200k salary range with modest bonus. Not to mention, many software engineers are hired as independent contractors for non-tech firms so you know they aren't clearing Big Tech money.
Personally, I feel that software engineering does offer a better work-life balance/compensation than virtually all Wall Street careers. There is more luck involved with the sky-high comp for tech than there is with Analyst->MD or IB->PE but the work might be more meaningful for some and you're still clearing a killing. I like to think that besides the day-to-day and background, Software Engineering is most similar to Corporate Development. Both offer a similar salary and work-life-balance, and then the real meat is in the equity options you get.
How about keep in mind that 99% of the finance industry does not work in IB, lol
Download app called Blind and proceed to feel bad
The honest answer here is that big tech wins - you get a way easier lifestyle (dog at the office, snacks, video games / ping pong, sleep pods, other perks), mental health is way better as you know your firm actually cares about your well-being, still you have to work hard and there are large expectations, average cash / bonus pay is lower than finance but taking into account stock and vesting schedule historically you would be filthy rich. Obviously this argument is regarding big tech (Facebook, Google, Netflix, etc.) compared to Wall Street so apples to apples comparing the top 1% of tech to the top 1% of finance. And you get to work remotely too. This hybrid work environment will likely go away the minute company performance declines. If you want to compare IB to working at a startup, or mature tech company like IBM, then sure IB wins hands down and you can feel superior to them.
The beautiful thing is that you guys are all smart enough to learn how to program and if you want to make the career switch it is up to you.
The amount of insecurity in this thread is hilarious
I knew investment bankers were insecure but didn't know they were this insecure LOL
I studied CS and did a sophomore internship in SWE and have lots of friends in tech, so here's my 2 cents.
Like other people have mentioned, comparing the average finance salary to what someone at Stripe makes is stupid. At that point, compare it to Centerview or whatever the highest paying finance firm is. I'm not sure why there's this conception that everyone who wants to do SWE lands at Google/FB, but its the same as banking- the best SWEs have tons of doors open but it's still not an easy industry to break into. At a more middle of the road SWE gig, you're looking at like 100-120k all in for a fresh grad, and this can be even lower. After bonus, I came in basically right in the middle of my SWE friends for my first year out of college income- definitely knew a few at big startups/FAANG that cleared closer to 200k, but my ~150k definitely beat out a few of my friends at less prestigious companies.
The other thing that's been mentioned a bit in this thread is that you're probably at the whims of your stock price more than most finance gigs, and, at least in my opinion, it feels very out of control. I interned at a series C startup and just felt like my contribution (or even the contribution of a fulltime SWE) just doesn't feel like it has enough impact on the trajectory of the business- CEO/fundraising/etc is what is likely going to ultimately determine if the company goes public and those stock options make you rich or if they end up worthless. At least in something like PE/IB there's still firm-wide carry but it feels like your bonus is more determined by your own work (at the senior level).
Also, not sure why everyone here thinks its so easy to go from FAANG -> hot startup to get big equity -> IPO and you get rich. if you're joining a startup with any amount of substantial equity, it's going to be pretty early stage. There's an enormous risk of failure. To counter some of the stories of the filthy rich SWEs you see on this thread, I've also met my fair share of 50 year old SWEs that left great companies in their 20s, ended up jumping to startups that ultimately became sinking ships (typically through no fault of their own), and now they're stuck making 200k a year trying to avoid getting fired because there's a serious stigma in the SWE industry against older workers who don't have serious historical successes.
All of these people (including me) suffer from a psychological phenomenon called confirmation bias. We chose Finance so we have to justify it to ourselves that if was the best decision. In reality tech is the way to go. Studies just show people are happier.