Do New Grads In Tech Really Make $250K+ Straight Out Of Undergrad?
As a disclaimer, I go to a highly ranked school, so I’m sure there’s some inherent selection bias here.
Still though, one of my roommates who graduates this year and is doing Applied Math just told me he closed down a $275k offer from Google. $125k base, $400k stock/4 years, $50k signing bonus. Are these actually legit numbers?
If so, wtf. I took exactly the same classes as this guy, did basically all the same math/statistics. Shit, I even mostly use Python because Excel is a pain in the ass. I thought my offer was really good, getting into a top tier IB division with a clean $120k plus basically guaranteed year-end bonus. I’m pretty sure my offer is within the top 1% for starting salaries. But apparently top 1% of finance is less than half what you can get in tech? If that’s actually true, then fuck finance. I’ll be a tech bro all day and wear my pajamas to work.
More seriously though, does anyone know what the salary distributions are in tech? What percentile is a $275k offer in? Do people regularly get these kinds offers from FAANG style companies?
That sounds about standard for STEM graduates of top tier CS schools (MIT, Berkeley, Stanford, CMU), or Ivy League level schools. Lower ranked schools' graduates might get the same salary/bonus but less stock. It's all about locking in the kids so other firms don't poach them.
This is why GS now pays their Technology graduates $125K + $xx,000 bonus - to recruit those students who otherwise would have gone to FAANG
The big carrot here is the $400k stock. However, just looking at that is short-sighted.
Things are not so easy to compare once you are higher up the ranks. There are very few positions in Tech which will pay at the level of IBD ED/MD (and even VP-in-a-good-year). Most people will cap out at $250k-300k base and the bonuses are not nearly as lucrative as in banking. $300k is senior VP base salary. The absolute # of people in Tech making above this is much fewer than the # of ED/MD in IBD divisions (there are many, many of them!)
Of course if you talk about lifestyle and $$ vs hours worked you cannot compare these two industries.
Tech guy chiming in. I would say $150K is more of the norm. Generally, to get those top tier compensation, you need to receive multiple top offers and negotiate up. Which is a feat itself because you need to time your interview timeline.
Let's be honest here. How many IB analysts actually even get to ED/MD level? I know it sounds comforting to feel that you have a "higher" ceiling but it's much more difficult to get there then you would think. These high tier tech guys are earnings associate level compensation without busting their ass doing 80+ hours/week. Keep that in mind.
This is a great point, people in IB often justify by pointing out the higher ceiling but making it to MD is the tech equivalent of making it to senior manager or director levels which pay 800k-1M+ https://www.levels.fyi/?compare=Google&track=Software%20Engineering%20M…
I would personally be willing to bet large sums of money that the average person who starts off in IB ends up with a higher compensation mid-career (30+ years old) than the average person who starts off in tech.
Making it to MD is easier than making it senior manager/director in tech. You have to account for all of the guys starting out in IB who leave for PE, HF, VC, management consulting, entrepreneurship, big law, politics, etc. (all of which also pay as well as senior managers/directors in tech, if not more). After removing those guys, the road to MD is a lot less competitive than a lot of guys on this thread are making it out to be, albeit you'll probably still have a shittier lifestyle than you would in tech. I also don't think the $800k in tech compensation (outside of the c-suite guys and founders of course) is very widespread. I haven't seen much data online to support the $800k being common for more senior people in tech, whereas the compensation for IB, PE, management consulting, etc. is very accessible.
The higher ceiling absolutely does materialize. You've gotta fuck up pretty badly to not make at least a decent living after starting out in IB.
Doesn't work that way at all.
If you meet the interview bar you get a standard offer no matter what school you come from - there is a bit of delta if you have competing offers and negotiate but that's it. It's more of a correlation of more people from top schools being interviewed in the first place and more of them hitting the interview bar for top companies.
Companies do generally fall into different "tiers" though when it comes to comp. The likes of FB, GOOG, Linkedin, Snap, Dropbox etc all pay a lot higher than say a Zillow, Expedia, Yelp, Adobe, Yahoo etc. So depending on which tier the company is in offer wise will also determine any differences.
Cost of equivalent labour in the specific market is also a factor.
FAANG is LAAME. The real growth industry in tech is PORNHUB.COM
Tech pay can scale very well. Just keep in mind being a good enterprise app dev does not make you a good manager which is why a lot of people cap out.
...and yes a lot of people that used to go IB/finance are going tech because hours and pay are better plus geo distribution is a bit better.
Also you don't really even need to be that good to make good money in tech tbh. Seen some seriously stupid hires because founders raise cash and then hire without real knowledge.
There are many students who do clear 250k+ in tech out of undergrad though those offers are a bit rarer. Most offers from the large tech companies are around 150-200k. The highest offers come from people in quant/quant dev and can clear 400k in the first year (300k/year + 100-150k signing).
The comment above is right in that there aren't too many positions in tech that pay at IBD MD levels. Senior engineers (6-7ish years of experience) at Google/Facebook make 400-500k. That's the terminal level and so many people do in fact top off around there if they stay there forever. However if you climb up the management ladder or go higher up as an individual contributor you can hit 800k-1M after 10-15 years. He's also right that if you look at $/hour tech is significantly better at 40-50 hours/week. Typically though with new grads joining the big tech companies they will stay until senior and then get a high level position at upcoming startups or start their own company.
The highest expected value for people in tech is again to be a quant/quant dev at a top prop shop like Jane Street, Jump Trading, or HRT where top performers hit 1M+ after 5-6 years. Pure quants are a bit more volatile though have the highest payouts.
My friends that have the largest comp out of school simply joined a startup at a lucky time and their stock 5x-10x with a single year and are earning 800k+ now 1-2 years out of school though their comp will drop when their initial stock grant passes after the 4 year mark. This is the most volatile path though with the highest payout. I know two people that exited left spent 4 years after graduating at a lucky startup and exited with 15-20M.
EDIT: Another comment above makes a great point that comparing senior engineering comp vs MD comp isn't a great comparison as the chances of making MD are quite slim to begin with. The top people in tech can also climb the management ladder or join a high growth, but risky, startup both of which come with large payouts.
At this point in time, tech is a better place to be in than finance.
If you want to get those insane compensation package, you generally need to get multiple offers + negotiate. To get those offers, nobody gives a shit about your tech stack. Its all about crushing the coding interview.
Do yourself a favour and replace your 400 QS book with CTCI/Leetcode.
Depends on the industry within tech you go towards to. Friends who worked for years at Apple/Google so far had maxed out at around $200-$250k. Chip companies such as Apple, Intel, Qualcomm - engineers start out at $80-120k + bonuses right out of undergrad. Hours (depending on the group) varies - but the +$120k jobs typically are comparable ranging around 60-80 hours a week (test team - I worked with these folks directly). Comp Eng/Elec Eng. majors are leading the salaries for these companies.
Managers will break the $200k+ salary (after a MS/PhD), but typically will remain a low-level manager until the group restructures and layoffs occur. Rarely will they get above unless they get a MBA from a top school.
This isn't accurate, just by looking at https://www.levels.fyi/ the average pay for senior engineers at Google and Facebook E5/L5 are paid ~350k/year. All engineers are expected to make senior engineer within a certain timeframe or else they are let go. After you become senior, it is possible that you don't get anymore promotions.
Managers are one level higher (L6/M1) and make about 400-500k https://www.levels.fyi/?compare=Google,Facebook&track=Software%20Engine…. You definitely don't need an MS/PhD to become a manager. You can become a manager by simply performing well as an engineer.
There is more to life than starting salary. The 80/20 of your career earnings potential is in your 40's-50's. As such you should pick a career path that you believe you will enjoy most and be successful at a senior level.
Given the time value of money and accessibility of early financial independence with these comp levels, yes, earning big in your 20s does matter.
Insane. That's still a purely money-based argument when you're talking about your entire life. Coding and finance are not real substitutes. Which of those do you actually want to do with your life?
If you're purely talking about the best path to "FIRE" and backpacking for 20 years in your 30's off of passive income, of course the tech -> startup is the easiest path. I think a lot of people will find that's not realistic or even desired in practice.
I have been feeling the same lately. Recent grad, with an offer in Finance that puts me right at 6 figures for the first year. A friend of mine has taken 2 years off of college (one right after high school and one in between sophomore -> Junior year). Even in the midst of this 2nd break he was able to secure an internship as a SDE with a FAANG company where he is on a prorated salary of 144k for the summer...as a sophomore year Intern. I found this ridiculous and did more research. Websites like Blind is the equivalent to WSO for tech ppl...and I was shocked at how high these guys are getting paid. 250k All in as a first year is definitely possible for FAANG companies as well as unicorns. As a good SWE you are looking to make 500k+ within 10 years, if you are at a top company, and that's working your typical 9-5. LOL
The number in the title is a) inaccurate and b) over-sensationalised.
New grad total comp rarely gets to $250k for anyone going into tech hub (SFBA/SEA/NYC etc)-esque tech companies. More typical of top tier offers is about $150-190k all-in + a signing bonus. Something like $105-120 base + 10-15% bonus + $30-60+ vesting stock each year (for public companies this is basically just a bonus but in stock form because of performance based stock refreshers and overlapping tranches of awards).
Signing bonus doesn't count because it's not recurring hence it's not a measure of total comp
For reference, my company pays about ~$130-135 all-in which is closer to tier 2 offers (c.$120-150k) that you'll see thrown around. You'll be hard pressed to find established tech hub style techCos paying $115 all-in.
The only time you see offers like your friend's are when you're talking about niche research roles or someone starting with a PhD (they start one level higher than UG/MSc). That RSU award is waaay out of band for a new UG/MSc grad L3.
Also note these are only for core (Data Science/Analytics, Product Management, Design, Engineering, Research) roles, most other roles get a pretty significant discount on the RSU awards (and thus on the total sum of vesting stock tranches each year) hence lower total comp.
But yes, this is all normal and has been normal for the past 6+ years. For context, see the progression charts on levels: https://www.levels.fyi/charts.html
startups and privates are largely similar but the stock isn't liquid so there's an acute risk of netting only cash comp.
source: interviewed across most of the notable tech cos (inc. GOOG APM), have friends who live this every day and currently interning in product at one.
EDIT: a cool thing to mention are the discretionary RSU awards that high performers get. so on top of the refresher awards, some companies grant additional RSU awards to artificially push up total comp.
EDIT2: these numbers are for tier 1 talent markets as well (the ones listed above). other markets where cost of labour is less have a discount of some sort depending on what competitors (i.e. at X%ile) in that area pay in total comp. e.g. FB L5 might be c.$350k all-in in SFBA but only GBP150k in London (fewer tech companies, less aggressive hiring environment, cost of living etc)
You'll make more in Finance after 5-6 years if you are good. In tech you have added benefit of potentially joining the next unicorn.
If you are not that good you won't get anywhere in either of the fields.
First of all the title is 100% clickbait, highly exaggerated. But yeah, they make more and work less. But if you think that you can get a SWE job at a FAANG company just because you have a good degree, you're wrong. Most SWE hires have been coding since high school, not to mention the months of programming 4/5 hours daily on leetcode to practice for interviews. IB interviews are a piece of cake compared to those.
Plus, due to software engineering requiring more base intelligence, it's much easier to stand out and have an impact in a junior role than as an IB analyst.