Software engineering vs finance compensation
Can someone who knows SWE salaries give a realistic breakdown of what one can expect to earn? In finance it’s quite standard:
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IB Analyst (0-2 years exp; 22-24 years old): ~175-225k cash
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PE Assoc (2-4 years exp; 24-26 years old): 250k-400k cash
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PE Senior Assoc / VP (4-8 years exp; 26-31 years old): 400k-700k cash; 2-4m of carried interest
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PE Principal: (8-14 years exp; 31-37 years old): 750k-1.5m cash; 6-15m of carried interest
Do 30 year old software engineers make north of 600-650k plus the equivalent of meaningful carry (can proxy carry for stock options). How about 33 year olds are they making 900k+ cash and enough carry to build generational wealth?
I don't think you can compare the upper end of Finance comp to the average software engineering salary.
Typical finance career probably pays less than typical software engineer, and top end finance probably is comparable to top end software engineering, especially when you include the equity comp a lot of engineers get at startups / FAANG.
Only comparing top end. So 33 year olds at FAANG make 900k+ cash/equity and then options in the high single digit millions which vest over 5 years (so annually 1-2m vesting)?
Nobody has been able to confirm this point for me
As a 32-y/o in PE, I damn sure wish I was making $750K w/ a lil' $6M pool... not quite! All jokes, I may be an old head but I started a lot later, so I'm more than happy with my current comp. Agree w/ the other poster, a tad bit hard to compare the two. Low ends of both finance and SWE may be a lot different than the higher end.
The only SWE salaries I can personally attest to are those of my friends who work in the field - one of my good buddies is out west working w/ a FAANG group as an AVP (he's 35) and making roughly $450K w/o options - I'm sure that number is higher, although I don't know his allocated equity pool & stock split selection. I will say that this man worked his absolute ass off, and had all the bells and whistles. M7 education, behemoth of a GPA, the whole biz. Not sure if that's an accurate number.
Helpful perspective. Small tweak would be that I noted both years of finance experience and age. But agree not everyone enters the path at 22 as implied in my OP
Hmm interesting on the no options. Saw an offer sheet for an AVP role at google that was $450k salary, and an 80% bonus paid out in stock over 3 years. Ok top of that, included $50k sign on.
Saw another offer from Stripe for AVP which was much lower at $250k plus 20% bonus in stock. Forget what sign on bonus was for that one.
The guy at google had a much better resume (one of the best I’ve seen) than the guy at stripe plus a couple extra years of experience which probably led to that amazing offer.
Sorry, that's not what I meant - I can now see that I made that sound really confusing. I meant that he had told me his comp was $450K NOT INCLUDING options, hence my usage of 'without'. My fault, that was really confusing. My buddy does work at Google, so I guarantee you the sheet you saw and his current position are the exact same profile. Good to know though, 3yr-80% stock split is a nice little cherry on top of a $1.3m total comp he'd get in that period.
He's a great guy, so he deserves to get paid! Probably works about half the time I do, hahahah
similarly on a delayed track. did you enter pe associate when you were 30-32? do you feel like you would have been better off climbing the ranks in IB and making steady promotions vs. going to pe which is def a bit tougher to move up due to limited seats and fund economics? curious on your insights!
Depends on what kind of SWE. If you’re enough of a genius to land a quant role, you can potentially net low 7 figures annually by that age, but this is largely performance driven. For solid non-quant software engineers (e.g. the FAANGs, Ivy+ grads), your compensation growth more or less terminates after 5 years at around 450-600k if you’re lucky. After that, you fluctuate around that point +/- 100k for the rest of your life or until you retire. As for everyone else (e.g. Oracle, Walmart, etc.), you’re probably looking at 200-250k by that age.
The one thing I’d note is that you shouldn’t go into this field with the intent of building generational wealth. I see so many people burn out in both quant and normal software engineering roles because they’ve been sold this preposterous idea that they’ll become the next multi-millionaire cruising on their yacht in Santorini from working a 9-5. Do software engineering if building complex systems and solving puzzles genuinely intrigues you. That’s why I got involved and I find that I’m much happier than a lot of my colleagues and former classmates.
This besides the burnout part (wtf, who thinks that?)
Also everyone forgets you can move to management in tech and from there think of your opportunities to be roughly the same as the guy who jumped to FAANG corp strat / dev as a manager with higher pay at each pay band. Odds of making it to SVP / C-suite or their technical ladder equivalents are super low and unpredictable but there isn’t really a hard ceiling.
I work for one of the big names in quant trading (starting at 400k+ out of school for devs and quants) and pay after that level is basically a black box. Rumor mill (TeamBlind) says it’s doable rush to low 7 figures in your 20s and the real top performers can hit much bigger numbers (8-9 figures), but again I have no real idea.
IB/PE makes more sense for the real workaholics / die hard extraverts / people who are not quite mathematically gifted enough to cut in in tech (de emphasize this, it’s not that hard) / your family or friend group is all in trad finance / you want a more straightforward path to mid 7 figures. Tech makes more sense for people who don’t fall into one of those buckets imo
Also for what it’s worth if you don’t have a top tier pedigree I’d say tech is better period, whether that means PM or SDE. On the other hand if you have a lib arts degree from Harvard or Princeton that’s extra points towards IB/MBB/PE
Seen plenty of burnout cases. But I completely agree that tech is the superior field for non-Ivy/non-target grads. Just doesn’t make sense to fight the current and join an industry that salivates over your undergrad prestige unless you can’t live without a 7+ figure salary.
On the management point, everyone likes to say that you can just jump to management, but I’ve never witnessed a single person say they’ll do that and then actually follow through. It’s a lot harder these days now that the industry is starting to get saturated. Plus the good old days of being on something ground-breaking like Google Maps and rising up the ranks that way are long gone.
But yeah, if you’re at a school like Bama or FSU, just do tech and be happy.
You make $23M USD really?
Pretty sure this guy is a BBH alt
No, he makes 158MM RMB. That is very, very different from making $23M USD.
There’s a post somewhere that a commercial loan officer was making millions. Quite interesting enough.
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