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Microsoft Freezes Salaries for 2023

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Re: Microsoft Freezes Salaries for 2023

#171

Post by gumballindie »

pydry wrote: post #26
galoisscobi wrote: post #15

Wondering how long it’ll take for other tech companies to copy this move and pretend that they independently arrived at these conclusions after their meticulous macroeconomic analysis.

I wonder how much illegal back channel coordination there is going on between the big tech companies on this.

Just like us engineering workers have groups and forums where we share ideas so do ceo workers. They want to keep their bosses, the shareholders, happy and so they share ideas. Right now layoffs are so hot, and as ceos dont innovate much that’s the trend they follow. No need for illegal backchannels. Just a cool trend. I just hope that those layer off workers that are lucky and smart enough are working on replacements for the googles and microsoft out there because to be fair they are well past their expiry date.

Re: Microsoft Freezes Salaries for 2023

#172

Post by jiveturkey42 »

ClumsyPilot wrote: post #21
dig1 wrote: post #10

Yet CEO's bonus in 2022 was 20x bigger than his salary. I don't think it will be less this year either; with all-time high stock price and these "cost cuts", he will be wholesomely rewarded.

This kind of comment woups not have been here like 3 years ago. It was an amazing journey to watch HN denisens adjust their opinions as they went from creme de la creme and 'anyone can create a unicorn tonorrow' to, you know, being basically like a plumber but for JSON.

Plumber has more job security

Re: Microsoft Freezes Salaries for 2023

#173

Post by moosedev »

tombert wrote: post #146
didip wrote: post #134

Earlier quoted context omitted.

At its height, FAANG companies are dishing out > $500k total compensation to engineers. You would have to be quant analysts themselves to beat that number.

When was its height? Even with stock packages at Apple I was getting closer to $250-$300k/year total comp. This would have been September 2018 until March 2021...

Height was probably something like mid-2021 to early 2022. But note that Apple (broadly, handwaving, obviously subject to stock price fluctuations, offer negotiation, time-in-role, etc.) pays their software engineers less than the other FAANGs. Substantially less than a few of them.

Re: Microsoft Freezes Salaries for 2023

#174

Post by oh_sigh »

sokoloff wrote: post #166
oh_sigh wrote: post #147

Earlier quoted context omitted.

If, say, Sundar was only offered a $100M package instead of a $226M package, where would he go that would pay him more than $100M? There's no other person out there who would do the job for $100M? An issue would be that Sundar is plugged into Google and knows all the ins and outs and has the relationships that an outsider would take some time to learn/form, but on the same hand, Sundar going out into the wide world i…

> There's no other person out there who would do the job for $100M? I'd be willing to do a terrible job at it for only $10M/yr. That's not what the shareholders want; they want Sundar to keep doing what is, from the shareholders' point of view, a quite respectable job, seeing the shares grow from $34 when he become CEO to $112 now for a CAGR of around 17%.

Sure, I don't mean anyone willing to take the job, I mean anyone the board might reasonably select who has a good chance of success. Surely those people are out there.

In that same time frame that Sundar was CEO and GOOG stock is up 240%, META is up 160%, NFLX is up 220%, AMZN is up 325%, AAPL is up 500%, and MSFT is up 600%. Surely these giant tech companies didn't all get lucky and get the only 5 people who could get great growth numbers from the stock market.

Re: Microsoft Freezes Salaries for 2023

#175

Post by sidfthec »

mason55 wrote: post #91
sidfthec wrote: post #79

Earlier quoted context omitted.

> Is it not better/preferable to freeze salaries than to cut more staff? Hint: Neither is needed for most of these big tech companies.

Large tech companies don't exist to serve as employment programs for software engineers. If they believe it will increase profits without longterm harm then layoffs/salary freezes are the right thing for them to do as a company even if they are wildly successful . Layoffs are frequently done when a company is struggling, so people seem to think it's incongruous for a company to do layoffs if they are doing well.

> If they believe it will increase profits without longterm harm then layoffs/salary freezes are the right thing for them to do as a company even if they are wildly successful.

And that doesn't need to be the case. Many of these multi-national big tech companies have failed to move forward with layoffs in some countries because of laws that protect workers.

For example, in some countries, companies need to prove that they're struggling in order to lay people off.

Re: Microsoft Freezes Salaries for 2023

#176

Post by WalterBright »

bagacrap wrote: post #101
WalterBright wrote: post #55

Earlier quoted context omitted.

It's still 10% below its all time high. 20% if you factor in inflation.

As a percentage of the SP500, it's never been higher. This is important because (a) economic performance is relative (b) the most likely thing (or at least the most advisable thing) for anyone who receives MSFT RSUs is to immediately sell them and use the proceeds to buy more diversified investments.

The reason people became rich off of MSFT is because they didn't diversify by selling their winner.

Re: Microsoft Freezes Salaries for 2023

#177

Post by rtkwe »

bagels wrote: post #157
diversionfactor wrote: post #106

And yet, at exactly this time last year: "Microsoft to Nearly Double Salary Budgets, Expand Stock Compensation" https://www.shrm.org/resourcesandtools/hr-topics/compensatio... So they are freezing after the doubling? This behavior seems skittish and an overreaction, especially given their continued profitability and high margins. Corporate executive behavior reminds me of interacting with ChatGPT: Exec: "What should…

It's about leverage, with all the faang layoffs, they now don't have to pay as much for employees.

More than that there's a whole strain of performative cost cutting due to the recession that's always seemed just over the horizon for the last year. Part of the goal is just to signal to investors you're ready for this continuously hypothetical event by pre tightening your belt as a company so they don't "price in" the recession into your stock. It's another negative outcome of basing so much of our evaluation of companies off of stock price which is partially to completely decoupled from the actual performance of companies.

Re: Microsoft Freezes Salaries for 2023

#178

Post by olliej »

jollyllama wrote: post #23
olliej wrote: post #3

So, that means pay reduction for all employees this year right? unless there's suddenly a inflation->deflation transition?

The deflation has begun, if you look at M2 money supply. But food is not going to decrease in price, and housing will lag. So it'll still feel like inflation, but consumer goods are already going down.

(1) It doesn't matter if the economy will be subject to deflation in future, right now it is not, and while later in this thread you talk about 2nd derivatives being negative that just means the rate growth of inflation is dropping, not inflation itself, so excusing below inflation compensation changes is BS.

(2) If/when deflation does occur, we know from prior instances the reduction in worker compensation is much higher than the rate of deflation.

I don't get this attempt to represent below inflation compensation changes as ok because one day in future some economic change will make this years actions "reasonable", because that is assuming that this year is a one off, rather than recurring. It also presumes that wages won't be cut even more when deflation occurs (generally by mass layoffs and then rehiring the now unemployed when their choices have been reduced to "homeless vs lowered pay").

We also know that businesses don't actually foresee a problem with deflation as they're still happily giving mass payouts and wage increases to their executive management, performing stock buy backs, and issuing large dividends. If companies were actually legitimately concerned about the potential for a deflationary event they would be hoarding cash.

Re: Microsoft Freezes Salaries for 2023

#179

Post by WalterBright »

mupuff1234 wrote: post #70
WalterBright wrote: post #47

Earlier quoted context omitted.

Anyone can buy MSFT and get their share. As for the employees, they have stock options and are getting a piece of the all-time high stock price. Although MSFT's all time high stock price was in 2021. This goes for all public corporations. Anyone can get a piece of the action by buying some stock in them. As for the size of Nadella's compensation package, speaking as a long term MSFT shareholder Nadella has earned it.…

Wait, so why don't current employees of MSFT also deserve a raise? You know, the people who actually built and sold the products?

They get the rise in the value of their MSFT stock options.

Microsoft has historically had low salaries - because the money was made from the stock options.

Re: Microsoft Freezes Salaries for 2023

#180

Post by csa »

fzeroracer wrote: post #167
csa wrote: post #163

Earlier quoted context omitted.

> high performing employees are now effectively taking a massive pay cut due to the salary freeze and inflation? If any “high-performing employee” feels like they are taking a “massive pay cut” merely due to inflation, then something is wrong. Either they were grossly underpaid to begin with (change jobs, it can be done if you’re that good and that low paid), they aren’t actually that good (so total comp package, inc…

A paycut is a paycut no matter how you try to spin it. If someone's earning 150k a year with 5% inflation and doesn't get a raise the next year matching inflation, they are quite literally taking a 5% pay cut in comparison to changing jobs which likely offers salaries starting at the post-inflation level. In this case it's worse because not only are their salaries not going up, but the things nominally used to get ar…

My thesis is that many of them, especially at places that grew a lot during covid like MS, were/are overpaid relative to their skill set / ability to add value.

Cutting positions was one way to correct this.

Freezing salaries is another.

If any devs hired during covid think that their salary was totally justified and shouldn’t be cut directly or indirectly, then they are more likely than not delusional. It was a frothy hiring market, and the upward pressure on salaries across the board was not healthy for the overall tech ecology, imho (the smaller companies couldn’t afford competent devs).

Note that I am actually an advocate of tech corps sharing more of the spoils with their employees, but not in the way that it happened during the pandemic. Reward competence selectively rather than randomly rewarding just being a warm butt in a seat during a hiring boom.

I have no doubt that during this “pay freeze” at MS, the star performers will still be rewarded somehow.

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