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How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

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Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#21

Post by potatolicious »

lifeisstillgood wrote: post #2

Am I reading this wrong - out of 8,000 employees surveyed, no-one had more than 1/10th of 1% of equity. That's a nice pension contribution not an equity share. If you were in facebook at that level, you might get a house. But really why is that level of equity share of any influence in anyone's hiring equation? Or am I missing something?

Welcome to the ugly, ugly truth about startups. Employees have so little equity compensation it's almost hilarious - and yet founders will hand out 0.1% offers and expect you to take huge haircuts for the privilege of owning a tiny sliver of a 7-8 figure exit (potential exit, actually).

Having seen the stock and bonus structure at Amazon and Google, I can confidently say that your expected outcomes are considerably higher at a top-tier tech company than at your average startup.

Sometimes I wonder where all of this "take a haircut for equity" advice is coming from for employees. It's patently terrible given the amount of equity that most deals involve.

Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#22

Post by qq66 »

lifeisstillgood wrote: post #2

Am I reading this wrong - out of 8,000 employees surveyed, no-one had more than 1/10th of 1% of equity. That's a nice pension contribution not an equity share. If you were in facebook at that level, you might get a house. But really why is that level of equity share of any influence in anyone's hiring equation? Or am I missing something?

It's probably an artifact of the data that Wealthfront is collecting. They're catering to people with wealth to manage, and critically, they omit founder-level employees in this chart. If you look at the people who've made over, say, $5 million from equity in Silicon Valley in the last couple of years, there are probably many more Facebook employees with 0.01% stakes than there are 1% employees at companies acquired for $500 million, or 2% employees at companies acquired for $250 million (above that and you're probably a founder).

Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#23

Post by columbo »

lifeisstillgood wrote: post #2

Am I reading this wrong - out of 8,000 employees surveyed, no-one had more than 1/10th of 1% of equity. That's a nice pension contribution not an equity share. If you were in facebook at that level, you might get a house. But really why is that level of equity share of any influence in anyone's hiring equation? Or am I missing something?

> But really why is that level of equity share of any influence in anyone's hiring equation?

To be fair the article doesn't say if it influences many people or not. I do think it is putting emphasis on something that is simply of no real importance to most people in the job market.

For example, it isn't clear to me if those jobs are paying market rate salaries or not. If that is the case then "equity" may as well be lumped into the 'free E-ZPass', 'paid gym memberships' category (not something to write home about, but nice all the same).

With that said, I'd cut any interview short that was expecting me to take a serious pay-cut for a fractional equity share.

Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#24

Post by mcherm »

chrisa wrote: post #12
urish wrote: post #11

Could someone help me understand what is meant by job levels 1 - 5 ?

It's a fairly common way to do advancement in large companies, and is usually based on experience. "Software Engineer I" is entry level, "Software Engineer II" has 3 – 5 years of experience, etc.

Can you fill in "etc."? I'd be interested to know what definitions they used for the levels (and whether it was consistent across different sources of data).

Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#25

Post by SG- »

I was hoping to read some real details instead of a simple paragraph and this tool. My opinion is that if you're a startup and you hire some people that don't get a share in the company, you're going to have to likely pay them a decent salary and not make promises of wealth one day. You'll also have to pay them more than you plan on paying yourself even if you're more qualified since you are getting more out of it if it succeeds.

I worked for someone that started a small company (we were 2), I was simply a contractor/employee. The problem was and why I left was that he treated me as an equal in terms of responsibility even tho I had no stake in the company.

Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#26

Post by peacemaker »

I guess I'm doing something wrong according to this tool! I recently moved to the bay area and as a software engineer (I'd say level 4-5 on this tool) I'm earning nowhere near the numbers this tool is showing. No equity either...

Are these numbers a true reflection of the compensation levels?

Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#27

Post by protomyth »

BrandonM wrote: post #6

The submission is mostly-useless blog spam around a cool tool: https://blog.wealthfront.com/startup-employee-equity-compens...

Normally, I like to dig down to the first source, but I've noticed those articles don't get the same attention as submitting from "the big sites". I submitted the original source for a lot of today's A6 articles, but it got no upvotes and only one comment.

Looking over my submission history, the original source rarely gets the attention, and the rewrites articles get a lot of upvotes and comments. I'll keep alternating to see if there is some secondary pattern.

Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#28

Post by moocow01 »

peacemaker wrote: post #26

I guess I'm doing something wrong according to this tool! I recently moved to the bay area and as a software engineer (I'd say level 4-5 on this tool) I'm earning nowhere near the numbers this tool is showing. No equity either... Are these numbers a true reflection of the compensation levels?

Id say from being involved with hiring in a few different spots that they are definitely on the higher side but not insanely so. There are a lot of jobs in startups that are quite low on salary but higher on the equity side (or atleast thats what the pitch is) and those may not be as represented here. The shock to me was how little of difference there seems to be in salary based upon location - with cost of living put into the mix it makes me question being in California

Re: How Much Should Startup Employees Earn? Wealthfront Tells Us With A Clever Tool

#30

Post by pork »

potatolicious wrote: post #21
lifeisstillgood wrote: post #2

Am I reading this wrong - out of 8,000 employees surveyed, no-one had more than 1/10th of 1% of equity. That's a nice pension contribution not an equity share. If you were in facebook at that level, you might get a house. But really why is that level of equity share of any influence in anyone's hiring equation? Or am I missing something?

Welcome to the ugly, ugly truth about startups. Employees have so little equity compensation it's almost hilarious - and yet founders will hand out 0.1% offers and expect you to take huge haircuts for the privilege of owning a tiny sliver of a 7-8 figure exit ( potential exit, actually). Having seen the stock and bonus structure at Amazon and Google, I can confidently say that your expected outcomes are considerably…

I'm sorry, do you mean "paycut" or is this some sort of idiom I'm not familiar with? What does hair have to do with it?
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