Big Company vs. Startup Work and Compensation • Hacker News Board

Re: Big Company vs. Startup Work and Compensation

#291

Post by fredkbloggs » Sat, Dec 19, 2015, 12:18 AM UTC

dsacco wrote: post #124

jarjoura wrote: post #96

250k a year in 5 years at a big corporation, really? Yea if you're lucky to work on a project/team higher-ups care about and are also willing to bust your ass working long hours to meet insane deadlines. Also, you better be someone who is excellent at communication and charismatic if you want to get invited to the table of interesting work. There are a lot of brilliant hyper-competitive people who work at these big c…

This doesn't undermine the author's point. As another commenter said, people are really underestimating the likelihood of earning a $250k salary at a large company. It's really, really doable at a large company within 5 years if you hit senior level and live in a metropolitan area. The author's core point is that you are much more likely to become a senior engineer at a large company (and thus earn ~$250k in salary)…

They are also overestimating the likelihood of hitting the jackpot at a startup. The d100 rule of thumb guidance is insanely optimistic; there is not anywhere close to a 5% chance that your lottery ticket will be worth life-changing money; it's probably 1% at best (and later discussion suggests that 0.5% might be about right). Nor is there a 30% chance your ticket will be worth anything; 10% is more realistic (ignoring all the ways that your ticket in particular may end up being worthless), and the "anything" is likely to be so small as to be noise relative to a BigCo base salary. Remember, a general rule of thumb across all industries is that 90% of new ventures fail within 5 years.

Of course, given today's stock market prices, it's likely that any options you get at BigCo will be out of the money when they finally vest, and there's a good chance your RSUs will be worth less than you're valuing them today. But the effects of these things are still much smaller than the vastly overstated likelihood of ending up with a winning lottery ticket.

Re: Big Company vs. Startup Work and Compensation

#292

Post by TheOtherHobbes » Sat, Dec 19, 2015, 12:18 AM UTC

onesixtythree wrote: post #43

This is a really poor analysis. Making $250k after five years at a large company is not the norm, except possibly in finance. The Googles of the world are littered with people who didn't make Senior after 5 years or who got taken into "The Perf Room" and made quiet, shameful exits. Startup jobs are massively overrated right now, and most startup offers are terrible because there are so many unqualified people willing…

Agreed. The article cleverly conflates "not impossible" with "possible" with "probable" with "likely."

And the comments about "I make >$250k at GooAppBook" are self-selecting, from those who didn't get shown the door. They may not be typical for many reasons.

Re: Big Company vs. Startup Work and Compensation

#293

Post by School-Cotton » Sat, Dec 19, 2015, 12:23 AM UTC

phamilton wrote: post #282

School-Cotton wrote: post #272

Earlier quoted context omitted.

People get $100k of stocks a year? As in, not RSUs - vested stocks? I suspect you're confusing the two, though I admit I'm not certain

RSUs are stocks. A grant of 1 RSU means that on the date it vests, the company will buy 1 share of its stock and drop it into your account at a major brokerage. It's considered compensation and taxed as income, though it's often withheld as bonus income.

My point was that inasmuch as they don't vest the same year they're granted, RSUs are nothing but a commitment that part of your compensation in the future will be in the form of stock.

If I grant you $1,000,000 in RSUs, vesting over 1000 years, is your annual income $1,000,000 ? No, it's $1,000.

Re: Big Company vs. Startup Work and Compensation

#294

Post by spydum » Sat, Dec 19, 2015, 12:23 AM UTC

r0m4n0 wrote: post #241

dsacco wrote: post #118

Earlier quoted context omitted.

Are you a senior engineer? Are you at a large company in a metropolitan area? Is your salary less than $250k? If you answered yes to all three, yes, you are probably underpaid. That doesn't mean you're doing something wrong if you love your job, but know that you could earn more.

I'm sorry but... if you were a senior software engineer in Sacramento (a metropolitan city) and asked for 200k at intel, hp, oracle, apple, etc., someone would quietly hang up the phone hahaha. A laughable amount is even closer to 150k if it wasn't a tech giant ie. Sutter, Blue Shield, Proctor & Gamble, PG&E, Franklin Templeton, etc. Lead, architect, principal... they may not hang up but I would expect a double take…

Agreed, doesn't take much looking on sites like glassdoor to confirm.. Most salary bands for principal roles are 120-150k w/ 15-20k bonus and occasionally same in stock.

Re: Big Company vs. Startup Work and Compensation

#295

Post by jasonlotito » Sat, Dec 19, 2015, 12:24 AM UTC

miles_matthias wrote: post #288

I don't see why this is getting much attention. You can look at the financials all day long, but what really matters is your happiness. Are you going to be happy at a big company doing the same job day in and day out? If so, great! If you're the type of person that can't stand repetition and predictability and want the emotional roller coaster of creating something new, then join a startup! We don't have blog posts t…

This makes the wrong assumption that the only two options are "big company" and "startup." More importantly neither of the two qualities you assign to big company and startup are unique.

Re: Big Company vs. Startup Work and Compensation

#296

Post by fredkbloggs » Sat, Dec 19, 2015, 12:27 AM UTC

logical42 wrote: post #155

ryanSrich wrote: post #136

Earlier quoted context omitted.

Is this only in Silicon Valley? Or are these pay scales appropriate for satellite offices as well? For example: could you hit $250k working for Google in Pittsburgh?

From my understanding, they don't really recalibrate pay scales at the bigcos based on location.. but this is purely anecdotal evidence.

In my BigCo experience, they do recalibrate pay scales at different locations, but not nearly to the extent that they should. For example, one of them had three US geo "zones" that were supposed to reflect the cost of living there. The bay area and perhaps Manhattan were the highest, I forget what was in the second, and the third was basically "everywhere else". The difference between the top and bottom was maybe 10-15%, considerably less than the width of the salary band for each grade.

So to make it concrete, a new hire at a particular grade might have gotten $120k in SF or $105k in Little Rock (base). Considering the high taxes and housing costs in SF, the new hire in Little Rock would have had a much higher standard of living.

Of course, working at a non-HQ site is a major career-limiter, so 10 years down the road you might have been better off relocating anyway. Depends on where you are in life and what you want to achieve.

By contrast, non-US salaries are dramatically lower independent of the cost of living at a particular location. So if you're working for a US BigCo outside the US, you had better be in Chiang Mai or Belize, not Berlin or Hong Kong. As the author of this post notes, no one seems to know why this is so, only that it is.

Re: Big Company vs. Startup Work and Compensation

#297

Post by phamilton » Sat, Dec 19, 2015, 12:31 AM UTC

School-Cotton wrote: post #293

phamilton wrote: post #282

Earlier quoted context omitted.

RSUs are stocks. A grant of 1 RSU means that on the date it vests, the company will buy 1 share of its stock and drop it into your account at a major brokerage. It's considered compensation and taxed as income, though it's often withheld as bonus income.

My point was that inasmuch as they don't vest the same year they're granted, RSUs are nothing but a commitment that part of your compensation in the future will be in the form of stock. If I grant you $1,000,000 in RSUs, vesting over 1000 years, is your annual income $1,000,000 ? No, it's $1,000.

Agreed, but I don't see that mistake being made often.

Generally what happens is a laddering of grants. 100k over 4 years. Then a year later, another 100k grant. Then again the 3rd year. And again the 4 year. Once you hit that 5th year, you are indeed seeing 100k in stock each year.

Re: Big Company vs. Startup Work and Compensation

#298

Post by fredkbloggs » Sat, Dec 19, 2015, 12:43 AM UTC

to3m wrote: post #163

googthrowaway8 wrote: post #126

Earlier quoted context omitted.

This is not true, although I thought it was before joining Google from a startup. I'm now two years in (after joining at entry level) and my compensation is ~220k. 250k for senior is pretty conservative, if the Googlers I've talked to at that level are representative (and we don't work in the Bay Area).

This is your take home pay? So after taxes?

The rule of thumb if you work in California is that you'll take home half, assuming all your income is base + bonus + RSUs and not exotics like ISOs or deferred comp plans. The rest goes to the cost of non-cash compensation, various governments, and your tax-deferred retirement savings. It's usually slightly more than half, depending on the exact numbers, whether you're buying medical plans for a family, how much you save in a retirement plan, etc., but that's the safe first-order approximation if you're budgeting.

So someone starting at BigCo in California should expect to take home 100-125k a year for the first few years. That said, I would caution new entrants to the workforce about three things:

- Tax rates are likely to go up, and certainly will not be going down. It would not be shocking if you were taking home 10% less in a few years solely because of higher taxes. You can also expect your cost of living to grow much more quickly than the tax bracket boundaries will rise.

- Your RSUs are likely to be worth less than you're expecting, because market prices will decline in a bust (a major bust is all but certain at some point in your upcoming 4-year vesting period).

- In a bust, you will likely get a smaller bonus or none at all (even if the company is still making money), and are unlikely to get a raise, even a nominal cost of living adjustment. These conditions can last for several years, so even if you keep your job (hardly a given), your total compensation will likely be much less than you expected when you were hired. A few companies may be doing well enough that you will be exempt, but don't count on it.

All of these things need to be factored in when evaluating compensation. It's not as simple as adding X + Y + Z and assuming that all changes over the next 5 years will be either neutral or positive. That's not how life is.

Re: Big Company vs. Startup Work and Compensation

#299

Post by pluma » Sat, Dec 19, 2015, 12:45 AM UTC

lilcarlyung wrote: post #232

Working in Europe I can never believe these fantasy numbers from the U.S. 250k USD after 5 years, seriously? A good Senior Developer here, with 5-10 years of relevant experience, might have a base salary of around 50-60K EUR, and perhaps another 0-2K EUR in bonuses. Then you have to pay around 30% income tax and another 20% if you hit a certain income bracket (which you do with 50K) in many Western European countries…

Thank you for speaking some sense. Sometimes HN tends to make people believe it is representative of all people everywhere in the world.

It's not even about skill. It's just the effect of living in the SV echo chamber of billion-dollar start ups and multi-billion-dollar BigCos.

Re: Big Company vs. Startup Work and Compensation

#300

Post by pluma » Sat, Dec 19, 2015, 12:47 AM UTC

6chars wrote: post #223

nostrademons wrote: post #75

I've done both - 3 years as an employee across two different startups, 18 months as a founder, 5.5 years at Google, and now 18 months as a founder. I guess I'm quoted in the article too. :-) All I can say is that the market is actually a lot more efficient than most people give it credit for. I remember coming out of school and thinking "Why would anyone work for a big company when the payouts for startups are so muc…

"oftentimes they're contractually forbidden from disclosing it" Is that true? That sounds illegal.

You'd be surprised how unwilling people are to risk breaking contracts even when the actual terms are not valid or enforceable. Not to mention that there are plenty of ways to get fired over something you can't legally be fired for.