[Stasis5001]

Every article on salaries seems to really screw up two things. One is, salary is only a portion of total compensation. Which do they mean here? If you don't look at equity packages, my intuition is you're going to think SF sucks, since I think more companies there use stock incentives. I'm not sure anybody has good data on equity packages/total comp, and at the very least, it's not trivial even if you have that data, since for example you can't just treat an Uber RSU the same as a Google one. So comparing total comp, which is what matters, is a subtle issue with lots of methodological decisions to make that will alter the results, and when articles (including the original source at hired.com) don't even mention any of that, it's hard to take the results seriously.

Second is, you can't just scale up salaries by the COL adjustment when the comp is this high. If you do that, you'll think the following are equally good:

  - monthly income 10k, 3k on rent, 2k other expenses
  - monthly income 5k, 1.5k on rent, 1k on other

Not all expenses scale linearly with COL, and in particular, one of the most important imputed expenses, savings, doesn't scale that way, unless you plan to retire with the exact same lifestyle.

[CydeWeys]

Thank you for mentioning how linearly scaling income with CoL is inaccurate. This comes up a lot in /r/personalfinance and /r/financialindependence and people are always getting it wrong. This particular paragraph really rankled me:

> In Austin, the average salary for a software engineer on Hired is $110K. But this is the equivalent to making $198K in San Francisco when you consider the cost of living difference between the two cities.

Sure, I'm willing to believe that the CoL is 80% higher in San Francisco than Austin, if you take no measures to control expenses. But for the reasons you point out, by no means does that mean that your salary is effectively 80% higher in Austin. The only way this calculation makes sense is if you are spending 100% of your income, and only on goods that are more expensive in the higher CoL area! Rent would count for that, but electronics sure don't. Most of the physical things that you buy, and of course any vacations you take, don't get more expensive at all in a higher CoL city. Hell, the vacations likely are less expensive in a high CoL city, because you're near a big international airport with lots of outbound flights.

[elastic_church]

I actually like private company RSUs and the lack of data around them.

I can get super amazing offers from Microsoft of Google who will throw RSUs at me based on the assumption I actually had such great offers from the last company, even if it is private.

The secret is to tell them that there's a huge secondary market and lots of liquidity. There, the secret's out, they have no way of verifying, and the secondary market for private tech company shares is a huge and growing and fragmented area.

So at first they'll try to low ball you because you weren't with a "unicorn IPO". But then you reveal all the liquidity you have and thats that

[acchow]

You really think Google is this naive?

They are fully aware there's a stupid dance around negotiations and they don't really care which routine you choose to take.

[elastic_church]

Naive? This is exactly what they do. If you come over from Facebook and Google offers you the standard RSU package, but you let them know what kind of vesting RSU packing you already have, they'll up the ante.

Sounds like you are more uncomfortable with the idea that some people don't have to work for the same outcome.

[acchow]

I was disagreeing with your sentiment "I actually like private company RSUs and the lack of data around them." as if the ambiguity of pre-IPO RSU value somehow empowers you in negotiations.

Google is not naive - they won't fall for any neat trick about "a huge secondary market and lots of liquidity". You aren't getting a higher offer after a low-ball because you used your black-box RSUs to negotiate.

You could simply decline their offer and tell them it's not enough. Negotiate hard by declining repeatedly - it will take weeks, but stay strong. Eventually you'll end up at the same much-higher result.

That's what I meant by the "dance". Initial offers will always be a low-ball. They just want the non-negotiators to accept the low-ball. But they'll negotiate with the negotiators and your technique won't get you a different result - whether it's repeatedly declining, or using pre-IPO RSUs, or even lying about your other offers (which they can't verify anyway) - it's just a dance. You'll end up at the same place.

[havetocharge]

These are great points. I've had jobs where salary ranged from 62% to 100% of total comp. It is very difficult for me to figure out whether I am above or below the average.

[asafira]

This right here.

I would love to read an article that addressed these in their analyses as well.

[emodendroket]

I wonder how typical it is for total comp to be so stock-heavy, though, outside of the handful of Googles and Apples of the world.

[dublidu]

This is especially true for new grads who are willing to share an apartment. Student loan also doesn't scale with COL. For frugal engineers without family, SF Bay Area or Seattle can make a lot of sense.

[bluGill]

It is invalid to consider stocks, bonus, and other incentives in your calculations. Companies take them away all the time.

You have salary, and that is it. Fringe benefits (insurance, 401k match...) is a useful thing to get and part of the picture, but the company can change them to your negative when they feel like it.

stocks and bonus are nice, but you dare not count on them until after you get them. People who do otherwise find themselves broke when expected money doesn't come in.

[acchow]

Actually, a company can't take away granted RSU's that are still vesting. That's a signed agreement.

They can, however, reduce your salary at will.

[bluGill]

True, but there is no reason to believe that those stocks will be worth anything when they vest.

[acchow]

Sure, but they can also reduce your salary at any time. So it's a bit unfair to consider salary any "more real" than vesting RSUs.

I just mean your claim "stocks and bonus are nice, but you dare not count on them until after you get them" is false because you can't "count on" salary coming either.

[danielpatrick]

Elaborate?