I wouldn't count the equity appreciation as compensation. you already own the capital, its your own capital gain, not income from employer at that point.
Yes, but you should value them at 100k, because it is the functional equivalent of getting a 100k cash bonus, that you (instead of diversifying) foolishly spent on buying a single company's stock.
You don't actually need to work at Facebook to sink 100k into buying Facebook stock (That you then forbid yourself from selling for 4 years).
> that you (instead of diversifying) foolishly spent on buying a single company's stock
So, it is actually a bit more complicated, and better than that, and long term stock grants act as a psuedo stock hedge.
This is a simplification, but imagine that there is stock worth X, that hs a 50% chance of the stock doubling in value, and a 50% chance of it crashing to 0$. You might think that this would be equivalent in expected value to X, but that is not true.
It is not true, because if the stock goes way down, you don't have to "accept" those losses. Instead, you can jump to another company, mid way through, and get back your previously high salary.
In that way you can capture the upside potential, while also being protected against the downside losses, in that if the stock goes down, you just jump ship, and get a high salary somewhere else.
It’s basically guaranteed at this point. And you don’t own the capital, you don’t start getting the massively appreciated grants until you are a few years in
I guess that when the market will finally correct because of all the mess that we are having in 2020 their salary may get quite a downturn if they are including the increasing values of the stock market as part of their compensation..
Yes as long as you're talking about total compensation; I've 7 years of experience in software engineering and my offers are in the 500-600k range of total compensation. Note this is equity value at grant; there is no appreciation (or depreciation) yet.
I recently took one of those offers from a FAANG, swapping a bunch of illiquid startup RSUs for liquid equity compensation.
Google is ~$350K, Facebook is ~$375K, Amazon is ~$315K (and not known to pay well outside of equity appreciation), Apple is ~$320K for ICT4 which doesn't map well to Senior at the others, probably a bit low. Netflix is severely north of $300K but hard to say because there's just one title -- average at $450K.
I guess "senior engineers" can be up to interpretation. Colloquially, I take it as someone with mid-career experience. For most of the FAANGs, "senior" can be reached in as little as 3 years out of college, with a median somewhere around 4-5. For a 30+ year career, one can safely assume your compensation will continue going up from your "senior" title 5 years in.
To summarize: yeah, I suppose $500K 4-5 years out of school isn't achievable, but within 10 it is.
Salaries? Not at all. Total compensation? Well, it depends.
Software engineers with < 10yrs of experience routinely make this much at FAANG. The total compensation number usually includes the following:
* Salary
* Bonus (anywhere between 15-25% of salary)
* Initial grant that vests over 3-4yrs
* Stock "refreshers" that you get annually
* General equity appreciation due to a bull market
For senior engineers, the equity portion of their compensation far outweighs their salary.