[JamesSwift]

Sure it is.

If more start to do it, it becomes an arms race. If a company is loading the compensation in other ways and coming in light on salary then their job posting becomes much less compelling for job seekers. So they have a choice: disclose the other compensation (in order to compete with the salary numbers of the other companies) or adjust their compensation to be heavier on salary so their numbers are in line with others.

[com2kid]

I'm sad more companies don't up their 401k contributions, most people don't realize their employer can put in 40k a year (!!!) into an employee's 401k. Due to the wonders of tax law, that is equiv to 60k cash, and that isn't counting the earnings or the flexibility to reallocate 401k investments w/o having to pay taxes on earnings when changing where the money is invested.

[snuxoll]

One benefit of not working for Big Tech and instead for a privately held company, instead of stock grants I get 120% match up to 6% of my salary and an annual 4% profit sharing bonus into my 401(k). Sure, my actual salary could be higher working for a "proper" tech company, but I get more employer contributions into my retirement savings than the Google's, Microsoft's, and Amazon's of the world will give to an employee capping their contributions.

[nostrademons]

It's hard to see how this would beat Big Tech, where the standard match is 100% up to the 401k limit ($20,500) irrespective of income. Say your salary is $200K at private company, would be $240K at Big Tech. You'll be getting 1.2 * 0.06 * 200 = $14.4K in matching funds. The Big Tech employee would stash the full $20.5K into their 401K, get $20.5K match, and then end up about $35K ahead on post-retirement income.

[snuxoll]

You might want to go check the match of the big tech companies again.

Google: Greater of 100% up to $3000, or 50% up to contribution limit (whichever is greater)

Amazon: 50% up to 4%, vests after 3 years

Microsoft: 50% up to contribution limit

Facebook: 100% up to half of limit, 50% for the rest

Netflix: 100% up to 4%

I also don't just get the 120% up to 6%, I also get a fixed 4% of my salary contributed every year. So it's a hyothetical

    200 * .06 * 1.2 = 14.4
    200 * .04 = 8
    14.4 + 8 = 22.8

[nostrademons]

Still have trouble seeing how this comes out ahead. Say you're at Google or Microsoft where it's 50% up to contribution limit, and you get $10K in match. That puts you down $12.8K vs. your hypothetical. If you're getting paid $45K more at the FANG, you pay 35% taxes on it, which puts you $30K ahead after-tax, and then you invest that in an after-tax 401k (or even just a normal investment account), after which you're in exactly the same situation but about $17K ahead each year.

[InefficientRed]

Also, FAANG will negotiate offers against fringe benefits. They won't cut you a custom 401K deal, but they will beat any offer by 20%+ and include the post-tax cash equivalent of better retirement packages in that beat. If you ask for it and if they want you badly enough.

Assuming you can get a gross offer that matches net, having the money in post-tax accounts is better because the tax rate on the 401K at withdrawal will likely be higher than the 15% capital gains rate.

[pnw]

If Microsoft put 40k a year into everyone’s 401k they would immediately trip the Highly Compensated Employee test and have the IRS breathing down their necks.

[joshuamorton]

If microsoft put 40K a year into everyone's 401k it would be impossible for them to violate the HCE test, as every you'd have non-HCEs with a 401k contribution of 30% or higher, something which HCEs are literally unable to match.

[tshaddox]

> Due to the wonders of tax law, that is equiv to 60k cash

And equivalent to 0 cash for paying the rent. I suspect that’s why it doesn’t seem to be a prominent concern in discussions about tech compensation.

[afrodc_]

I don't know about you, but with tech salaries, rent is the least for my concern. I think that's true for most people that don't live in ridiculously high cost of living areas.

[tshaddox]

Perhaps, although until COVID (and we'll see what happens with remote work compensation in the long term) nearly all people with huge big tech compensation packages lived in ridiculously high cost of living areas. I suspect a very large portion still do. In the Bay Area I've heard no shortage of stories of couples/families with two big tech salaries still spending very large portions of their paychecks on rent/mortgage.

[deelowe]

BS. There's nothing stopping you from maxing your 401k and then pulling it back out taking the penalty. This applies to a ton of benefits people naively don't take advantage of from HSAs to employee stock purchase plans to 401k. It's almost always beneficial to maximize your tax advantaged accounts even if you're paying penalties on the back end.

[nfriedly]

Seriously! I've considered going back to contracting just so that I could fully fund a 401k account.

[granshaw]

Solo 401ks are a thing of beauty

[bluGill]

That depends on what the other things are. Most years I get half of my take home pay in December because of my bonus (some of that is my 401k maxing out in November), there have been a couple bad years where the bonus was less, but at least I was able to keep my job. Keeping my job is a factor as well, since I have a family to support, if I'm laid off (like most companies do all the time) that means I'm scrambling to figure out how to get cash, while I can live off of the smaller paychecks I get.

That is me - what is the above worth to you? If you are risk adverse like me, then you like that plan. Others want the cash now but can accept the risk of losing their jobs. Some have a high risk tolerance and like getting their money in stocks - in the best case this is the most money, but in the worst case it is the least. There is no right answer.

In the end you need a certain amount of money to live. That is different from your actual value.

[r00fus]

This would be included in total compensation (which should include non-renumerative benefits as well). In sales, where total comp could be mostly commission (I've seen a 25/75% split in some cases) the company should have some idea of what the bonus/commission range is.

[tshaddox]

Out of curiosity, why does your 401k max out in November? If your employee does matching then wouldn’t you want to spread it as evenly as possible throughout the entire year?

[InefficientRed]

November is pretty close to the whole year. If you choose a fixed % per paycheck and have a bonus that's not perfectly amortized then being off by a month is actually pretty good.

[tshaddox]

I assumed that employer contribution matching is generally a fixed percentage of the employee’s salary each pay period, which means that if you don’t contribute in one month you forfeit that percentage of your salary and thus about 8% of your total possible employer matching.

[endianswap]

At least in my case as an engineer at a smaller tech company my 401k (and corresponding match) maxes out each January because that's when bonuses are granted.

[InefficientRed]

Note: you can set your contribution % to 0 in January and then change it in February. This can be worthwhile because you then DCA throughout the rest of the year. On the other hand, by contributing everything in January, you get the employer match earlier. And over a 30 year career it's likely a rounding error.

[InefficientRed]

I've seen it work different ways and different companies. It's either a % of salary or a % of your gross paycheck. In the latter case, bonuses can mess things up.

[nostrademons]

If you assume a bull market it's best to max out the 401K ASAP, because if stock prices rise throughout the year you want to buy stock early before it gets expensive. A lot of FANG employees max out their 401K in January because they set their bonus 401K percentage to 100% and just fully fund their 401K from the bonus.

This strategy is getting reamed this year, but it's historically been a good bet about 85% of the time.

[bluGill]

Every company I've worked for accounts for that. I get my full match no matter when I max my 401k out. Of course different companies work differently.

[sokoloff]

For the longest time, Amazon's cash salary cap was well-known to be in the middle $150K range. I don't see any evidence that hampered their ability to attract job seekers.

[Solstinox]

Arms race (which will lead to bigger salaries) or price collusion (salaries stay the same)?

[rsanek]

Wouldn't be the first time https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

[JamesSwift]

I think its more likely to be an arms race now that the "remote work" dam has broken and work location is not as important as during the time of the previous well-known collusions.