[tptacek]

Technically, after your first priced round, you'll have a board; you probably control it, but perhaps not after your second round. The board will approve a headcount plan, with implied costs.

Realistically the management team (the operators, not the investors) do control most of this.

The subtext of the question though isn't why operators don't increase comp; it's why investors don't kick in enough to let startups compete with comp packages from FAANGs.

(I think the answer is: it's because most startups fail.)

[nemothekid]

I think the comparison to FAANG is unfair. Most operators, after a priced round, AFAIK, are paid fairly, sans FAANG. The idea that any startup should have similar comps to companies that have been growing 50%+ year/year for decades with money shooting out of every orifice isn't realistic. Most startups don't compete with comp packages from FAANG for the same reason that Target doesn't offer competing packages - they aren't making that much money. An exception, OpenAI, which is completely flush with money.

More succinctly, FAANG salaries aren't market rate salaries - they are above market. I find operators are paid in comparison to similar sized companies, especially companies that appear "mature" after their 2nd or 3rd priced round. It's the same reason the quants at Chase don't make as much as the quants at RenTech, doesn't mean the Chase quants are being paid under market.

[alephnerd]

FAANG base salaries and bonuses for most roles aren't all that different from similar roles at other companies in the Bay Area - it's just the stock comp that makes the difference.

A PM II at Google Cloud is earning the same base+bonus as a PM II at Cisco Meraki or Databricks.

[leetcrew]

that seems about right, but I don't understand your point. it doesn't really "cost" a publicly traded company less to pay employees in stock vs cash. instead of paying $x + y shares, they could just sell their own shares periodically and pay all cash. they might lower TCs a little to offset the risk of additional dollar-denominated expenses in down years, but they would still be paying way above market.

[alephnerd]

FAANGs are outlier stocks, hence why the acronym was made. Plus it's an ancient acronym that ignores plenty of well paying employers in the area (Crowdstrike, Zscaler, PANW, Broadcom, etc).

And FAANGs did well depending on when you joined. In most cases in the past several years it's kind of did the same as peers depending on how long your stint was.

There are a lot of publicly listed employers in the Bay Area who's stock is doing very well, but limiting prestige to FAANG is career limiting and clearly stems from hubris.

[leetcrew]

right, I didn't really mean to debate what companies are inside/outside the Big N club (or whatever you want to call them). I agree with your overall point that Big N salaries are not representative of what a typical tech worker can expect to make.

the part I don't get is why you chose to emphasize that google base+bonus is about the same as those other companies. I don't know the google particulars, but I'd guess stock makes up almost half the target comp of someone at that level. that's a big difference even if the stock stays totally flat.

I'm not familiar with the google particulars, but I don't find stock comp to be much different than a quarterly bonus. there are some good and bad years, but the way refreshers and promos are handled cause actual comp to converge to 10-20% above target in the long run, even if the stock grows spectacularly during your tenure.

[tptacek]

I mean, I am one of those, and I agree I am paid fairly, and significantly less than I would likely be at a FAANG.