[jschoe]

Your take away does not go far enough. It's not executive compensations. It's compensation generally, it's all much much much lower than in the US. Many Germans consider 70-90k as already making bank and a high salary that you can ride out until retirement. And the COL isn't low either and quite similar to the US. Europe is just far behind the US when it comes to salaries. Which shows that there is a lot to lose for US engineers.

[maverwa]

What numbers are you using for your COL comparison? Because each time I tried to compare these - to get a feel of what the same standard of living would cost me in North America - I always came up with about 1.7-2x at least ( ignoring the valley). So if you say it’s similar, we either mean different things, or use different sources. For comparison: 70k€ gross is already 60% more than median (which is 44k in 2024, according to stepstone data). According to census.gov, „Real median household income was $80,610 in 2023“. So while the median income might be an imperfect proxy and comparing stepstone data with census data might be incomplete, I thing a difference of nearly 100% suggests that you cannot directly compare German income with North American.

[com2kid]

The only reason US engineering salaries are high is because of broken housing policies in US coastal cities.

IMHO this will be the downfall of US engineering, the high salaries will make US engineers too uncompetitive.

[hankman86]

No, it is supply and demand. And a good deal of culture sprinkled on top. Americans are much more prepared to accept obscenely high salaries for exceptional talent. In Germany by contrast, even the greatest software engineering genius will not make that much more than some middling developer.

[wbl]

Salaries are not set according to how much you need the money. The reason US salaries are high is that US software companies can make staggering amounts of money.

[com2kid]

> Salaries are not set according to how much you need the money.

This is not true at all.

When I started working at Microsoft in 2007, Microsoft was one of the most profitable tech companies of all time. (They still are!)

Salaries in the Pacific Northwest were around 1/2 to 2/3rds what they were in the bay area, and total comp was a lot less, since MS's stock was flatlined at the time.

But do you know what we all told each other?

"Housing here is cheap, traffic isn't bad, it isn't worth it to move to the Bay Area."

A senior engineer is happy earning 130K a year if they can get a good house for 500 or 600k!

Once housing prices started exploding, salaries had to go up.

(The other counterpoint would be that many companies have location specific CoL adjustment to their salary bands)

> The reason US salaries are high is that US software companies can make staggering amounts of money.

SAP makes staggering amounts of money!

For knowledge workers, salaries are very disconnected from how much value the employee brings to the company.

[apesti]

I don’t think it’s high housing prices cause high engineer salaries. By that logic all jobs in SF/Seattle should be high paying but that isn’t the case.

I see two ways it could be working:

1. High engineering salaries cause high housing prices

2. High engineering employer demand causes high housing prices (more employees in the same area and stagnant housing supply)

For 2, the high housing prices probably do push up salaries to an extent but the real cause is demand for engineers

[com2kid]

Salaries in Seattle are sky high across the board. I've seen house painters getting paid 100/hr, that was obviously on the high end, but 60/he isn't unreasonable around here.

[wbl]

The point is the mediation via your demands+the way Microsoft and you had a geographic constraint.

[jschoe]

SAP also makes a lot of money. It's not purely related to how much a company makes. There are German companies that generate a shit ton of revenue, but they still pay way lower salaries. The mechanism how salaries come about are much more complex than that.

[lotsofpulp]

Prices are set by the highest a seller is able and willing to pay, and the lowest a buyer is willing and able to accept (absent collusion).

It is clear that in certain US metros, sellers are both able and willing to pay a lot, and buyers are not willing to settle for less, because they can find other sellers able and willing to pay more.

Higher land prices come downstream of that. No one is stopping businesses from paying less in areas with lower priced land, but evidently, it is more difficult to make a successful, highly profitable business in lower priced areas.