Do you earn less than a new Silicon Valley employee?
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New York: Competition for engineering talent remains fierce in Silicon Valley. The mega players offer recruits lavish offices and gourmet cafeterias along with all the usual corporate perks, such as gym memberships and expense accounts. But there’s nothing like good, old-fashioned money to entice top talent.
Internship salaries in engineering and product management can exceed $6,000 a month, but full-time salaries are even more impressive. According to data collected by Jesse Collins, a Valley intern-turned-employee, the average annual salary for a first-year Silicon Valley worker is more than $105,000, plus a nearly $13,000 stock bonus and almost $26,000 cash bonus. The national wage index is $48,098.63, according to data last compiled by the Social Security Administration in 2015, or about a third of what an entry-level engineer might earn at Facebook or Amazon.com.
A 26-year-old computer science student at Purdue University, Collins set out to put together a data set of what his fellow engineers are being offered by their first employers. (A friend of his, Rodney Folz, put together a similar set of Valley internship salary data earlier this year.) Using a Google Form, Collins collected 290 purported offers from big-name companies. The data were submitted by a mix of self-identified graduate and undergraduate students, as well as two overachieving high school students. The form was shared in a prominent young engineers group on Facebook, on college web forums, and on Reddit.
Replies were submitted anonymously, and while the vast majority of respondents were offered software engineering jobs, a handful identified themselves as analysts and managers. Most respondents identified as male undergraduate students. As with any online survey—particularly a self-reported, anonymous one—there’s room for bad data. For example, Collins said a single respondent claimed to get five job offers from big-name companies. While not impossible, it’s rare at best and false at worst.
In an effort to corroborate this self-reported data, Bloomberg compared Collins’s data set with average salaries recorded by salary tracker Glassdoor. The site listed Facebook’s typical base salary as $120,345, slightly higher than Collins’s figure, but the stock and cash bonuses were considerably lower on Glassdoor, at $21,450 and $14,333, respectively. A source with knowledge of the matter said Facebook’s salary figures were closer to Glassdoor’s than the data set. (A spokeswoman for Facebook declined to comment, citing a company policy not to discuss employee compensation.) Glassdoor’s number for Snap Inc.’s salary was similar to Collins’s number, as was the salary for Twitter and Uber, though the bonus amounts differed. (Twitter declined to comment and Snap did not return requests for comment. Uber declined to comment, however, a source with knowledge of the matter indicated the numbers in Collins’s data set are accurate.)
“I can obviously understand that in this political climate, it’s probably a little bit intense seeing those sort of numbers,” Collins, who is originally from Australia and started at Purdue’s undergraduate program at 22, said of the salaries and bonuses. “But I think it’s also important to remember the locations of a lot of these [jobs].”
In San Francisco, the median monthly rent on a one-bedroom apartment is more than $3,300. It’s high in San Jose and East Bay, Calif. as well, all places where young Valley residents might consider living. Rent in Manhattan, home to several companies on the list, can be more than $3,000 a month. Abiding by the old rule that rent should be a third of one’s take home pay, employees living in these areas should be earning at least $108,000. Following that formula, the first-year salaries at such places as IBM and Microsoft seem fair, if not a bit low. (IBM did not reply to a request for comment, and Microsoft declined to comment on the data.)
The salaries at mega-unicorns Facebook, Snap, and Uber are not entirely surprising. It is notable, however, that legacy financial institutions Goldman Sachs and Capital One fall at the bottom of the list in total compensation when compared with Valley companies.
The typical Goldman Sachs analyst’s total compensation on Glassdoor is listed at $98,509, just $1,842 more than what Collins found, which could be in part because Glassdoor factors in more highly ranked analysts rather than all first-year employees. Respondents in this data set who were offered jobs by Capital One were primarily engineers rather than bank analysts, and their total first-year compensation was $100,144, which is within $200 of Glassdoor’s finding. (Neither company returned a request for comment.) Recently, there’s been a rush for traditional financial companies to hire engineers. But when given the choice between a Valley salary or a bank salary, the decision is easy for any recent graduate: Go where the money is.
Interestingly, respondents to Collins’s survey overwhelmingly said they did not negotiate their offer. April’s survey of Silicon Valley interns found a similar failure to negotiate. Collins attributes this lack of negotiation to the lengthy and “tedious” interview process and fear that an already lofty offer might be rescinded. “I think that fear is a little bit irrational,” he said. “I think as long as you’re courteous about it, most employers are willing to meet you somewhere.” Bloomberg