This Is Why FAANG Engineers Make So Much Money - Tech Compensation / Salary Breakdown

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Timestamps:
0:00 - Intro
0:36 - Components of compensation
0:45 - Base salary
1:12 - Sign-on bonus
1:54 - Performance bonus
3:15 - Bonus multipliers
4:08 - Equity compensation
5:34 - Types of equity (options vs RSUs vs ESPP)
7:51 - The reason for recent software engineer comp inflation
#TechCareerGrowth

[@RahulPandeyrkp]

Learn more about compensation (and other essential info) in Taro: link.jointaro.com/323phgZnAuFDtrQy5

[@gvue4396]

I work in HR and everything he said here is pretty accurate, the only to point out is that sign-on bonus and incentive plans are heavily taxed (40%) alot of candidates going into a job dont always know that and expect the full bonus or incentive plan. Some companies allow the full amount if you assign it to go into your 401k, this way none of it is taxed. Little info for you guys from HR :).

[@mesh475]

Very helpful to know! Thanks

[@whoami6821]

But isn’t we can only 401k anyway? So if we put sign on bonus into 401k, that’s means we can put less from our salary into 401k. So what’s the advantage?

[@gvue4396]

@@whoami6821 sign on bonus and 401k is separate, what you contribute won't effect the bonuses you assign to your 401k. Every company is different so I would connect with you HR to see what options they have.

[@rdean150]

But 401k has a legal maximum contribution every year. Only around 20,000 ($22,500 in 2022 iirc). And most companies do 401k contribution matching, either dollar-for-dollar or 50% matching. If your sign on bonus is 25K or more, you legally cannot put it all into your 401k. And if you immediately max out your annual 401k contribution with your sign on bonus, be sure that the company gives you the full match amount on that as well.

[@andreantoine8005]

what if you expected to use that entire bonus to do something like pay student loans

[@kingofcampbell6413]

Even in tech for 4+ yrs, this is still the first time I found some youtube finally did this analysis. Most of other videos just talk about money but not about the trend. U did a nice job.

[@harshanhothi455]

What are the chances though of getting into those type of companies in someone’s lifetime?

[@juandager5220]

Human conduct is shaped by incentives: When you own part of a company's success, it becomes "our business." And there's a bigger effort to make that company grow.

[@harshanhothi455]

What are the chances though of getting into those type of companies in someone’s lifetime?

[@juandager5220]

@@harshanhothi455 I've got friends from college who work for Twitter and Google. It's not easy. But it's not impossible.

[@sherazdotnet]

Very good info. Subscribed. I have been looking to get into FAANG and been preparing while having a full time job. Can get over whelming but so worth it 🙂

[@thomas6502]

Would be curious to see how these are distributed over the industry and location. While a number of these sound really rosy... there are many cases where these are substantially less attractive--at least if the whispers from the alleys are to be believed. Regardless, love your channel and appreciate the work you do Rahul! Thank you.

[@kryptu]

very useful. Thanks for sharing Rahul.

[@jackylalo1]

Thank you Rahul, very helpful info

[@jeffGordon852]

Thanks for the video!

[@RahulPandeyrkp]

You're welcome!

[@quanconnect3608]

TC breakdown of your YOY growth since college? Ever thought of going down Meta PE route?

[@ampersignia]

Hi Rahul, can you talk about landing the first job and positioning yourself in way a hiring manager would value from the coding bootcamp grad perspective? Imo bootcamp grads are an underserved niche of developers needing growth and career advice. Most of your advice seems relevant for currently employed or job hopping engineers and not really those who haven’t been around the block before.

[@mnchester]

Great video!

[@YuqingChan]

this was very educational, thanks

[@sebdoe]

Thanks! The salary video would be helpful

[@RahulPandeyrkp]

working on it!

[@Omikoshi78]

It plateaus at around 300k and becomes less important as you hit this plateau.

[@gilt0301]

Great structure to your videos

[@TKFOO84]

@Rahul Pandey Can you also make a video on how to start a business and make more money than most FAANG engineer?

[@jakehuang3545]

The thing is you also gotta factor in COL in the cities that actually _pays_ those salaries. Like $500K+ of household income in Silicon Valley can really just afford you a decent "middle-class" lifestyle for you and your family (i.e. live in a house in a good school district). These 6-figure salaries really is just "a lot" for single ppl in their 20s.

[@1edgararias]

Thank you for this info. I’ve been so naive

[@g.dubyou6263]

So much good information, online. I came to this channel, through your interview on Clements page. It's just hard to imagine me getting into this at 47. I just can't find enough information on people that are older. Obviously, ageism is a thing, in this career field, especially for someone who has no experience, in this field, yet. I'm already making E4-E5 "base" pay (without stock options or bonus), with 10 years left to a pensioned retirement, which would be my second 20 year retirement. Im retired military, as well. However, I'm not doing what I like. I'm playing with some Python, right now, and I'm starting to lose sleep over the decision to start something my age may keep me from doing, to begin with. Am I wasting my time?

[@galanoth17]

I think you are wasting your time at this point. Tech has a very high learning curve and at this point by the time you get good enough to make those salaries, you might be near retirement age. even if you learn faster, it's harder to get a first time job at that age. It's harder to get a dev job even with experience at that age. Usually you are expected to be working at management/lead roles at that age. Stick to what your normal job or start some business. Tech requires a lot of sacrifice and crazy working hours if you want to get to the top like people making 500k.

[@Limegrntaln]

@@galanoth17 this is definitely what Im struggling with. I wrote my original post 2 weeks ago, and about 2-3 days after writing it, I haven't watched another video on SW engineers. Subconsciously, I'm coming to the conclusion that Im just too old to get into it. Which is crazy, when did I get too old to do anything? Time sure does fly.

[@RahulPandeyrkp]

Sorry for the late reply, I'd love to dive deeper into this with you.Ageism is real and it sucks. However, staying in a job that you don't like also sucks. A few questions to consider: - How much of your job now involves some kind of programming or scripting, or at least a computer? If there's a ton of obviously transferable skill, you'll have an easier time getting interviews and landing a job. - How confident are you in your ability to learn on your own? If you are confident, start building something now and publish it. You can see if you enjoy programming, and perhaps more importantly, also gives you the chance to create some experience that you'll leverage for your job. If you have time and an inclination, there's nothing to lose by noodling around with some personal software. However, it sounds like you've done fairly well in your career already, and the pension sounds pretty nice. I would not abandon all that until you have more clarity on what you're jumping into with a tech job. Let me know if you want to chat more (Taro is my preferred platform haha!)

[@g.dubyou6263]

@@RahulPandeyrkp thank you for replying to my comment. It’s ok, because I didn’t expect you to reply back. I spent 20 years working on F-16s and I spent a few years working at the help desk. We didn’t do much more than setup and unlock email accounts. I was around for the integration and implementation of the CAC (common access card) where your ID has a chip and you insert it into a card reader to login. The rest was mainly imaging and re-imaging hard drives, setting up new machines, keeping inventory, pushing patches at night and tape backups, cloning and degaussing hard drives etc. I did run our squadrons Microsoft Sharepoint page for a few years. Once I took control of the page, it was basically blank. I spent the better part of 6 months getting it setup and running. I used a coding editor to do all of the HTML. Lots of copy paste. I knew that someone wrote code, I just didn’t know anyone, personally that wrote code. I could have used some help, back in 2010-2011. I’d built my first dual video card gaming PC, back in 2008, when Intel released the Core i7 920, and probably about that 2011-2012 timeframe, a friend of mine convinced me to join Stanfords Bitcoin mining pool, but I quickly unplugged, because 2 video cards running my machine all day, and my electric bill in my little apartment in Fairfield, was almost $300. I sold the 60 Bitcoin I had for $80. 🤣🤷🏻‍♂️

[@couloir1]

I've worked at one of the FAANG companies for 7 years and what he says is pretty accurate.

[@aj2228]

intresting. the performance catgories make a perfect bell curve distribution. hhaha

[@hamzayusuf9206]

Do you think ai developments may change this making it easier for development or remote work bringing down salaries ,would love to get your thoughts

[@tkidd250]

Fantastic video

[@nanaandpipi]

Great video

[@galanoth17]

I fucked up by taking my first internship in QA and ever since been stuck in QA even though I know i'm a good programmer. How do I switch? Any tips would be helpful

[@Yin_Esra]

I am surprised to hear that ESPP is used at a lot of companies that do not pay top money for engineering talent. I think that I may have gotten lucky then, because the engineering org I work in gives RSUs, Perf Bonus and ESPP on top of good base pay. I wonder if the ESPP is just a blanket policy across all orgs in our company in this case.

[@RahulPandeyrkp]

if you're getting RSUs as well, that's fine. But if the equity compensation is entirely based on ESPP, that's typically a bad sign.

[@Yin_Esra]

@@RahulPandeyrkp I see, thank you for the clarification.

[@citizenm9590]

Out of the big tech firms for the next 10 years plus who do you think will have a better future growthm? i take it your equity will depend on the company share performance.

[@RahulPandeyrkp]

It's so hard to predict which company in particular will outperform. You're right the equity component of your compensation will be tied directly to company stock. I'd choose a company based primarily on things you may be able to control more, e.g. speed of promo and how much you like the people

[@arvindparsan415]

I'm a senior process engineer working in tech. I'm on the manufacturing side, so I'm a mechanical engineer by degree. Could you comment on what mechanical engineers can expect as opposed to software engineers? I don't expect it to be as high as software engineers but I'd like to have an idea of what to expect.

[@RahulPandeyrkp]

depends less on the role and more on the company. e.g. if you're a mechanical engineer at Meta, you should still expect equity and bonus

[@arvindparsan415]

@@RahulPandeyrkp Thanks for the reply man, I appreciate it.

[@massive_d]

Didn't knew Mark raised the salary bar

[@juliodon8103]

Can you share the offers and incentives progression through out your career

[@RahulPandeyrkp]

I covered the initial offers here: kzbin.info/www/bejne/qJTIhomXnr2Enbc

[@juliodon8103]

@@RahulPandeyrkp ok thanks

[@mohammadkhizar4714]

what’s the tool youre using at 4:49??

[@RahulPandeyrkp]

screenshot from levels.fyi

[@sandipansarkar9211]

finished watching

[@dylanlee4141]

Absolute king (not in tech btw but it's really interesting)!

[@RahulPandeyrkp]

appreciate it 👑

[@TheAlchemist1089]

Is it still a good time to start preparing for the leetcode stuff?

[@darellarocho5729]

Yes

[@MrBemnet1]

Equity grant the same as income

[@cloroxbleach6344]

Would you recommend taro for undergrads?

[@RahulPandeyrkp]

It's good for interns, but not for students (for now)

[@SuperheroKaif]

Hi Rahul! Didn't understand the part where equity actually brings in cash - simply put - say my $400K share has become suppose $500K - can I sell the share and get cash benefit, or company pays dividend and we hold the stock ( a little more detail please). Also my company gives the option for ESPP - what did you say about not paying market up?

[@RahulPandeyrkp]

If you get stock from your employer, there are typically "trading windows" when you're allowed to sell the stock. That's when you can sell everything and get cash. If you hold the stock, you should get dividends, but most of the tech cos don't actually give out dividends.

[@RahulPandeyrkp]

What I meant with ESPP is that companies that offer stock purchase plans will typically not be top-paying companies. The best companies in terms of compensation will offer equity options or RSUs.

[@SuperheroKaif]

​@@RahulPandeyrkp Got it, yes so my company is Accenture and they offer both RSU and ESPP . ESPP is for all while RSUs are for top Sr. Managers and above level. I can buy at lowest of 6 months at 15% discount and sell it anytime - so 10% of salary is deducted for like 6 months and then on 6th month stocks are purchased and it can be sold from the same date - so at least 15% profit is fixed. Thanks for getting back!

[@rdean150]

@@SuperheroKaif ESPP is almost always worth taking advantage of. It just isn't as lucrative as getting shares totally for free. But being able to sell whenever you want can be a pretty big deal when the market is tanking.

[@akashdeepwadhwa5828]

Meanwhile local companies to me .150 rupaiya dega

[@Dxeus]

Band 9, 400k.

[@Omego2K]

What it the company gives both rsu a and espp?

[@RahulPandeyrkp]

I haven't seen that happen too much, depends on the value of each

[@Omego2K]

@@RahulPandeyrkp not big, but my company did both

[@TronSAHeroXYZ]

It's stock. Nothing else. Cyclical stock shorting a buy backs. Don't bs. You think they actually work for it?

[@TechFollower]

I am sometimes thinking why everything comes to money

[@RahulPandeyrkp]

Money is the easiest/most interchangeable form of value you can be offered

[@Drganguli]

Ya software is the best way to make money

[@ravenshroud]

This works at 3 companies. Nowhere else is this common.

[@galanoth17]

Thanks for the video. Just a tip. Move the camera further away from your face.

[@RahulPandeyrkp]

I should have. I was experimenting with a different camera angle since I was screen sharing

[@doords]

Benefit/Perks is when someone stash free food into their bag everyday. You guys all know someone who does it or do it yourselves.

[@RahulPandeyrkp]

Yep happened all the time 😅

[@SoldierOfWudan]

I always wondered what it looks like to be on Adderrall

[@galanoth17]

🤣

[@freespirit8791]

What are the working hours to make 500k?

[@RahulPandeyrkp]

Not that much more than a "normal" $100k job. In fact it may be better (more flexible) since at that point the company has to deeply trust you

[@rishbahpandey8697]

@@RahulPandeyrkp wht about taxes??

[@rajasanchit]

You get paid in 2 weeks in USA??

[@RahulPandeyrkp]

every 2 weeks

[@samaya9992]

Most tech stocks are down 40 to 80% from peak so I don't think this trend of high pay salaries for tech workers will continue.

[@RahulPandeyrkp]

That means it's a good time to join -- if stocks return to their previous highs, you get a pretty big increase simply from your equity!

[@dhanamjayas]

What is Meaning of FAANG?

[@RahulPandeyrkp]

Fairly Average Alternate Names for Google

[@dhanamjayas]

@@RahulPandeyrkp 🙏👍

[@rajivjha123]

Neeman baa ho babuaa . Pandey jee ke khabaar kanee dedet baa ho babuaa

[@xordux7]

Thank you Mark Zuckerberg!!

[@GrandTerr]

This is the first innovation that I've heard Mark has done. Idk how the hell he's mentioned in the same sentence with Steve jobs and Bill Gates.

[@RahulPandeyrkp]

bidding wars = good for employees

[@GrandTerr]

@@RahulPandeyrkp do you think it's likely that due to the amount of software engineers and better education around software will create more of employers' market? Making software engineers earn similarly to other engineering industries.

[@drayalec2928]

@@GrandTerr I think swe have more agency than other engineers to go out and build a startup. So that is also priced into the market.

[@drayalec2928]

They need practically no leverage to create value so it’s a fundamentally different problem

[@GrandTerr]

@@drayalec2928 compensation link to start up possibilities is new to me, I'd have to think about it which I won't xD Thanks for the response

[@vectoralphaAI]

Because they're all in California.

[@thyagarajesh184]

Advertisement revenues will have significant shortfall in coming years. How will this downturn impact an engineer's compensation at FAANG ?

[@RahulPandeyrkp]

yea, in recent months due to the economy, there are more layoffs and bidding wars are less common now

[@rdean150]

The rise of AI tools are going to put downward pressure on our compensation as well. Even if our own roles are too advanced for current AI models to be useful, these tools will inevitably lead to headcount reductions in other companies or roles, thereby increasing the supply of developers competing for the available jobs. More available supply means less valuable, which means less competitive compensation. 😞

[@lahvoopatel2661]

When decent software ICE or manager making $250k TC suddenly jumps to $600k with determined two months of DDIA and LC while no where to go for vacation during Covid; you know fed printing has gone too far. This will end badly not for who don’t deserve surgeon level comps but also every other professional in this industry. For anyone comparing doctor or surgeon with rain of the mill python coder, just go through few pages of pre med textbook.

[@TheAlchemist1089]

DDIA?

[@rdean150]

Yep, fast forward 3 months and we are fully in the "ending badly" phase of that situation. And yes, it is bad for all of us, even those of us who didn't play the Great Resignation wheel of fortune. Because now suddenly there are hundreds of thousands of engineers dumped onto the market, and all of our companies have zero reason to offer us decent bonuses/raises, because suddenly we're all easily replaceable. More supply than demand makes us all less valuable. Hope it was worth it, guys. Thanks a lot.

[@yuvichh]

Open Source people: sees FAANG in thumbnail, unsubscribe it asap 😅😅😅😅

[@YasinNabi]

Passive income is the only way to become millionaire... work on your passive income streams .... a fellow creator

[@lalaliri]

I saw a post of a guy, who is a senior software engineer, with only 2 years of experience saying he got offers from companies to receive 960k a year, in California. Do you think it's realistic or probably a lie?

[@realgyan4910]

It maybe possible. With startup funding there is a artificial demand that has been created and hence fools are becoming rich.

[@deuce5243]

That’s a lie lol.

[@issasecretbuddy]

maybe at a fintech firm, or the numbers are vastly overinflated based on guesses at stock price or web3 token speculation

[@abeg9959]

Yeah, thats probably a lie. Or he's including all the potential earnings with his salary into one big whole pot. But i highly doubt someone with only 2 years of experience can make that high of amount.

[@free-qe6wx]

Unfortunately, the party is over, and its going to be a long while before you see this kind of job market craziness again. Hope it was fun while it lasted. When we come out the other end of this recession/depression, none of these companies will pay out like that ever again.

[@rdean150]

Yep.

[@thejusunnivelan7193]

It’s MAANG now brother

[@AdityaKumar-jz8vo]

But Kunal bhaiya once said 'FAANG' pay less to indian engineers.

[@RahulPandeyrkp]

I'm not sure about the Indian market, I'm in the US

[@Werevertumoto]

@@RahulPandeyrkp indian engineers in the US

[@AdityaKumar-jz8vo]

@@RahulPandeyrkp yes i know , yesterday i watched you ,alex, and kunal bhaiya in his video ...this year i m starting my journey , always need your guidance..Take Care ❤

[@usaindian1704]

They will work for two years and then quit to become KZbinrs.

[@stewiegriffin6503]

sounds like a scam

[@realgyan4910]

It’s sad to see people getting paid such artificially high salary for easy coding work. Even Doctors who literally save lives make so much less.I really hope for for a strong recession so that everything falls in place and inflation is tamed.

[@mastermind5421]

Doctors make so much less??? Where lmao

[@NotTubeIm]

If you think it’s easy then join one yourself. Maybe when enough people join the pay will go down, since it’s so easy, you know.

[@morkallearns781]

If it was so easy then all of the people flooding the labor supply would push salaries down. But they don’t, because the gap between a software engineer and a good software engineer is huge

[@realgyan4910]

@@NotTubeIm bro I already work in tech (chip manufacturing- the real deal) and I know fools who have done leetcode for few months and got into FAANG. It’s just that due to excessive money printing the startup’s created artificial demand

[@realgyan4910]

@@morkallearns781 The excessive money printing by FED created a artificial demand due to which many decent software engineers and being hired by startup’s…which are gonna fail in recessions. Then the demand will correct itself. Coding is not that hard …definitely not worth so much money.

[@markjou9799]

Why do you talk like that?

[@BrendanDell]

Great video!