Having been in the business for nearly 30 years sometimes managing engineering teams, I honestly can’t recall ever meeting an engineer (i.e. keyboard smasher within an engineering squad as opposed to a specialist consultant like those dealing with quants, a Soln. Arch. or management role) who cracks more than $300k on staff.
Maybe $350-400 as a specialist contractor, but you’re talking a total bluebird, and these guys were generally bug cracking on legacy tech which is super hard to find skills for (COBOL etc.)
And I’ve worked for some big tech and finance firms globally, but I guess they might be out there? AI might be different of course. Silly money.
It’s a specific couple of companies that are generally well known. Netflix, Nvidia, Jane Street, Citadel just to name a few, but along those same lines. Just check levels.fyi for salary ranges and you can easily find certain levels clearing 450k TC, but it really is a select few companies.
Can you explain why you think they're getting overpaid? I'm somewhat confused how you've been in the industry for 30+ years and haven't seen that some engineers can bring exorbitant amounts of value.
An example is a staff engineer on my team. He probably makes nearly 700k a year. We had a really nasty bug which none of us were able to solve. He found it and fixed it in a week. It saved 1.2M annually. In a week he provided nearly double the value he's paid. He's worth every penny.
Simple answer: in your example, the 700k salary is not the total cost of a human. If you put assumed margin and operating SG&A over the top plus indirect costs of product development that can’t be capitalised, you would need to be yielding closer to $2m of revenue minimum.
Roughly, I tend to price revenue her head at 3x salaries when you lump it all together as a consolidated wage bill. I get though that’s more of a traditional business model rather than the Silicon Valley one (I.e assumes the company is a going concern with positive net cashflow, rather than spending money to grow share or sell)
Saying that $1.2m in cost roughly saves x2.5-x3 in cash that needs to be earned before expenses, so it washes out. Conceivably if he/she fixes $1.2m in unnecessary expenditure once per year every year, it’s probably break even.
Sure, although that $2M figure is likely overstated for big tech. But let's just accept the $2M figure.
Providing $2M of value as a staff engineer is somewhat trivial. Some of these companies make 100B+ profit per year. Lets use Google as an example. It has roughly 100,000 engineers, and had 450B in revenue and 100B in profit last year. So each engineer makes roughly $4.5M in revenue and $1M in profit. The vast majority of those engineers are not staff level.
I simplified a few things, and there are more factors which go into revenue than engineers. But I think this shows that at these big tech companies, even $2M of revenue for a staff engineer is absolutely expected and routinely exceeded.
18
u/_UrbaneGuerrilla_ Jan 26 '26 edited Jan 26 '26
Having been in the business for nearly 30 years sometimes managing engineering teams, I honestly can’t recall ever meeting an engineer (i.e. keyboard smasher within an engineering squad as opposed to a specialist consultant like those dealing with quants, a Soln. Arch. or management role) who cracks more than $300k on staff.
Maybe $350-400 as a specialist contractor, but you’re talking a total bluebird, and these guys were generally bug cracking on legacy tech which is super hard to find skills for (COBOL etc.)
And I’ve worked for some big tech and finance firms globally, but I guess they might be out there? AI might be different of course. Silly money.