TECH CAREERS
Negotiation
Compensation — Initial Discussions
Tech compensation is generally broken down into three parts: (1) Base salary; (2) Bonus (if applicable), usually a percentage of base salary; and (3) equity. “Total compensation” = Base + Bonus + Equity
For public companies, this is stock (a.k.a RSUs - restricted stock units) that follows a “vesting” schedule - standard is over 4 years, where at the end of the first year you get 25% of the total amount of stock, and then every quarter after you get 1/16 of the remaining stock “vested.” Be sure to research it for your company (e.g., Amazon vests less in the first year, Google vests more in the first year).
For private companies, equity may be “options” a.k.a ISOs is the primary option, (independent stock options) where you have the right to purchase the stock at a “strike price” (given by a 3rd party, fair market valuation in a 409A). See this link for more info. Some larger private companies also offer stock in RSUs
Note that private options or private RSUs can be hard to liquidate and can vary wildly in price.
A note about bonuses: there are a variety of different types of bonuses; sign-on bonuses are probably the most lucrative (you could be offered 10k in your paycheck that shows up in the first month) and relocation bonuses (would be sweet if you were planning to relocate anyways, and using military transition benefits for it, so it’s just free money). Some companies have a formal performance bonus structure where you pretty much are guarantee a certain % of your base, other companies don’t have this. Some companies call money that you get for holding your clearance a “bonus,” others call it a “stipend”. At a company like Palantir, for example, it’s called a stipend, and it ranges in pay-out depending on how many cleared projects you do in the last calendar year. You should factor bonuses like sign-on/relocation bonus into your first year compensation, but you cannot rely on it to be part of your reliable annual total compensation. Companies use bonuses as the easiest way for that “final push” to get you to feel good about joining their company.
Consider benefits as part of the total package, things like parental leave, medical coverage, gym/health benefits, food at the office (hot breakfast, lunch, dinner at some, no food at others) all make a huge difference on quality of life and should have some value in your comparisons. Also something to ask your recruiter when you first start off or get farther into the process.
Levels.fyi has pretty good compensation data for larger tech companies. Check it out to see what a reasonable range is for your job family (e.g,. Program Manager, software engineer)
Note, this may not be accurate / available for smaller startups
If you have a specialty check the breakdowns for each level. You can see specific offers by specialty to get a better feel for what you can expect.
Recruiters will ask you how much money you expect in initial calls. Do not tell them a number. Do not tell them how much you currently make.
Do research (Levels.fyi, Rora, Blind) to understand the fair market range
Say something like “I don’t have an exact number in my head at this time, but I’m really excited about the prospect of working for [XX]. Do you have a compensation range for this position?”
They will usually give you a range, clarify if that is base salary or total compensation (base + bonus + equity)
Your ideal scenario is timing your interviews to receive multiple, competing offers within the same time window. This gives you a strong negotiating hand and lets you play companies off one another
Negotiations after you receive a verbal offer
Be polite, be enthusiastic, but be driven…. Good negotiation can make tens of thousands of dollars of difference to you and your family.
Be nice and polite to your recruiter. Their opinion of you could make a huge difference in how your counter is conveyed to the team that determines your offer. You also hope to have a long career, so having recruiter friends is helpful.
Barring extreme changes internal to a company, your offer will never go down, so you will never be hurt by negotiating.
If your offer isn't the best and final, you’re not done negotiating. Even if you just got a big jump, if your recruiter hasn’t said anything like “they can’t go any higher” there is money left on the table and it will not negatively affect you to send the current offer back with a reasonable response. That’s even without competing offers.
Feel zero guilt about negotiating. You’re not greedy, the company is greedy for having an amount they’re willing to pay you but keeping it a secret to try and keep it for themselves. $10k may not matter much to them, but it probably will to you.
Being down-leveled
Big tech (e.g., Meta, Microsoft, Google) often down-levels candidates. They may start you in a L5 interview loop then approve you for L4 instead. If you feel like your performance was mostly good but lacked in one area (e.g., system design) and your recruiter agrees, it’s possible to ask for another interview for the level you want.
If you don’t have an offer for a higher level from a different company, then that level is probably all you’ll get.
Sequencing and Framing Negotiations
Can you create a bidding war?
You want to have multiple, competing offers, to make each company give you its “highest and best” offer
This may mean delaying one round of interviews (for a fast moving startup) so your offer comes at the same time as a slower moving big tech company
Let your recruiter know you’re interviewing at other places
You can ask for more time to finish another company’s interview loop
It makes you seem more desired, validates that you have options and can walk away from a bad offer
Don’t be the decision maker
[if pressured to accept an offer now] “I’d love to move forward with [company], but I wouldn’t be doing justice to my partner and my family if I didn’t see this Meta interview through to the end”
[on a call] “Thank you for this information, let me take it back to my spouse and talk it over then get back to you”
Tactically share information
You don’t need to tell them the exact level and other companies you’re pursuing. If the competing company is strong (Open AI, Apple, Meta), flex it. If it’s less strong, talk in generalities.
Let’s say you’re interviewing for a Senior ML SWE role at Apple, Senior SWE at Meta, Senior SWE at Instacart; and Staff ML SWE at a Hugging Face…. When asked if you have other offers you might say “I’m finishing an on-site for senior/staff at another big tech firm; a decacorn; and a genAI unicorn startup. I’m most excited about this opportunity at Microsoft because of [x] but wanted to be up-front that I expect to have competing offers”
What do you need to be happy and excited?
Remember the questions you asked yourself early in the process
Do you want stability? Growth opportunity? Cash in hand? Fast paced environment?
On the Phone With Recruiters
Recruiters are interested in getting you into the role, but they still work for the company. Be friendly, be excited, but don’t feel too pressured.
Prep before your calls with recruiters. Write down everything you say to a recruiter, they will be writing things down
Send follow up emails with the details of any compensation offers (base, bonus, range, equity, etc)
Ask for benefit plans in writing, these are part of the package. Parental leave, healthcare, 401k match are real differentiators!
Cite other data points you have (that anchor the conversation higher)
“I see that the range on Levels.fyi… based on market comps, talking to colleagues, and my other offers, I’m expecting something at the top end of this range”
“From my network, I see multiple offers for this level and city in this range”
“My friend just received an offer for a similar role at [x] for $350k”
Reaffirm your value
“My blend of being an ML expert, TS/SCI clearance, and experience as a senior IC and manager driving big projects has gotten more job market than I expected, but I think the fit is right is really at [company] because [Z]”
Your Secret Weapon
“I want to make it work at [COMPANY]. I strongly feel this is the right home for me. I could sign today for [amount] total compensation and end my other negotiations.”
You can only use this 1x, but it’s a very powerful way to get a company that wants you bad to go the last step and give you their true “highest and best”
Don’t use on multiple companies
Red flags
If a company is offering significantly less equity than comparable or larger companies (e.g., $10k vs $100k)
A private company won’t tell you 409a price, preferred price, shares outstanding
Beige flag: they won’t tell you what revenue and profitability was last year
Some companies front-load or back-load stock. Meaning you may get paid $250k in year 1/2 and $190k in year 3/4. Make sure to compare the full 4-year equity grant and compensation of company A vs company B
Comparing Public Company and Private Company Offers
It’s not 2021 in a zero interest environment. Not every company is going to IPO and they may IPO at a lower valuation than they last raised at. Good for investors, not for you. Your private equity may be worth 50% of what you think, or 5x…
If you make $300k but $100k is illiquid (options), you will feel like you make $200k
Late stage companies (Series D, E, F) have higher strike prices; you may earn $200k in options but need $25k to pay for the right to own the shares. You may have a ticking clock of ~90 days to exercise these options if you leave the company
Private Companies will try to make you feel like their stock will 10x; and they are going to IPO in 18 months…
Public companies will try to discount the value of private stock by 25%+ in negotiations
What if I accept an offer and have a bad feeling about it later
Negotiate in good faith, always. Don’t accept an offer if you aren’t convinced
If you verbally accept an offer and feel like “wow, i really don’t feel good about this” (because company B came back with a crazy offer, you’re making a huge compromise like commuting 3 hr per day) you can pull out. It feels icky, you may burn a bridge, but you should do the right thing for you and hating a job isn’t good.
Tell anyone who referred you immediately (preferably over phone)
Tell your hiring manager (preferably over phone)
Tell your recruiter (email is fine here, cc hiring manager)
If you sign an offer, re-read it. Most contracts are at-will employment
You’ll probably burn the bridge for a smaller company. Might be a 1-2 year cooling off period with a larger company