Earn $50,000+ just by asking the right way . Learn to speak the language of tech compensation.

If you're not plugged in to the right social circles, you're locked out of tribal knowledge on tech compensation and it’s a huge disadvantage.

Salary negotiation strategies everyone in tech already knows — but you don’t

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Millions of dollars change hands in salary negotiation — you owe it to yourself to understand compensation.

First, a reality check: there's a lot of money in tech . New grads at big tech companies will routinely earn $150k+ starting salary. With a bit of work, you can reliably achieve $500k total comp, even as a frontline individual contributor.

Understand tech compensation

There’s a lot outside of salary that forms your total compensation package. Your "total comp" includes at least:

This complexity exists partly to help both sides feel like they got a deal. If there's only one number to argue on, nobody walks away happy. A big part of salary negotiation is using the complexity to your advantage: knowing which lever to pull.

Base salary — the money you’re paid every pay period.

— the money you’re paid every pay period. Equity — ownership stake in the company, could easily be half your total comp or more.

— ownership stake in the company, could easily be half your total comp or more. Benefits — in the US, health insurance alone can easily cost your employer $500-1000/month. Benefit packages also includes things like vacation days, free food and other perks. This is (mostly) not taxed, so you’d rather have these benefits than the equivalent in cash.

— in the US, health insurance alone can easily cost your employer $500-1000/month. Benefit packages also includes things like vacation days, free food and other perks. This is (mostly) not taxed, so you’d rather have these benefits than the equivalent in cash. Annual bonus — percentage bonus on top of your salary based on performance, common only with public companies. The recruiter will likely quote you a "target bonus" (e.g. 15%), which is what you can expect if you meet expectations. Generally also comes with additional equity (a "refresher").

— percentage bonus on top of your salary based on performance, common only with public companies. The recruiter will likely quote you a "target bonus" (e.g. 15%), which is what you can expect if you meet expectations. Generally also comes with additional equity (a "refresher"). Signing bonus — one-time bonus paid out either when you sign or the day you start. Might come with a clause that you must pay it back if you leave after X months. Quite common in large tech companies, can be anywhere from $10k–$100k. Highly negotiable.

— one-time bonus paid out either when you sign or the day you start. Might come with a clause that you must pay it back if you leave after X months. Quite common in large tech companies, can be anywhere from $10k–$100k. Highly negotiable. Other perks — a whole suite of one-time or ongoing cash perks, like relocation package, phone stipend, commuter benefits, car allowance, etc.

The biggest input that controls comp is "level", a number that express your seniority. For example, level E3 at Facebook is new grad, E4 is for hires with a few years experience and so on, up to E9 (after the first few levels, experience becomes less important).

Levels are completely non-standard between companies (e.g. an “L5” engineer at Amazon is not equivalent to an “E5” engineer at Facebook)

The more expensive/higher level you are, the more complex your comp mix becomes and the more it'll skew towards equity.

Understanding & valuing equity

Womenearn half the equity men do – equity is complex and ripe for bad outcomes.

Equity is an ownership stake in the company. Your stake in the company converts to money only if one of two things happens: the company is purchased or it becomes listed on the stock market (an IPO).

An equity grant is generally for a 4 year period — you’ll get X number of shares over 4 years and you'll progressively earn (or vest) over that period. Vesting will generally be subject to a 1-year “cliff”: you don’t earning anything in the first year, and on your first anniversary, you vest ¼ of the shares. This formula (“4 year vest, 1 year cliff”) is nearly universal in tech.

Equity is complex, the Holloway guide is the best overall overview if you want to learn more.

The company will never give you stock directly, because you'd have to pay taxes on it right away. Instead, companies have designed roundabout mechanisms to delay taxation. The two most common are RSUs and stock options.

If you were offered Restricted Stock Units (RSUs), common with larger companies An RSU means the company promises to give you shares whenever they IPO or sell (they're not giving it to you right away because you'd pay taxes now). This is good and the lowest risk/complexity to you. This is a future promise and because of that, it generally comes with a lot of strings attached. For example there often are constraints on when, how and to whom you can sell your equity.

If you were offered stock options (ISOs/NSOs), common with startups A stock option is the option to buy shares at a discounted price, known as the "strike price". For example, you might have the option to buy shares at $1. If, based on the current valuation of the company, the shares are worth about $1.50, your equity is worth $0.50 × number of options you have. You're hoping the shares will be worth $10+ by the time you leave: the wider the gap, the better. The strike price is frozen when you join and you only have to decide whether you want to buy shares when you leave. To emphasize, you need to spend money to get shares. That can easily cost you 10s or 100s of thousands when you leave — even if you're getting a great deal on the shares, this may or may not be money you have lying around. Stock options are generally more volatile than RSUs but are considered preferable because if you play your cards just right, they have big tax advantages. The tax implications are intricate and you should absolutely speak to a tech-focused CPA if any meaningful part of your compensation is stock options.

When a company offers you equity, they’ll quote you a value: X,000 shares over 4 years, “which is worth $X00,000.” (if they don't, ask)

That value is based on what investors have paid for the company in the last financing round. If the latest investors paid $1M for 1% of the company, the company's valuation is $100M and therefore a 0.1% stake is "worth" $100,000.

Generally, all tech companies, small to large, offer equity but not always to all employees — support, marketing, operations, etc. might not always get equity, especially junior employees.

Depending on the stage of the company, that number is anything from “as good as cash” to pie-in-the-sky voodoo.

For a public company listed on the stock market (Facebook, Amazon, etc.) You’ll be able to sell your shares directly on the stock market. There’s some restrictions (for example, lockout periods: you’ll only be allowed to sell certain weeks of the quarter), but the shares are basically as good as cash. However, the value of the shares will vary a lot throughout your tenure. It’s as if a good chunk of your salary is forced to be invested in one stock — it’s probably not what you’d do if you had a choice and that lack of diversification is worth something. At Candor, we value equity in a public company at about 80-90%, depending on how much you believe in the company will do on the stock market in the next few years.

For a growing, successful pre-IPO company (Airbnb, Stripe, etc.) For a successful, high-growth company with prominent investors, you can reasonably expect your equity will be worth something, at some point. Regardless, it'll be years before you see any money. Consider the equity as worth 60-90% of the quoted value, depending on how much you believe in the company, how far along they are and your risk tolerance. Also, keep in mind your chances are good, but there's no guarantees. For a mature company that's clearly on track to IPO (Doordash, Airbnb, etc.): you probably should prefer equity over cash. Being an employee is one of the few ways a mere mortal can get equity. If you believe in the company's prospects and don't need immediate liquidity, consider valuing the equity at 100-130% and negotiating for more equity over salary.

For a young startup Assume you'll be bad at picking the right company — you’re worse than professional investors in basically every way: they have more experience than you, they have more information and plus they have a chance to diversify. And yet even the professionals do very poorly: easily 50-80% of early VC investments will never exit for anything meaningful. Treat your equity as a lottery ticket. Disregard any $ value the recruiter might have told you and be ready to live 100% on the base salary. Think hard if you’re ok with that. You do have one advantage: you’ll get an inside look at the company. If you join an early stage company where a substantial part of your compensation is equity, your job is to figure out whether this company will make it and be ready to leave promptly if you don’t think you can shift the trajectory.

In all cases — congrats! Whether you like it or not, you're now a startup investor. Investor Harj Taggar has sometips on how to pick the right company.