A reality check: There's serious money in tech. New grads at big tech companies routinely earn $150k+ starting salaries. With strategic career moves, you can reliably achieve $500k+ total compensation, even as an individual contributor.
Millions of dollars change hands in salary negotiation — you owe it to yourself to understand how compensation really works.
Understanding Tech Compensation: It's More Than Just Salary
Your total compensation package is complex by design. Here's what actually matters:
The Components of Your Package
Base Salary — The money deposited in your account every pay period. This is the most straightforward component but often not the largest.
Equity — Your ownership stake in the company. This could easily be half your total compensation or more at senior levels.
Benefits — In the US, health insurance alone can cost your employer $500-1,000/month. Benefits packages also include vacation days, meals, gym memberships, and other perks. These are mostly tax-free, making them more valuable than equivalent cash.
Annual Bonus — A percentage bonus based on performance, common in public companies. Recruiters quote a "target bonus" (e.g., 15%) which assumes you meet expectations. Often comes with additional equity grants called "refreshers."
Signing Bonus — One-time payment when you join, ranging from $10k–$100k at large tech companies. Highly negotiable but may require repayment if you leave early.
Other Perks — Relocation packages, phone stipends, commuter benefits, education reimbursement, and more.
The Level System: Your Biggest Lever
The most important factor controlling compensation is your "level" — a number expressing your seniority and scope of responsibility.
Key insights about levels:
- Each company has its own system (L5 at Amazon ≠ E5 at Meta)
- Higher levels mean exponentially more equity
- It's better to be at the top of a lower level than bottom of a higher one
- Your interview performance, especially system design, heavily influences initial level
Example level bands at a major tech company:
- Junior (L3/E3): $130k-$180k total comp
- Mid-level (L4/E4): $200k-$350k total comp
- Senior (L5/E5): $350k-$600k total comp
- Staff (L6/E6): $500k-$1M+ total comp
Equity: The Wealth-Building Component
Women earn half the equity men do — largely because equity is complex and intimidating. Let's fix that.
How Equity Works
Equity represents ownership in the company. It converts to actual money only when:
- The company goes public (IPO)
- The company gets acquired
- You can sell on secondary markets (rare)
The Universal Formula: 4-year vesting with a 1-year cliff
- You earn nothing in year one
- On your first anniversary, 25% vests
- Remaining 75% vests monthly or quarterly
RSUs vs Stock Options
RSUs (Restricted Stock Units) — Common at larger companies
- Company promises to give you actual shares
- No upfront cost to you
- Taxed as income when they vest
- Lower risk, more predictable value
Stock Options (ISOs/NSOs) — Common at startups
- Right to buy shares at a fixed "strike price"
- You must pay to exercise (convert to shares)
- Can cost $10k-$100k+ when leaving
- Higher risk but potentially massive upside
- Complex tax implications (consult a CPA)
Valuing Your Equity Offer
How much is "$400k in equity over 4 years" actually worth?
Public companies (Google, Meta, etc.): Value at 80-90% of quoted price
- Shares are liquid but forced concentration in one stock
- Subject to market volatility
- Some lockout periods but essentially cash
Late-stage private companies (Stripe, Databricks): Value at 60-90%
- Track record of growth
- Clear path to IPO
- Consider it a medium-term investment
Early-stage startups: Treat as lottery tickets
- 90% will never have meaningful exits
- Value at $0 for planning purposes
- Upside comes from being an early employee at a unicorn
Pro tip: You're now an investor. Research like one. Does the company have product-market fit? Strong leadership? Growing market?
Determining Your Market Value
Why Glassdoor Gets It Wrong
Popular salary sites fail tech professionals because they:
- Ignore or mishandle equity (often 50%+ of compensation)
- Use outdated data in a fast-moving market
- Don't account for company size/stage differences
- Mix different geographies and role levels
Better Research Sources
For accurate data:
- H1B filings — Public data but base salary only
- Levels.fyi — Crowdsourced but verified tech compensation
- Blind — Anonymous but generally accurate for big tech
- AngelList — Transparent startup compensation
- Third-party recruiters — They know current market rates
The truth: Employers have entire teams dedicated to compensation analysis. Your best defense is thorough research and multiple data points.
The Negotiation Playbook
Pre-Negotiation: Setting the Stage
Never reveal your cards early:
When asked about salary expectations, respond professionally:
> "I'm looking for a competitive offer based on the role's responsibilities and my experience. I'd love to hear what range you have budgeted for this position."
If pressed further:
> "I'm confident we'll reach a fair agreement if there's mutual fit, but I need to learn more about the role and team first."
This is standard — every experienced professional deflects early salary questions.
The Initial Offer Call
When they extend an offer, control your response:
> "I'm really excited about the opportunity! Thank you for the offer. I'll need some time to review all the details. Can we schedule a follow-up in a few days? In the meantime, I have some questions..."
Critical questions to ask:
- "What level is this offer at? What distinguishes this level from the one above?"
- "What's the salary band for this level?" (Required by law in many states)
- "Can you break down the equity valuation and vesting schedule?"
- "For options: what's the strike price and post-termination exercise window?"
- "Is there flexibility in the compensation structure?"
The Negotiation Framework
First, ensure the level is right:
If you believe you should be at a higher level:
> "Based on our discussions about leading company-wide initiatives and my experience with [specific example], it seems like L6 might be more appropriate. Could we revisit the leveling?"
Then negotiate within the band:
Once level is set, target the upper half of the range:
> "I'm very excited about joining the team. Based on my research and the value I'll bring — particularly my experience in [specific area] — I was expecting total compensation closer to $X. Can we work together to get there?"
Strategic Compensation Mix
If you hit resistance on base salary, shift the mix:
- Try moving base to equity first
- Then explore signing bonus
- Consider other perks (extra PTO, education budget)
Example negotiation flow:
> You: "I'm looking for $350k total compensation."
> Recruiter: "The base salary is capped at $180k for this level."
> You: "I understand. Could we increase the equity component to reach $350k total?"
> Recruiter: "I can add $20k more in annual equity."
> You: "That helps. Could we bridge the remaining gap with a signing bonus?"
Closing the Deal
When you reach acceptable terms:
> "This works for me. I'm excited to join the team! Please send the written offer and I'll sign immediately."
Follow up with email confirming the agreed terms.
Advanced Strategies
Using Competing Offers
The most reliable way to maximize compensation is genuine competing offers:
- Never bluff — recruiters know market rates
- Share that you're "exploring multiple opportunities"
- Be transparent about timelines
- Use offers to establish your market value
Negotiation for Different Company Stages
Big Tech: Less flexibility on level, more on compensation mix
Late-stage startups: More equity flexibility, emphasize long-term belief
Early startups: Negotiate for higher equity percentage, not dollar value
Red Flags to Avoid
- "Exploding offers" with unfair deadlines
- Promises without written confirmation
- Equity without transparent valuation
- Below-market base "made up for" with uncertain equity
Taking Action
The biggest mistake in salary negotiation? Doing nothing. Companies expect negotiation — it's built into their initial offers.
Your next steps:
- Research your market value using multiple sources
- Practice deflecting salary questions
- Prepare your negotiation strategy before receiving offers
- Always negotiate — respectfully but firmly
Remember: Over a career, effective negotiation can mean millions in additional earnings. The few uncomfortable minutes of negotiation are worth years of higher compensation.
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