January 14, 2014, 6:20 AM —
Image credit: REUTERS/Christian Hartmann
Last week Business Insider (BI) ran a story about a Google engineer who "blew off" the offer of a $500,000 salary from a startup because he was already making $3 million a year, in salary and stock awards, at Google. The story came from an unnamed source, so who knows if it's really true. But, since I'm always interested in developers making really big bucks, this one caught my eye and made me wonder, how realistic is it that a Google engineer is making that much?
Software developers making a million dollars or more per year are, certainly, unusual. Former Wall Street programmer Sergey Aleynikov famously made a million dollar salary as a true in-the-weeds code-writing developer, but a salary that high for a programmer is particularly unusual. According to the U.S. Bureau of Labor Statistics, in 2012, the average salary for an application software developer was $93,000, with only 10% of such developers making more than $139,000 in salary.
Clearly, then, any Google engineer making $3 million per year is getting most of that in bonuses and/or stock. But how much in non-salary compensation do Google engineers really make?
According to Glassdoor, a site which collects self-reported compensation data from workers, here's how the pay for Google software engineers breaks down (based on 4,440 respondents):
Average Total Compensation: $144,652 (ranging from $78K to $550K)
Average Salary: $118,958 (ranging from $78K to $215K)
Average Cash Bonus: $20,946 (ranging from $20 to $100K)
Average Stock Bonus: $30,933 (ranging from $125 to $200K)
Assuming these numbers are accurate and representative of Google engineers in general (a leap of faith, for sure, but it's the best data I could find), your average lower-level software engineer there makes $145K per year, including stocks and bonuses. The high end was a $550K salary, $100K in cash bonus and $200K in stocks, so about $850K per year.
Glassdoor also has compensation data from senior software engineers at Google (246 respondents). Here's how the numbers break down for them:
Average Total Compensation: $210,865 (ranging from $80K to $630K)
Average Salary: $149,740 (ranging from $80K to $222K)
Average Cash Bonus: $32,008 (ranging from $25 to $80K)
Average Stock Bonus: $49,315 (ranging from $50 to $300K)
Senior software engineers at Google make an average total compensation of $210K. At the highest end, they make $630K, with $80K in cash bonus and $300K worth of stock grants, just over $1 million per year.
Based on all this, $3 million per year is about three times the highest reported annual compensation for a Google engineer. Does that mean the BI story wasn't true and that no engineers at Google are really making that much? Not necessarily. It could that the person in the article is really executive in engineering or a "10x engineer" (or, at least, a 3x engineer); that is, somebody with exceptional talents, skills and credentials who essentially does the work of 10 engineers.
Commenters on the story on BI and Reddit have posited that the $3 million Google engineer in question is Jeff Dean, a Senior Fellow in the Knowledge group who,SFGate.com wrote, is "widely credited by Googlers for the blazing speed of the company's famed search engine." It would make a lot of sense that, if any engineer at Google is making $3 million - and is a 10x engineer - it would be Jeff Dean, who is clearly exceptional.
The takeaway from all this? Google engineers make good money, but even for Google engineers, $3 million a year is a whole lot of money.
Read more of Phil Johnson's #Tech blog and follow the latest IT news at ITworld. Follow Phil on Twitter at @itwphiljohnson. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.