Beer money - negotiating salaries

Published February 3, 2019

We’ve talked about interviewing for engineering jobs, but once you have an offer, how do you negotiate the salary? In this episode, we’re joined by Matthew Gerstman, an engineer from Dropbox to talk with us about salaries, and stock.

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Episode transcript

Ryan Burgess
Welcome to a brand new episode of the front end happier podcast. We are joined by our very special guest today, Matthew gertzman to talk with us about negotiating salaries. Matthew, can you give us a brief introduction of who you are, what you do, and what your favorite happier beverages?

Matthew Gerstman
Sure. My name is Matthew Gerstman. I am a software engineer at Dropbox. I am a slither in. I also co host a different podcast called the console log. And my favorite happy hour beverage. I am pretty basic. I like the low Cal vodka soda. Hey,

Ryan Burgess
that's that's actually a first on our episode. So well done. And actually we've had your fellow co hosts for the console. log on previous episode, it's been a while but we did have Harry wolf on he is Harry like the wolf. He'll be listening to this and just seemed like God damn it. Let's also go around the table and give introductions of today's panelists, Augustus you want to start it off.

Augustus Yuan
Yeah, sure. My name is Augustus Yuan and I am a front end engineer at Evernote. I'm Stacy London. I'm a senior front end engineer at Atlassian.

Jem Young
Jem young, senior software engineer at Netflix,

Ryan Burgess
and I'm Ryan Burgess. I'm a software engineering manager at Netflix. In each episode of the front end, happier podcast we'd like to choose a keyword that if it's mentioned at all in the podcast, we will all take a drink. What do we decide today's keyword is bass bass, which bases it I'm all about that bass, about that

Jem Young
bass. I was really hoping no one. thought we were above that, but

Matthew Gerstman
I'm not above anything. I see.

Ryan Burgess
All right, well, let's hop right into this salary negotiation topic. How important is it to negotiate your salary during an offer from a company.

Stacy London
super important. All right, done. So done.

Ryan Burgess
Yeah, we solved the problem.

Jem Young
I would say it depends

Ryan Burgess
all right what is it depends on

Jem Young
your seniority. What they're offering the company size like many many things I would not advise going in like I'm fresh out of college. Pay 100 k me more money than like your offering because like, you didn't earn it you don't you don't know anything yet. Like there are certain jobs you take Ryan I we've had similar upbringings. Like we took a lower salary beginning so we can learn more stuff. Yeah, then move on. I don't know if I had the choice. I think I just thought was what I got paid. Exactly. Not everybody has a choice to negotiate.

Matthew Gerstman
For the for the record. If you are a new grad working at Google, you will get paid a total compensation of $190,000. So

Ryan Burgess
yeah, so you should expect what I just said.

Matthew Gerstman
Yeah, I pulled that from levels dot FYI. I recommend it focus on what all the big tech companies pay

Stacy London
was that base. That was

Matthew Gerstman
the If

Augustus Yuan
I want to change my answer I yes, you're absolutely correct. I was not thinking that.

Ryan Burgess
Well, I think it is important maybe in the sense that I think it goes back to you need to know what your worth, I think that's really important is like, knowing what new grads are paid. So if we go with a new grad, let's start there is like if you look at what other people are paying new grads, other companies and really understanding and also where you live, because I can depend too. I think it's important to understand that. And then if you feel that it's they're going below that, then yeah, you might want to negotiate your salary even if you're fresh out of school. So I think it depends, but also like there's some good resources. I hate to say it but like sometimes like Glassdoor, I don't know how great it is. It's not the best but it's somewhere to start. Or apps like blind I've actually never used but I hear it's SIM

Matthew Gerstman
card are Terrible. Terrible. Yeah.

Ryan Burgess
But I mean, there's ways to do a little bit of research. Yeah, there.

Matthew Gerstman
There are lots of websites that hosts out Whoa, salaries Glassdoor is a good example levels that FYI is another one. And, you know, it's it's not any one salary that you want to key off of. It's just like you want to look at the general average for where you live and be like, what am I worth based on my skill level?

Ryan Burgess
Yeah. And I think it also you can ask other engineers, I mean, that that sometimes works. Not everyone wants to divulge their salary. But it might help to just ask and be transparent about that and say, like, Oh, I think we're similar skill sets like what are you getting paid? We have same amount of years of experience, etc.

Matthew Gerstman
Yeah, that is, that is definitely a conversation I recommend having with close friends because it will help you negotiate in the future, just knowing what other people around you are getting paid.

Ryan Burgess
Yeah. And also knowing what the companies are paying to because like, it does vary. Like I didn't know Google paid almost 200 k for like a new grad.

Matthew Gerstman
Yeah, so that is, that is total compensation. So the base compensation, cheers, cheers. In that case, it's probably like 110 ish, and then stock and then bonus, and then whatever else they kind of give. So keep in mind that that's That's the total total. And that's also like the top of the ladder for a new grad. Right, right. You're only getting that if you are graduating from a top tier school and you have like just, you know, a four hour and everything, but some new grads somewhere is getting it and I like being technically correct.

Jem Young
Which should be a caveat next to like levels or last or think LinkedIn has one to try to scrape your data about salary information to Nice try LinkedIn. But like these are all self reported. So like, take them with a grain of salt is, they may not be accurate. They're just what some random person is telling you. And there's no way to verify or understate.

Ryan Burgess
That's another one. I've actually seen where I'm like, Well, I think that's kind of low. And it probably is because then you look at it. It's like yeah, it was posted like five years ago. So Glassdoor is kind of why super out of date is always out of date. That's my problem with it.

Augustus Yuan
Yeah, I think there's like, you don't want to be cynical, but you do have to assume that companies do want to get the best deal and like some don't some like legitimately say we're gonna pay You know, top of market, but others are not, and they're trying to, you know, get the best value for their money. So they may not be offering you something that is the right amount for the market. So the whole conversation that we just had about research, hugely important, do that do that research. So like if they do come away under what the market in that area for your number of years of experience, is that you can, you'll know that and then you can come back and say, Hey, I did some research. This is what I found. And you can be very Matter of fact about it. But I think it's very important to negotiate if you're getting offered something that's not fair for where you are in your experience level.

Ryan Burgess
Yeah, so I guess we're saying it depends. Yeah, negotiate. But I think it all comes down to do your research and understand that. I think another way to research or whatever you want to think about is interview with other companies too. And that's hard ask it is I'm gonna say that because interviewing is a lot of work and a lot of time and effort. It's could probably be a full day away from work if you already have a job. And so that's it. It's hard to interview with a lot of places. But that can also help you better understand if you have multiple offers, you can better understand what you should be negotiating with other with the company that you might choose to go with. So the

Matthew Gerstman
last time I was switching jobs, what I did was I've actually done this effectively twice now, but last time is a little sneakier. I told the company that I had a friend visiting from out of town for an entire week, it was like six weeks out. And every company I interviewed with I said, this is the week I'm doing on sites and I just had that week ready and like marked like six weeks to two months out. And then I just scheduled them all and did them all in a week. And you mentioned like getting out of work, like calling in sick is hard. But if you can do if you're like being very methodical about it, you can do something like that. And then like the most of the upfront cost of interviewing is studying. So you do that and then you're just like doing all the interviews in a week and then you go back to work and pray you have an offer by Monday. I like

Ryan Burgess
that. Well, it's not a bad idea. And also you have that line of like I've got to study and be prepared. For a week of interviews,

Matthew Gerstman
yeah, it was really helpful. The other thing is, is that tech companies is a big play when negotiating are just one of those tech companies are full of themselves. And if you pass anyone's interview, they're going to believe that you can pass every other interview you're at, which gives you a dramatic amount of leverage. Because just by the rat, the fact that you're still interviewing, they're just like, Oh, we, they're gonna get an offer elsewhere. So we just need to, we need to close them. Now.

Augustus Yuan
One other comment just about the How important is that thing, negotiate, I would say for people who have put like, particularly been paid lower in the industry based on gender or people of color, that kind of thing. I think it is probably very important for you to really consider negotiating because there tends to be there can be this. You're getting offered lower for no other reason than unconscious bias, or maybe intentionally. So I think it's very important to negotiate or in that respect.

Ryan Burgess
I like He brought that up. I've seen it too or someone's, they their careers just always behind in salary because they did a poor job negotiating off that one first job or a job because then it's always, oh, pay you a little bit more than extra but a little bit more, and you get bumped up each time, but you were already kind of below the market value. Yeah.

Augustus Yuan
And that's that socks. Yeah, some studies I like women don't necessarily maybe always negotiate when they should, and men time to negotiate more often. And so therefore getting more payments and higher salary in general, just because of even the initiative to negotiate. So I do think it's really important. Yeah, and actually, I think, a common reason why some don't negotiate, which is a huge misconception, actually, I think, Matt, you talked about it in your talk, which is a lot of people don't negotiate, negotiate because they feel that Oh, if I negotiate, they're gonna, like revoke the offer. Yeah, we or something. And that's a huge fear, but it's a huge misconception. They will never

Matthew Gerstman
revoke the offer.

Jem Young
So that is not true.

Ryan Burgess
I was just about to file that one. Go ahead. Yeah.

Jem Young
I write I we both have a friend that who's a recruiter at one of the big tech companies, not the one we work for. But she was like, I will absolutely be like, No, we can't do that. And we're gonna take your offer. Because people we have to shed light on why why would this get revoked? So you said it earlier, and you mentioned your talk to leverage, like, it's important to understand how much leverage you have with any given company. So if you're a new grad who graduated from boot camp, and you're in I don't know, Ben for Tennessee, and there's two companies in town, and you're trying to get your first job, you probably don't have that much leverage, like, honestly, you just have to understand like your skill set location, what are the competitors? What are other people going to pay you? You need to understand that if we're going in, so what burns a lot of people is they hear stories like Matthew sells, like, if I work at Google, I'm gonna make 190 that's what I that's what I'm worth, and you try to take that to other tech companies like one they're gonna say no, more than likely to they're gonna say, Who are you we have an entire pool of people to select from we don't need one person who's Trying to like be greedy. And like we just don't need the hassle. Big tech companies have the entire list of people to hire for you. We're not that special. Unfortunately,

Matthew Gerstman
you are right. And if you if you are a new grad and you asked for 200 grand, even at the average place, or three or four, or you were further in your career, and you asked for half a million dollars, that is probably way too much. But what a lot of people get caught up is they get caught up on five or 10, or even $20,000. And 20. Grand is a lot of money to us. But it's not that absurd to a tech company like us for 20 grand more than you're worth from a tech company. And as far as they're concerned, that's just like a high ball that they need to get that they need to go over. Because the fact is, is they as Stacy you mentioned, they want to get the best deal possible. So they are inevitably going to offer less than they want to pay because they expect that they have to go up. So you want to ask for more than you actually think you're worth or more than you actually want. So then when they go down, you get something in the middle and everyone's happy.

Ryan Burgess
I've met him his game, but I think to like to even hit a little bit more on what Jem said, it goes back to my point about researching and understanding that because I think, yeah, if you go in there and you're like, I'm worth half a million dollars, because I saw that on Glassdoor you know that that's not gonna mean that they're like, Okay, well, we're gonna ask you this, they offered you like 100 K, and you come up asking like five times what they've done, you're being extreme. To me, that shows a little bit of immaturity, too. It's like that recruiter from the big tech company might look at that and go, Well, they're like completely off base, and they might not pull the offer immediately. But they might follow up of like, why why what what made you come up with that number? Like we're completely off base. Cheers.

Matthew Gerstman
Cheers. But you just said 100 grand? What if they say 100 grand and you say 120?

Ryan Burgess
That's what I think you're you're you're right there is like, I think it's a smaller percentage of going upward. It's not out of the question, and the company may still come back to you and say, hey, we've 100 is the fair offer. And that's what we're gonna do. At that point, I can't see a company pulling the offer because you asked for 20. k more.

Matthew Gerstman
Right? And that's that's really the point I'm trying to make is I think a lot of people are very uncomfortable asking for not not small amounts of money to us, but small amounts of money to the company. And they're unlikely to pull that offer because you ask for 20 k more. And the worst, that's the worst that'll probably happen in that situation. They say no, we're gonna pay 100. And then you take it or you take another offer. And it really comes down to how much leverage you have. I actually know a real company, where there was a mid level engineer making 80 grand a junior engineer making 90, another mid level engineer making 100, a senior engineer making 120 Don't ask me how I know all this amid making 140 and then a senior making one at all because of negotiation. And this was just a bad place that wanted to take advantage of people.

Augustus Yuan
Yes, actually, actually, to kind of build on maybe vicen. Maybe just to clarify So let's and I think a really good point you mentioned was how much leverage you have like really knowing that and doing research. So let's say I was a new grad, and I did some research, and maybe they maybe say they pay one 100. And they actually give me that they like say, hey, the offer is 100. You know, what do you what do you say? Do you think it's worth negotiating? Like two for 120? Or do you think it's fair? Just Just take it? Like, what would be your recommendation? Ask for 110

Matthew Gerstman
I always think you should ask for a little bit more. Um, I think we're trained by society not to ask for money and to feel like we're asked like we're getting too much, but it's a corporation, the corporations should be paying you for your value. And, like, if you ask for 110, and they offered 100, they're probably going to give you 105. And that's five extra grand you have in your pocket, that's a whole vacation, and you're probably not going to get that raise after that first year. You're like, maybe you're gonna get bumped up to 110 after a year, probably 105. So it's just like, just asking for a little bit is is helpful. The other thing I would say I mentioned that you said, we've all been talking as though the company is the first one that says the number. And that is the ideal situation, that almost never happens. What normally happens is you mentioned a number and the company starts chipping away at it, as opposed to the company mentioning a number and then you can go up from it. So the advice I like to give is, the first number they say is the is the lower bound. The first number you say is the upper bound. So be very mindful of that when you're starting the interview process.

Jem Young
I would say it depends a lot of jobs when you start, they'll give you a range, they'll say they'll they won't tell you what they'll pay. They'll say like, here's a range. I think a lot of people are like, what was the biggest number they said, Okay, that's what I'm gonna get. And they that may not be true, you may not have the experience to be like a level three or something your level two, it's important to know that But to your point, I guess this I don't know if you if you negotiate ahead of time said like, here's what the roll is worth is worth 100 K a year. And you get to the interview and it's all said and done. I would not look kindly on someone. It's like Well, actually, I want 110 because like we agreed in the beginning, like This is what I'm worth.

Matthew Gerstman
That's fair. So I wanna I just misheard what he said, or maybe we heard him differently. What I heard was you get to the end and they give you an offer. And you're like, this is what I thought I was worth. And they gave it to me, but I haven't given them a number yet.

Augustus Yuan
So that that was actually actually that was what I was saying. Okay, so yeah, it is a pretty sensitive and sounds like there's a lot of that a lot to, like, look into, like for, like, what, what, when that negotiation actually happens, you know, you have to be really conscientious of all these things. There's a lot that plays into it. Yeah,

Matthew Gerstman
the other thing I want to know by the way, we're throwing around $100,000 as just like a number

Augustus Yuan
that's not very realistic in some parts of the country

Ryan Burgess
or parts of the world in general. So right so we are the number that

Matthew Gerstman
this group is primarily based out of San Francisco and I live in New York City full time. So in those cities, that is a like a not unheard of number at all to get but in you know if you are in say Florida, which is where I'm originally from, you might get 60 grand and that correct deal there.

Ryan Burgess
One I think okay, and that's really important to call out to is that oftentimes like the Bay Area or New York expensive places to live. That's also why the salaries might be a little bit different in that respect to being a bit higher. If your cost of living is a lot less well, that you might not have the highest salary, which is okay. It's I think, also to Gustus. His question is, if you truly did your research, and you felt confident that the offer that you got is on par with what you think you're worth, maybe it's not worth negotiating. I don't know. Like I'm a little in the camp of Matthew of just saying like, it does, if you haven't really talked through it, it doesn't hurt to ask for a little more. And the reason I say that, too, is because of sometimes how companies up level. And once you've been at a company, it's unfortunate. I've been there many, many times where I've gotten raises because I've jumped to a new company. And that sucks. It's one of the only reasons I've gotten significant bumps and so

Augustus Yuan
yeah, moving companies

Ryan Burgess
because it costs a lot to hire someone to train them to get them like oriented and skilled leveled up, and then yeah, they can go next door. And start fresh and get paid a lot more. And so that negotiating up front is really important.

Matthew Gerstman
Yeah, that's on the company. And if you're at a good place, like I think most of the people in this room are, you're at a company that focuses on growth and focuses on up leveling you and make sure that you're not going to leave when you hit that next skill level. But I know a lot of people who've been taken advantage of by series ABC startups, just because they were you know, they, it it's still a decent chunk of change to the company, but they're still getting taken advantage like those salaries I listed earlier. Those were real people making very different prices, because there were unscrupulous people negotiating with them.

Jem Young
So it's come up few times. We've talked about our nice little keyword there on the the salary, how should we think about stock versus your base salary? Cheers, cheers, cheers, cheers. So it depends. If it's a public company, then considering stock as part of your total compensation is something you Consider if it's a private company, which a lot of them are. Okay, a start up. The way I always say is you can't pay your rent in stock options, the gym,

Ryan Burgess
yes, I might win the lottery, you know, I could become Facebook rich, it could very well happen.

Matthew Gerstman
It is a real lottery ticket. It is literally a lottery ticket and it has only it has slightly better odds. It's interesting you bring this up. I think there's a huge survivorship bias with startups in that you only ever hear about people getting rich off their stock options. You don't hear about people writing off $1,000 on their taxes because they bought their options when they quit and they went to zero

Jem Young
print. Yeah, wait Quick, quick not have a sense around the room. Have you ever talked to a recruiter for a startup who didn't say this is like the hottest newest? We're part of a x billion dollar industry like literally I've heard it a million times over and they're always the next big thing.

Ryan Burgess
Jem, let me pull up my email. Oh yeah. I probably have

Augustus Yuan
series a funding blah, blah, blah.

Ryan Burgess
What about the Wait, what one of my biggest pet peeves is Dell? That one is my biggest pet peeve. We're still startup, we're gonna get funding.

Matthew Gerstman
You know, it's funny. There's a startup that I interviewed at four years ago. And it was mutually just like not a great fit. I actually think that they thought they were going to go on to do good things. And I recently heard from a recruiter, and they were talking about the same startup and that they're still in stealth mode. And I was just like, you haven't started selling a product in four years.

Ryan Burgess
Yeah, cuz stealth mode means that they really haven't shipped a product correct. That's what Yes, stealth mode is.

Augustus Yuan
I think research is like super important, whether it's a startup or even like a normal company actually have like a random story. Like when I was considering an internship at Evernote, I actually got an offer from Oracle I got invited to like, speak with grooveshark. And this was like they like and so I had a great conversation with them. The team sounded So it sounded like they were gonna pay really well, even though they were based in Florida, but I did like the math and actually I want to like re, like, restate what Ryan and everyone has said, like, really look at the location and the living expense because what matters is what you're taking home. Right? Like, come back, do the math. It makes a difference. So I didn't. I lived and I went to school in Gainesville, Florida, and my rent was $400 a month.

Matthew Gerstman
Wow, I pay a lot more now. Sorry, continue. Yeah,

Augustus Yuan
but anyways, yeah, so I was super stoked, but then I did some research, they had a lot of lawsuits. I thought it was really risky. Um, I also didn't necessarily want to go to Florida and then I wouldn't either to two years to a few years later if you don't know grooveshark went out of business and that's a really scary position to be in and that can happen anywhere but I think definitely you you did the research and started to really look at it and go Hmm, might not be that worthwhile.

Jem Young
I I've been lucky. But I've never once turned out an offer from a company that later I'm like, Oh man, I really missed the boat on that one is never happened, but I could be lucky but the other happening like Matthew said, it's a lottery ticket. It's, it's so remote that we always think Google, Facebook, Twitter, the big companies, but again, how many big companies are there? You could probably put them on one hand. The thing

Matthew Gerstman
is it's survivorship bias. So this week, I saw a tweet trending that someone rejected a Instagram offer in 2011. But it's just like, somebody had to reject an Instagram offer in 2011. But there were probably 1000 other offers that were rejected from companies that no longer exist.

Ryan Burgess
Yeah, I mean, I wish I bought Amazon stock when, what, 10 years ago, like, I mean, it's Yeah, you can't look at that you can't see. Because who knows at the time of your life, that might have been the right call not to take that job? Who knows? Right? Like it might not have been the right fit for you at that time.

Matthew Gerstman
Yeah, so Augustus mentioned something that I thought was really interesting was moving somewhere for a job. And so years and years ago, it was actually it was at the Empire. JSU spoke at there was, I'm putting a gym, there was a talk just About like being a good empathetic software engineer. And one of the lines that I remember from this talk was, there is no magical Tech City. And I thought that was really interesting because that, like, I had recently moved to New York, which is where I wanted to live. And that was the right place for me. But it's not the right place for everyone. So you don't need to live in the big Tech City. But maybe don't move somewhere for a job if there isn't any fall back in that area. So for example, Gainesville, Florida, there were no other companies other than grooveshark. So when grooveshark went under, you would have been in trouble but if you move to, you know, a more urban area that has many many tech companies, then it's like, okay, it goes under but you can find another job pretty quickly.

Ryan Burgess
And luckily right now software engineering is pretty in demand. Yeah. Which is nice. But yeah, that's I like that too, is that if you go to a place where that one startup or company is, that can be tough.

Matthew Gerstman
Yeah, I one piece of advice I just have for everyone live wherever you want to live. There is nothing worse than hating the place that you live. Just trust me on that. And where

Ryan Burgess
did you hate living? where we are right now?

Jem Young
San Francisco, everyone.

Matthew Gerstman
You know, it's funny. Here's just a funny thing about New York tech. Everyone who works in tech in New York can tell you why they decided not to live in the Bay Area.

Jem Young
I've lived in both places. So yeah,

Ryan Burgess
it's gonna sound like

Jem Young
Jem moved out to the Bay Area. That's a different episode. We've talked about that. Oh,

Matthew Gerstman
yeah, but so anyway, that anyway, the only the only point to that was live in a place that makes you happy. Don't live somewhere for a job, otherwise, you're just going to be miserable.

Ryan Burgess
That's I think that's a fair point.

Augustus Yuan
Yeah. Your happiness is invaluable. Sure.

Matthew Gerstman
Yeah. In fact, that's really what we're optimizing for years. So like we're talking about asking for more money. And this is actually a quote from my grandmother which is that money doesn't buy you happiness, but money does buy you comfort. So money pays for your rent, it pays for your food it pays for you know, your your kids, your kids tuition and whatever. But it's it's not gonna like it just makes you comfortable and then gives you that baseline, but having infinitely more money will not make you infinitely happier. You might have the most expensive divorce ever.

Jem Young
Yeah, face. So back to our question 10 minutes ago about stock versus salary. Again, if it's a public company, you can actually take that stock and sell it for actual money. Then cool that consider that part of your compensation. If you can't, you can get an offer for, I don't know, $50,000 in Oakland, and a million dollars in stock options, and my job's over four years and my new cell startup, cool. You can't pay your rent in stock options. How long did it take Dropbox to go public? 11 years? 11 years? Yeah. So imagine you're like, yeah, I've got all the stock options. However you still to live a life have a maybe get married, maybe have kids maybe go on vacation, and you can't do that with stock options. Yeah,

Matthew Gerstman
so a lot of people at some unicorns right now on most notably, Uber are experiencing what's called golden handcuffs. Thank you for bringing that

Augustus Yuan
up, where

Matthew Gerstman
you have millions of dollars in options that will expire. If you leave You need to buy them. And the tax situation is so ridiculous that you will be buying them and the government will claim that you have made millions of dollars when you cannot liquidate it. So you're just stuck at a job because you cannot leave because your options will expire, right? And

Ryan Burgess
the options expire over so many years, typically. But you're right is you also have to pay the tax. And that's the expensive part when it's really not worth anything.

Matthew Gerstman
Right. So just to explain, if you are buying so options have the option to buy shares at the price they were at when you join. So if you get 10 options at odd $1 each, and those options are now worth $100 each, you spend $10 to get your 10 shares, which are now worth $1,000. And you need to spend about $990 in tax in you need to pay taxes on that money as though you made it regardless of if you can sell the shares.

Ryan Burgess
It's weird too, because yeah, then people are like well, avoiding the pay that I'll just keep working here. And unfortunately sometimes people aren't happy in those jobs, but they stick it out because they're that's what the golden handcuffs are really what that refers to.

Augustus Yuan
Yeah, actually related to stocks. Do you want to by chance go over what's the difference between like options and rscs restricted stock units? Because I know a lot of companies will offer RSU especially the small companies over option or maybe even big companies even.

Ryan Burgess
Yeah, even Yeah, even like public companies, right. Yeah. Lessons public. So yeah, even public companies will do that as well. So it's not just the small companies or startups

Matthew Gerstman
that that give RSUs Yeah.

Jem Young
Okay. Other companies do

Matthew Gerstman
yeah, I'm gonna be gone. So options are like I said, the option to buy a share is how I like to remember it, and in rst was an actual share. So let's say it's worth $10 a share. They are giving you the shares regardless of if they can be liquid. Now, most companies, if they're giving you Rs use will probably do something like withhold a certain amount to pay the taxes on your behalf. So you won't end up In this weird tax situation, but if you get rscs you get shares that are theoretically worth something and you never have to pay for. If you get options you theoretically have to buy them when you you know, theoretically you do have to buy them when you want to sell them, or you could choose not to buy them I guess so are you

Jem Young
going on the table? Say Nope, there isn't so old, old gem, knowledge gem, young gem all our C's are absolutely better because instead of having to pay for something, they're just giving it to me. Yeah, our seas are restricted stock units. However, when they give you our shoes, the company may not be liquid like you can't sell those for any money. You're still stuck in whatever Series B whatever you're like cool for a million dollars with RCS. You do owe taxes on RCS because to the IRS that is money. Even though you can't do anything with it. You still have made a million dollars in rfqs. And that is a danger especially you can end up owing so much in taxes and then the company goes under and then all those taxes you paid are just gone. You can deduct them from capital losses. But you can only deduct, like 3000 years, something like that. Yeah, so this actually, this was a big thing during the.com bubble. And the government just I think was a alone employees, they just had to straight up bail them out. They just had to, like make exceptions to all the rules for them because so many people bought their options and they couldn't liquidate them and they were just in so much trouble. So that that is it's important to understand like if the company is offering you rfqs, or options understand the tax implications of that. Is the company going to go public? Or can I do something with my RS use in the future? options are great you have to pay money on them however, you have the option of buying them If not, you can just walk away and say like, Brian stealth, autonomous dog walking service is never gonna make money. It's absolutely I do not want anything to do with it. It's not gonna cost me money.

Augustus Yuan
Don't tell everyone to sell.

Jem Young
Oh, yeah, to sell sorry. But it's something to consider. But I like to think of when you talk about total compensation again, What can you pay your rent? And because that at the end of the day is can I put in my 401k? Can I go on vacation with it?

Matthew Gerstman
It all comes out of your base base.

Ryan Burgess
Sorry, you know, we've talked about salary and we've talked about stock options. And we've kind of talked about divulging salary maybe or providing that to other engineers to help them you know, understand what they're worth. Should you in an interview, divulge your salary that you're currently making? And this is interesting. In California, it is actually illegal for companies to ask you what your salary is. It is also illegal in New York City. I did not know that. It's recent. Just New York City or like New York State. I

Matthew Gerstman
believe it's New York City, but I'm not alone. Okay. All right.

Augustus Yuan
Fair. But, but I'm interested like, should you divulge your, your, what you're currently making? I'm working at Company A and I want to join Company B. and Company B is like, well, what are you currently making? Should you divulge that? It's really complicated. So, in many past jobs I have been not necessarily I don't know if naive is the right word, but I'm like, No, that's a fair, fair question. They want to understand like, what's a fair compensation for a Mac currently, and I would divulge it. And now looking back at that, and then looking back at the history of pay for women in this industry, it's not cool that I divulged that I, whether or not I maybe I was getting paid fairly for market at that time. But I shouldn't have done that. It should have been more of like, here's the range that I'm looking to be at, based on my research for this market and this job and my level. Because if you start off low, and you continue to be paid low, you know they're gonna base it off you being below market and it was the cycle will continue. Cheers. Cheers. Cheers. I just want to really build on that this is actually why like the law that in California where you're not, recruiters aren't allowed to ask you this is called the Equal Pay Act and said address this thing Exactly. Because people who were getting paid less than what they are worth, they would be in the cycle of always being constantly being paid less than what the market is.

Matthew Gerstman
Yeah. So, earlier I mentioned that whatever number you say is an immediate lower bound. And that's important because a lot of the time, at the very beginning of the interview, the recruit before you've even done a technical interview, the recruiter will say to you, so how much are you making? or How much do you want? And maybe you'll say, I want $100,000. And then after you pass your first technical interview, which you know, you're feeling kind of shaky about because we all feel shaky after

Augustus Yuan
interviews. Thank you. Yes, maybe the word is throw up.

Matthew Gerstman
Yes. Anyway, so anyway, when you're feeling that way, and then the recruiter comes back and says you wanted 95, right? They can keep chipping away throughout the process. So I actually have some magic words that feel awkward, but you just need to practice them in a mirror and repeat them for me. And those are, let's wait to discuss comp until we decide if this is a Good fit chairs.

Jem Young
That is that is good advice.

Matthew Gerstman
So I'm going to repeat those words for you. Let's wait to discuss comp until we decide if this is a good fit. Because that way, you're just saying, we want to wait until we see when this interview was over. And then also you can change how much you ask or based on how well you think you did. If you can tell, they really want you you can ask for more money. If you're like, Oh my god, I need to get this job. You can ask for less because like you think that's what you need. So it's good to it's if you can get them in a situation to say the first number. You're golden. I think

Ryan Burgess
that's fair. And also I think of Stacey and I've moved to the Bay Area, actually, a bunch of us have moved to the Bay Area. And obviously, when I was talking salary, I wasn't really aware I'm in a different city or Look, I was in a different country. And that may differ, right? Like what I'm getting paid is not going to reflect the same as what the Bay Area is. And so I think of it and this is actually something I said When I was negotiating and talking through that, it was more I think I got asked like what my expectations were. And I put that a bit back on them and said, I'm also looking to you is I'm new to this area. And I'm looking to see like, what what is the range? So you're putting it back on them to ask them that as well put that on them to say, Well, this is typically what we pay, or at least get some sort of numbers out of them first, going back to your point, Matthew.

Matthew Gerstman
Yeah. And it's also really important to remember that negotiations are not symmetrical. So you do this once every two to five years. They do this once every two to five days. Oh, yeah. So they they are much more practice to this. They know all the magic words to say to make you feel uncomfortable and get you to spit out a number quickly. So like Ryan just said, you want to put the onus on them. I also

Ryan Burgess
believe that not all companies are evil. I do like I don't think they're all out to screw you over and like lowball you. But I think you need to, you need to build that rapport with them and understand are they doing this? Ask me my You know what expectations are, what my salary is? Are they doing that to lowball me? Or is what are they doing with that information? Yeah,

Matthew Gerstman
and I'll and to be, to be fair to your point, if I kind of worth saying that if the company is trying to screw you out of salary, they probably don't care very much about you in general. But it's hard to know that when you're earlier in your career, I have certainly worked in more toxic environments than others. And those places did not pay as well or at least did not pay as fairly as others.

Jem Young
I think, overall in echoing what everybody says is, yeah, don't give free information. If you don't have to, if there's no benefit to you, then information is worth something. But above all, like it doesn't matter how from the recruiters how friendly the hiring manager is how friendly the CEO, they may call you on the phone. Like she may say, like, Oh, we really want you we got to have you here, but our budgets tight and all these things. That's cool, like understand where they're coming from, but also understand, they're not your friend. It is a business if it came down to you liquidating the business and the CEO has become a billionaire. They will do it and like send all of you on the street. I don't want to be mean about it. But like, all this, I've been in enough startups where it's like, we're family, we're cool. And it's like, you're not family, it's a business treat it like like that. They're not gonna pay your rent, if you get fired or they're underpaying you. It's just, you have to be kind of more aggressive about it.

Augustus Yuan
Yeah, here's, here's another like little story or scenario where if you divulge, like what you're currently making, let's say it's part of a relocation. So let's say you're relocating to a different city, different costs of living. If you devolves, let's say what you're making currently in a different area. And then they come very low for like the cost of living adjustment for the city that you're relocating to. And you say and you come back to them and you say, listen, like that doesn't necessarily cover the cost of living adjustment. From from my perspective, based on like all this research I've done, they could come back to you and say like, Oh, we don't take cost of living adjustments into account when we do relocations was all market based, blah, blah blah. That's the Danger you get into because what you've now painted yourself into a little bit of a hole where they're basing what they're offering on what you've told them, as opposed to, they'll say it's market but if you don't do the research, you can say Actually no, the markets actually higher. And now they're going to come back to you saying like, we don't do cost of living adjustment. So that's a danger of like divulging too soon. So that's like another reason to not do that.

Ryan Burgess
Which that's really not market either. What they said if Yeah, they're saying, that's it.

Stacy London
Yeah. It's a word Smithy

Jem Young
and to echo what you're saying, say See, it's like look up wherever you're moving. If you're going to relocate to another city, look up how much the median like studio one bedroom apartment is. So what you're comfortable to, I think that's

Ryan Burgess
like, because you might have a family. That's a big thing, too, is like, the studio ain't gonna cut that. Like you're not living with kids in a studio apartment. And so yeah, you have to look at like, what am I going to be able to live comfortably and pay and what are you paying my salary? You know, it's funny. This is outside of tech. I was talking to my sister who is a teacher, and she lives in trial, she should be paid much more. I

Matthew Gerstman
yes, I agree. Totally agree to that.

Augustus Yuan
Yes, baby.

Matthew Gerstman
Cheers. Cheers. So anyway, we were we were discussing, you know, where she was going to live her her husband's a doctor, so he gets paid or will get paid. He's in med school and where they were going to live when he's in residency. And she mentioned Well, I found out that teachers get paid this much in New York City. And she's like, and she's like, so maybe that'll be good when we're first having kids. And I was like, Oh, no, no, no. Do you know how much childcare costs in New York City that's gonna cost more than your rent, like you might as well not even work? So you mentioned having a family like that, like it can be much more expensive in some places than others?

Ryan Burgess
Yep. No, I think it's always all those things has to be considered when you're thinking

Jem Young
and that's something earlier me I wish I would have known and thought about cost of living. Like 100,000. We thought around casually, but in San Francisco, that's not that much. The medium one bedroom is about 3100 So and then also figure your tax bracket is going to move people don't ever account for that. So your take home pay is gonna be like 70. So half of that already is to rent.

Matthew Gerstman
Yeah. And not only is our Yeah, not only is your tax bracket going to change from your increase in salary, it's also going to change based on where you are. So Florida has no state income tax. New York and San Francisco have state and I believe city taxes New York does not okay, so not only

Jem Young
why they don't they should New York

Matthew Gerstman
has a city tax that's like 3% of or something, but like it's not negligible.

Ryan Burgess
Alright, before we jump into pics, I feel like we need we've covered a lot of great information. What's one piece of advice you would give someone who's right in the middle of negotiating on offer with a new company, or even just negotiating a bump in their pay for Hey, they've been at the company for a couple years or whatever, and they're, they're negotiating? What's one piece of advice that we can all leave them like, what would you say to that person?

Jem Young
Ah, sometimes so let's say you you interviewed a company and you love them. You love the team. This is like something you're passionate about. It's an area you're passionate about the comp isn't quite where you want it to base salary is one thing sometimes years. Sometimes a lot of startups they like they just can't move the like we have space for 10 engineers at this price and we just can't afford to pay you double. We say okay, they're flexible in other things such as vacation time whatever they like more stock options, take those what you will starting location relocation bonuses starting bonuses, yearly bonuses, sometimes they can move on those or they can't move on salary because of weird company politics. And it's important to think of that when you're discussing your total compensation.

Augustus Yuan
Yeah, like do do a budget and have a budget spreadsheet or a tool whatever you use to understand what what it what you need for your kind of like, your base life. Like do you like to travel a lot, whatever, figure that out and then base everything else around that and if it like the maybe the salary isn't three times as high as you want it to be? But it's still plenty for you to still do the things that matter to you. Maybe those other values are weighted more. So do a weighted spreadsheet. This is the thing I mentioned this one time before on the on the show, and it was like have have a spreadsheet that has things that you value, and then put weights next to them. And salary maybe isn't the most important thing on that spreadsheet. Maybe it's work life balance, being able to go home at a normal time every night, that that might be super important. And maybe you're willing to sacrifice 10 k per year because you can do that. And it's not always just about salary. Yeah, I want to echo everything. I also want to jump back to a point Matthew, right, which is that recruiters do this every day. And so you are at a huge disadvantage talking to the recruiter on the phone. And that is probably what they're going to try to get you to do. They want you to negotiate right then and there. And it's a really good idea for you to try to move that conversation to email or try to push it off like don't under estimate that also really practice, like, even get a friend practice some questions that a recruiter might ask you, like, Oh, hey, what is your salary expectation for this job? Just, it really helps to practice like when you get that question how you're going to respond, like having a strong voice, and like being able to like practice and negotiate, negotiate, it really makes a big difference. Negotiating is obviously huge. And

Matthew Gerstman
the thing that gives you the ability to negotiate this is really my final thing is get leverage somehow, whether that is a second offer, which is really the best kind of leverage because then they know you can go somewhere else. Or I said this earlier, if you're still interviewing, the tech company is going to assume that you can pass elsewhere. So just keep interviewing or keep saying you're interviewing while you're negotiating. And then even if the company isn't going to move on salary, ask them to move on something else and then maybe they'll move on that or maybe it will throw more money at you to shut you up like but but just know that they're playing a game and you need to play it to all great advice.

Ryan Burgess
All right, well, let's jump into picks. In each episode of our podcast, we'd like to choose things that we want to share with our listeners that we found interesting. They might pertain to salary, but they might not. So let's go around the table and share our picks for today's episode. Augustus. You want to start it off.

Augustus Yuan
Yeah, sure. So I have two picks. One is salary negotiation related other than Matthews talk. Another really great resource that I found is a site called fearless salary. negotiation.com. It's a service and I can't speak to the service. I think there's like something you can pay and someone will train you or you can get some videos, but they have a lot of like really good articles of like, even like email templates, or how you like why you should negotiate and getting into that mindset of like really understanding that, hey, like, this is why you should negotiate. No, they're not going to revoke your offer all these great things, so highly recommend. My second pick is this thing called Project alias. It's a pretty cool thing. And I think it's pretty clever. So privacy for like smart home devices like Google Home and Alexa. It's really, really kind of scary that they're always listening to you. And I think this is like a really clever device, what it does is you put it on top of your Smart Home device, and it will generate this white noise that will constantly feed it, so it can't hear what you're saying. And that project alias kind of device has a trigger word that you say so you could say, alias or Bob or something. And then it will start it'll let the Smart Home device like start listening to you. And I think it's like super clever if they call it like a parasite virus kind of thing. And it'll actually if you look at it, it looks like this like gunk mushroom that you put on top of your google home or Alexa. I don't know if it's actually for sale, but I love it.

Matthew Gerstman
I can't believe society has come to that.

Augustus Yuan
I it's I thought it was it might maybe it should be

Matthew Gerstman
all your base are belong. Yeah.

Ryan Burgess
Cheers. Cheers. All right, Stacy. What do you have for us?

Augustus Yuan
I don't have any right events, picks related to salary stuff although someone mentioned levels that FYI I think that one's an interesting one. I have two picks to music picks. The first one is second World by hv ob. This is an Australian or Austrian rather electronic duo. I just saw them recently in San Francisco is really great. hv ob stands for her voice over boys. They kind of focus on restrained and minimalist electronica. It's really great and very beautiful, kind of an epic build up. The second pick is Phaedra. And I'm not sure if I'm pronouncing that correct, but it's a 1995 remaster by a Tangerine Dream. It's a bunch of cynthy cynthy goodness from 1974 it's actually their German electronic group and they formed a long time ago. 1967 Yeah, this song was featured in Netflix's sort of interactive and venture bandersnatch. They're incredibly influential. They're kind of considered like pioneers of electronica. It's really great sort of synth the old school song. So I think you'll appreciate that while you're trying to cut. So Jem,

Ryan Burgess
what do you have for us today? Thank you, Ryan.

Jem Young
I have two picks today. The first pick is from logo lounge, which is a fantastic site. And every year they do a 2018 logo trends, which are they do a logo trends from the year. And it's just fascinating because you, you only see one logo, so like, you'll see an Airbnb rebrand or who ran slack slack? Oh, don't get me started on that one. Ah, the slack rebrand and you're like, oh, wow, that's so new and original and innovative. But when you see logo lands on there, recap of all the logos for the year, you see, actually, most logos are derivative, and they're all like, they're categorized in these clusters. You're like, Oh, actually, that wasn't that original. Not that these new logos are good or bad. But it's interesting to see the context and it's interesting to see the web, like evolve. It's fun to go back. See how logos have changed over the years? And you're like, oh, wow, I've never considered that this was the thing. And like designers are always thinking about things like this. Like you probably don't even pay attention, right? No, but designers do. My second pick actually is related to this talk for once. It's hired calm. I used them before in New York. And you know, this isn't an endorsement necessarily of their service. But services like that are good because you submit your application. Companies kind of bid on you in a way they say, Hey, here's kind of what we're offering in the general range. And it's good to see a lot of different companies from like, Siri sees the the angel funded startups. And mostly you get a good sense of what you're worth and what other companies are interested in talking to you. And that's just like, if you can't find any other information, it's good to have a baseline and it's a pretty good baseline. It doesn't cost you anything.

Ryan Burgess
Very cool. Matthew, what do you have for us,

Matthew Gerstman
so I'm going to go completely unrelated because how often do you get to submit pics to front end happy hour or was not when you don't live in San Francisco. So I am a big fan of theater Broadway on Broadway Off Broadway, etc. I live in New York City, I probably saw something somewhere between 40 and 50 shows last year. So I'm going to tell you about two things that you probably haven't heard of yet. The first one is called be more chill. It is going to be the big hit musical in 2019. It's really cool. It's a it's about a high schooler who takes a pill that implants a robot in your brain that tells you what to do. So you can be cool. Sounds amazing. It's amazing. And like four years ago, it was in New Jersey and they record it and off off Broadway soundtrack and then that trended so much and went off Broadway and now it's going on Broadway. I have tickets to see it three times because this is me. And I'm very excited. So be more chill. You should check it out. Listen to it on Spotify or whatever you use. The second one is puffs the play. So I am a big Harry Potter fan. I mentioned that I'm a slither and this is a Off Broadway Production about the puffs the least popular house in the Harry Potter universe. It is very, very funny. And they recorded the whole thing so you can watch it on Amazon. I have seen this show something like 10 times I love it so much. It is so funny. If you're in New York see it live if you're not in New York, go buy it on any streaming service. Netflix pick up the rights to it, please. So be more chill and puffs

Ryan Burgess
are my picks. Wow, these are some good picks. I'm definitely gonna have to follow which honestly, I'm gonna keep this one on topic. It's come up a few times in our episode, but Matthew gives an amazing talk on negotiating salary. Matthew, what's the title to this talk

Matthew Gerstman
double your salary with this one simple trick

Ryan Burgess
like love the buzzwords there and just like clickbait. Yes,

Matthew Gerstman
there was a nine year old in the audience and I did agree to double his allowance which was $9 So did you give him just like hand that out of your pocket or what I talked to his dad about it.

Ryan Burgess
So I Highly recommend going to watch it. We covered some really interesting things on the episode. But I honestly think there's a lot of really amazing advice in that talk. It's like pretty quick talk to it. Yeah,

Matthew Gerstman
it's like it's like 22 minutes ish. I, there's a lot of gifts. I'm stupid when I'm in front of people. So enjoy that.

Ryan Burgess
It's a good talk. So I highly recommend going check that out, we'll add the link in the show notes. Another thing that I found was a good article that actually Harry shared it with me. So Harry wolf featured this one on engineering management. It really talks about like getting into engineering management. And but it also talks about once you're in engineering, like as an engineering manager, do you climb the ladder? Or do you just stay as an engineering manager and it talks about the pros and cons? The article outlines a lot of really good advice on becoming a manager or if you even want to be doing that, so I highly recommend checking that article out as well. Before we end the episode, I want to thank Matthew for joining us. Where can people get in touch with you?

Matthew Gerstman
Sure, so you can find me on my Twitter Matthew gerstmann My name is difficult to spell but you'll find it in writing on the website. Not that hard though. No one spells it right. You can also find me on my website, Matthew grossman.com. I have a blog there where I post just all sorts of their theater reviews and in depth tech articles. This is who I am. And you can also listen to me on the console blog. Every week we put out a episode about that week's front end news. So it is a nice easy way to keep up with what's going on in the front end world

Ryan Burgess
right on and thank you all for listening today's episode, make sure to subscribe to front end happier podcasts on whatever you like to listen to podcasts on. And you can follow us on Twitter at front end. Ah, so we talked about we should ask engineers what we get paid and that's really helpful. Jem, what are you currently making?

Jem Young
Uh, I make dollars with a red Lambo and a beach house in Texas. Right on Matthew.

Matthew Gerstman
I get paid purely in house points and the Harry Potter system. I got this. Oh well. I'm making

Ryan Burgess
Stacy how much you getting paid?

Stacy London
Beep, dollars, a month. A month.

Augustus Yuan
Wow.

Stacy London
And also hopes and dreams. I get paid in hopes and dreams.