The $400,000 Engineer

The high end was a $550K salary, $100K in cash bonus and $200K in stocks, so about $850K per year. 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.

IT World, 2014

• Real estate in the town I’m living in part time has doubled in the past 2 years. 2x in 2 years.
• A home I rented for $2,000 per month in Palo Alto 20 years ago now rents for $14,000. 7x increase.
• A house I owned 30 years ago in Portland Oregon has only tripled in value. 3x in 30 years? That’s weak.
• Average salaries for software engineers have increased less than 2x in the past 25 years.
• You need to make $506,000 annually to be in the top 1%, about $180,000 to be in the top 10%. To be in the bottom 1% you make less than $2,500 per year.

The Exalted Engineer

A top level software developer / architect can earn over $200,000 in base salary in a big city. This is before bonuses and stock options, upsides that can take compensation over $400,000 per year. At Google or Facebook, the base income can be even higher.

I recently launched a career advice and placement site for top level software professionals, specifically Java EE and Adobe AEM engineering professionals. The goal is to help these and all software developers at all levels to understand, plan, navigate and optimize their careers as opposed to just taking new opportunities one position at a time.

So I’ve started to study the incomes of professionals that feel they are already optimizing their compensation and employment experience. In most cases they’re not. One of the most interesting observations to me is that salaries have not really increased much in the past 25 years, not even 2x.

I’ve recently asked several of my non-developer colleagues what they make per year in income. Most of these people have their own companies or professional practice — attorneys, agency owners, doctors, real estate brokers etc. Some are executives at larger startups. I mostly avoided small startup founders because they’re under-salaried. The short answer is that income is quite variable and unstable in most jobs unless you’re in the US Senate — they make over $400,000 per year easily, but that’s a different article.

I’ve focused a lot of the study on engineers in New York, L.A., San Francisco, Silicon Valley. Big expensive cities where everything costs more and where costs have multiplied in the past decade while average incomes have not.

I want to know what a “high end” annual income is, something beyond the range of $80,000 to $199,000 that most successful professional engineers find themselves within for their entire careers. The lifestyle a long term high steady income affords is in many ways better than the one that the variable (and riskier) spikes in income that comes from cashing in stock options will give you.

Yes, the magic threshold of a “six figure salary”, something that many people never see, but as more and more reach this goal they realize that it’s not so magical unless they continue their former low cost lifestyle. $100,000 isn’t so much anymore?? So what is a great income now? One that makes you smile, allows you to take your family to Aruba every year? One that let’s you buy a new Ferrari? A new $4,000 mountain bike?

A friend of mine, a successful attorney answered this way, ”I could be a professor, but it only pays in the low 100s.” He makes $300,000 in a good year. $100,000 puts you in the top 18%, but still doesn’t go very far in the big cities mentioned above. It’s about $65,000 after taxes, or $5,000 per month. Theatre tickets in Manhattan are now from $100 to over $2,000 per person. A gourmet meal for 2 in San Francisco can be over $1,000. NFL tickets go for $400 each in Los Angeles.

If $100,000 isn’t enough, what is?

Based on all that, I came up with the number $400,00. Nice number, right? It’s more than you “normally” hear, but not the millions that some Silicon Valley ties brag about. Its more than the typical high end salary for top tech executives or software architects.

Are you a qualified successful software engineer making $400,00 per year? If not, you need to make some changes and plan your career properly.