Does Finance pay Software Engineers more than Tech does? Comparing the salaries of Software Engineers at Google vs. “the Google of Finance”
Two Sigma, a quantitative hedge fund based in New York, is colloquially known as “the Google of Finance” because of its startup-like culture and offices. With the Finance and Technology industries increasingly competing for the same Software Engineering, how does the pay compare?
Google Software Engineer salaries and total compensation
Let’s look at Software Engineers at Google first. While their median base salary is $142,000 and total compensation is $243,000, pay varies a lot based on career level and years of experience.
Breaking out pay by years of experience / level
For example, using the years of experience filter on the Salary Project’s page for Google Software Engineers, if you’re an entry level Software Engineer at Google with 0–2 years of experience (most are leveled at L3 in this case), the median salary is about $127,000 and median total compensation is about $189,000.
We also see that if you have 5 or more years of experience in the industry (usually levels L4, L5, L6, or higher), the median salary jumps up to $171,000, total compensation $310,000 at Google, for Software Engineers.
Below is the full picture of what the base salary ranges look like, by level (using the self-reported data that the Salary Project has).
Breaking out additional compensation
When it comes to additional compensation like annual bonuses and stock RSU grants, the amount that Google Software Engineers earn also depends a lot on level and years of experience.
For entry-level Software Engineers with 0–2 years of experience, the median annual bonus is $19,000 and median stock RSU grant value (annualized) is $35,000.
For experienced Software Engineers with 5 or more years of experience, the median annual bonus jumps up to $32,000 and median stock RSU grant value (annualized) triples, to $105,000.
Two Sigma Software Engineer salaries and total compensation
How does the pay of Software Engineers at Two Sigma differ?
There are only a handful of submissions on the Salary Project so far for Software Engineers at Two Sigma, but we can still see trends in the data. The median base salary is $170,000 and total compensation is $275,000, about 20% and 13% higher than the two median numbers for Google Software Engineers, respectively. Pay of course varies depending on career level and years of experience so let’s look at that next!
Breaking out pay by years of experience / level
For Software Engineers at Two Sigma with 0–2 years of experience, it looks like base salary is about $145,000-$150,00, and total compensation is about $200,000, which are about 15% and 6% higher, respectively, than those two numbers for a Software Engineer at Google with a similar experience level.
Software Engineers at Two Sigma with 5 or more years of experience have a median base salary of $210,000, total compensation of $407,000. These numbers are roughly 20% and 30% higher than the corresponding median numbers for Google Software Engineers, respectively.
So, for both entry level and experienced Software Engineers, Two Sigma seems to pay a decent amount more than Google.
Breaking out additional compensation
When we break out the additional compensation for Two Sigma Engineers, we see something interesting.
All of the reported additional compensation is an annual bonus. All the Two Sigma submissions on the Salary Project put $0 as the value of the stock RSU or option grants. Two Sigma is a private company, so any stock that employees do get is hard to value, or the $0 values could mean that employees don’t get any stock at Two Sigma.
For entry level (0–2 years of experience) Software Engineers at Two Sigma, the annual bonus is about $40,000 — $60,000.
Experienced (5+ years of experience) Software Engineers at Two Sigma can earn an annual bonus ranging from $100,000 to a whopping $240,000.
What’s the verdict?
Does Finance pay better than Tech? Maybe: we only compared one top hedge fund to one top tech company. The real answer, of course, depends on a lot of other factors too, like the location, the specific role, etc. Also, with investment and trading firms like Two Sigma, annual bonuses are often tied to the performance of the company’s trades and investments: so in down years, employees likely get a smaller bonus than in up years. Another thing to consider is that Google gives stock grants, which grow in value over time. Right now though, Two Sigma seems to generally pay a little better than Google does for Software Engineers.
You can do a similar comparison looking at the Salary Project’s data for Facebook Software Engineers. Or take a look at this analysis on the salaries across Facebook, Google, and Microsoft. But it makes sense that more quantitative and programmatic finance and investment firms, like Two Sigma, are competing for the same Software Engineers that consider working for top tech companies, and vice versa.
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This is also a post on the Salary Project blog, and is powered by anonymous salary data contributions from people like you!
