If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view will be on a level playing field with everyone else's: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
I'm sorry for any trouble I caused here. I have no affiliation with the company, but just came across this company/its post and thought "Interesting! I wonder what HN readers will think."
Not your fault -- the title you put on it wasn't unreasonable, it's just that tensions are running high and there is a tremendous amount of mistrust out there. I think dang's guidance is really good in general: by using the title on the piece, you let the piece speak for itself. And there's definitely a reason I didn't title the piece this way!
That's a really interesting observation. I was trying to figure out when the tenor of the comments was so hot (especially relative to the two previous times this piece has been discussed on HN), and it didn't occur to me the title may very well have played a role -- but on reading the comments here (and especially, the fixation on the number), that makes a lot of sense. Thanks for burying the thread; there was more heat than light on this one for sure!
Oh yes! - that's a whole other level to this. pg figured that out 15+ years ago*:
If the title contains a gratuitous number or number + adjective, we'd appreciate it if you'd crop it. E.g. translate "10 Ways To Do X" to "How To Do X," and "14 Amazing Ys" to "Ys." Exception: when the number is meaningful, e.g. "The 5 Platonic Solids." - https://news.ycombinator.com/newsguidelines.html
Excessive specificity has almost a hypnotic effect on the mind, and group effects compound that.
Thanks for explaining! For future reference: would it have been OK if the post had the same title, but I left the URL box empty and placed the URL in the Text box along with a few sentences for context?
Good question! The answer is no—text posts are actually penalized to prevent that scenario—they're downweighted by default, and don't have live links by default. From the FAQ: https://news.ycombinator.com/newsfaq.html:
Q: How do I make a link in a text submission?
A: You can't. This is to prevent people from submitting a link with their comments in a privileged position at the top of the page. If you want to submit a link with comments, just submit it, then add a regular comment.
On HN, the idea is that submitters shouldn't have any special right to frame the story for others. They're welcome to express their opinion, of course, but it should be done in a comment, because then it's on a level playing field with everyone else's opinion.
> The truth is that companies pay people less in other geographies for a simple reason: because they can. We at Oxide just don’t agree with this; we pay people the same regardless of where they pick up their mail.
So, look. I completely agree with this, and it’s an admirable ideal. If I were in a position to make this kind of decision, I’d make the same decision or one that looks a lot like it.
But if you’re anticipating counter-arguments, this glosses over a pretty important one. Regardless of geography, higher income brackets tend to have outsized influence on prices across all income brackets in that region. The more it deviates from the median, the more it distorts local pricing. All of this “rising tide” might eventually “lift boats”, but it depends where all that new capital is flowing and even in the best cases it doesn’t keep up with price inflation.
For a small company, that impact is pretty minimal and the rest of the admirable aspects of this surely outweigh it. And surely that falls into their “doesn’t scale” bucket, but deferring this analysis is different when the scale is external.
I’m not sure how best to mitigate that or whether mitigations are currently appropriate for Oxide. I have some vague ideas, but I’m not in any position to do anything other than comment. But I do think this impact should be part of the discussion, because the discussion is already poised for public impact.
Please reread what I posted and recognize that I did not remotely suggest this. I expressly supported the policy, and want to add a frank recognition of its trade offs because its absence seemed important in the post.
> Are rich people so destructive to neighborhoods?
Disproportionately large influxes of money into a local economy cause distortion to the incentives of that economy. It doesn’t have to have anything to do with the individual people with said money or their individual impact, and often it doesn’t.
The reason I think it should be part of the discussion is specifically because decisions like this don’t tend to account for externalization. If 100 companies like this are fully equitable internally, that’s awesome! But if their impact is pricing people out of housing, that sucks! If you care mostly about the former, that’s cool! I care about both, and I want to include both in the conversation.
> But if you’re anticipating counter-arguments, this glosses over a pretty important one. Regardless of geography, higher income brackets tend to have outsized influence on prices across all income brackets in that region. The more it deviates from the median, the more it distorts local pricing. All of this “rising tide” might eventually “lift boats”, but it depends where all that new capital is flowing and even in the best cases it doesn’t keep up with price inflation.
What I mean is that if you’re anticipating counter arguments you should anticipate the arguments you can expect, not the ones you want to advance yourself. Edit: in HN culture this is commonly phrased as “steel man”, but in basic exchange of ideas it’s just taking seriously the weaknesses your position might have. Generally it’s a good way to strengthen your position, if you can take the alternative views seriously.
There are many valid arguments in favor of location-based pay, but the one you are bringing up – that people in poorer regions shouldn't be paid the same as rich ones because then they'd have more spending money than their neighbors and that would be bad – isn't one of them.
Okay this is only the second response I’ve gotten to but we’re batting 1000 on misrepresenting what I was very careful to not say, and contradicting what I was very careful to say. I understand my comment is likely to elicit some debate but I’m hoping not every response is like this.
It’s also not quite true that companies can just pay local rates. In my experience someone from low COL can easily find a position where the “local” pay band for their level is higher than the local rate. It’s virtually impossible for an engineer with 2 or 3 YOE from LCOL to find a local job paying 125k+, but not hard at all to find such a remote opportunity.
Furthermore, not all jobs are equal. If Google moves their headquarters to Detroit they won’t suddenly pay Detroit wages.
And finally there is another force at play here - companies need to fill the position and what they pay HCOL candidates establishes what they’re willing to pay for the work. Living in Beverly Hills doesn’t make you a better engineer. This isn’t a bargaining chip you can use, but it’s a fact you can benefit from if you’re persistent.
The markets just arent siloed as much as people want to pretend.
I'm not sure I totally understand what they are trying to say, but it sounds like - if you pay people more money in areas where they don't usually get more money - it is bad for those places?
The more interesting part of the quote from the article for me was this:
"Companies spin this by explaining they are merely paying people based on their cost of living, but this is absurd: do we increase someone’s salary when their spouse loses their job or when their kid goes to college? Do we slash it when they inherit money from their deceased parent or move in with someone? The answer to all of these is no, of course not: we pay people based on their work, not their costs."
My point is that it’s important to recognize the external impact of decisions alongside the internal, particularly if you’re making decisions on principle and evaluating them on that metric.
Sure, but I didn’t suggest having no effect. I suggested there are external effects and they should be part of the analysis. I even went further and suggested I would not do anything differently under the circumstances.
"Everyone paid same as CEO" seems great as a morale boost at a startup of 23 employees. Even if it's not a lot, startups are often not flush with extra cash and equity is the main incentive to join one rather than a tech giant. I like the mature "this may not scale and it doesn't have to for now" admission.
Everyone’s different but money pays rent in ways equity doesn’t, so especially for more junior people the money is a massive benefit.
In practice I think that motivated people are fine with non-wild salaries, but with early stage stuff it’s way too common to see people try to use equity as a replacement for salary. Your employees stressing out over money will cause them to perform less well.
Don't get me wrong - I said this in my own comment on this post - I'm glad they're transparent and that they're paying people a living wage given the risks of a startup. I just think they're overselling what this achieves.
Except that undermines some of the core points of the letter. They talk about transparency, but are still being quite opaque. They talk about teamwork, but as employee 50, how am I supposed to feel like I'm on the same team as employee 10, when he stands to make several times more than I do if we succeed?
Yes, but it's rare that employee 10 contributes to the success of a company that has a huge liquidity event at the same multiple as his or her equity multiple as compared with employee 50.
$191k is a HUGE wage for A LOT of people. If you're scoffing at that you need to realize you're living in a bubble. Outside of Silicon Valley that's even a huge wage for a dev.
Surely I'm not the only one who would settle for comfortable?
I have no interest in being rich, personally.
Not trying to pass judgement on anyone, just genuinely curious how common it is in SV to be unhappy with an income that would make you comfortable, but not rich.
Jeez, how much freaking money are programmers paid in SV that they'd be unhappy earning $191k?
I live in probably the most expensive country on Earth, Norway, and at that wage I could work for 10-15 years, and with some smart, fairly conservative investing, assuming good times in the markets I could easily get retired at 40-45 if I wanted to.
Granted I live and generally prefer a very frugal lifestyle even when I am making good money, but still by my back of the mental napkin estimation I could even have 2 kids, a spouse, house and car and still have a ton of disposable income left over to save/invest.
Is there something I'm missing? Is rent in the valley $80k a year or some bizarro world number?
I pay $3k per month for a 1 bed flat which comes out as 20% of my household income - I don’t feel poor out here with a postdoc wife and my own salary that’s not FANG. Life in a nice part of Palo Alto. The HN bubble is a bubble, I wouldn’t worry about it.
750 if I remember right! It’s in what I can only describe as a holiday resort looking apartment block, with a dog park, swimming pool, and fire pit area.
That actually sounds really nice at that price point.
750 is a pretty damn big one bed(room?) apartment for sure, and with the perks, prime location and presumably high end building standards, the price seems very reasonable. Probably similar to what I'd have to fork out for a much more central apartment in Oslo, at a similar size and standard.
True but Oslo is a real city, Palo Alto is similar to the suburbs. I'm moving to Stockholm in the summer and much prefer the look of housing out there!
> Is there something I'm missing? Is rent in the valley $80k a year or some bizarro world number?
Kinda yea.
The average rent in the bay is around $3500, but for a house that is big enough for a family (eg. 3br, garage, etc) you're probably north of $6k. Don't forget, in America, you have to consider healthcare and other costs that may not be priced equally in Norway. The bay also has more expensive food, gas, and other daily expenses etc than the much of the rest of the US.
For example, I pay ~5k a month for a 2Br unit with a garage, at roughly 1k sqft.
I guess there's a lot of things I take for granted that Americans have to pay for. I have to pay about $30 for a GP or specialist appt. And about $30 monthly in meds. That's 2 scrips that are completely free and one generic off-label that's completely out of pocket.
And that's it. Overnight admissions to more or less any health institution is completely free of charge(dental care is a whole other ballgame though, it's not socialised very much yet for adults, though slowly getting there). Similarly if I had kids, future tuition would not be an issue since Norwegian universities don't have tuition.
Thinking about it more it wouldn't be possible for me to live as frugally as I do in the US. Not without sacrificing health care.
To put my frugality in context:
Rent is ~$1K/mo(including electricity and fiber internet), which is about 60% of my income(or rather, 60% of 1/12 of what I earned total last year after taxes. It's complicated since I only take short-term consultancies through friends if they look fun. Most of the time I don't work, except on passion projects). That rent gets me a ~50sq. meter basement apartment on the outskirts of oslo, right on the edge of a beautiful river valley in an affluent neighbourhood. Apartment is nice, the juxtaposition of suburb and wilderness is ideal for my outside cat, who has a cat flap and is almost entirely independent if I fill his bowls once or twice a day. I still manage to afford good pet insurance, and a little saving headroom which I split 50/50 into a rainy day fund and fairly risky(but tiny amounts, so it doesn't feel so scary), cheap stocks. 4x so far. I save half my stock returns and reinvest the rest.
I buy dry foods in bulk, perishables at a discount. My annual transportation budget is about $300(public or legs only).
I guess you could say if SVers are in a high cost, high income bubble, I exist in the opposite cut every cent because I like the challenge and I hate working bubble. So I get pretty flabbergasted sometimes when exposed to the numbers floating around the SV bubble.
Mind you Oslo is the most expensive part of Norway in terms of property; I could go rural and probably decimate my rent but I'm too urban for that.
The entire living arrangement you describe would have to change pretty radically if/when you had a spouse and kids... That's basically the rub with all this.
> Is there something I'm missing? Is rent in the valley $80k a year or some bizarro world number?
I moved from a LCOL where I paid $1200/mo in mortgage + escrow on a 2600sqft 4br house, to a MCOL where I pay $3600/mo in rent for a 1200sqft 3br townhouse. The Bay Area is a HCOL in the US, for a similar property what I have now, it'd be $5k-$6k/mo in rent, plus everything else is also more expensive. Back of napkin, $191k/yr is roughly $128k/yr after taxes, which is roughly $10800/mo after taxes. If rent is $6k/mo, utilities are $400/mo, a car fully laden is $700/mo, and food is $1000/mo, you're left with just $2700, and I'm ignoring significant other expenses. If you have a child (which I do), childcare in SFBA is around $2500/mo, it's around $1800/mo where I'm at now.
Best case scenario, you can save $2k/mo, which puts you ahead of the majority of Americans. You're also renting, which has a continually rising cost which you have no control over. To buy a house you need 20% down to get a traditional mortgage, a typical (for the rest of America) home in SFBA is $3M on the low end, but probably closer to $4M. To save up the $600k you need for a down payment on a $3M house, it'll take 300 months saving $2k/mo, which is TWENTY-FIVE YEARS. So it'll take you 25 years, just to save the down payment so you can get a 30 year mortgage for a house in SFBA on $191k/yr. In 25 years, that $3M house /will/ be at least $5M just due to inflation, which means you're hitting a moving target, if you predict the rise and target it for savings, now you need 500 months or just shy of 42 years to save the /down payment/.
The SFBA is nearly the most expensive place on Earth to live. Norway doesn't even come close.
I make >$300k/yr in an MCOL, I did an analysis and determined if I wanted to move to the SFBA without a massive sacrifice in quality of life for my family, I'd need to earn at MINIMUM $700k/yr to match what we already have, and more realistically closer to $900k/yr. $191k/yr is not even worth considering in SFBA.
EDIT: That said, if this was a remote offering, that's a very decent salary in most of America, and Oxide is a very interesting company with people working there I'd love to work with just so I could be surrounded by their brilliance.
That's great to hear. My comment was more to put into some real numbers the cost of living in SFBA for the grandparent, since they seemed to be under some illusions. In most of the US, that's a very decent salary and would be more than doable, I think in the Bay it's only possible if you already own a home and/or are separately independently wealthy. Which honestly, is fine, more people need to not live in SFBA and live in the rest of the US, even in major cities, which are massively better from a COL perspective.
I’m in the Bay Area and make slightly less than $191k. Me and my wife are very happy financially :) This is a good idea and if you want money then you have to make the company more profitable which is awesome!
Fair, but perhaps they’d also work as hard as the CEO if they were paid the same and had equal preferred founder shares instead of common shares. Also, when was the last time you heard of employees with equity getting a secondary to take money off the table vs founders getting to do so? It’s not the disparity per se (because at some point, there is a demarc between the population willing to sleep on the floor and eat ramen for org success vs those not and a corresponding comp delta), but the disconnect between the disparity and the output expectations.
Edit: I’m aware of the VC backed share structure. My thesis is if you want more ownership in your dream from your employees, give them more equitable ownership in the enterprise.
We’re trading anecdotes here, but in all of the Series A and earlier startups I’m familiar with, the Founder/CEO is the the lowest paid person in the company. I would assume that non-Founder CEOs being hired in would typically be the highest paid individuals though.
There are headlines where the CEO takes $1 in salary, but realistically those are few and far between, and the CEO is usually well compensated in stock options and company jet usage.
I’m a software engineer, live in an area with a way lower cost of living than the Bay Area, work for a company almost exactly the same size, and $191k would be a significant pay cut for me. It really isn’t a lot depending on your role, level of experience, etc, and that’s extra true for the Bay Area.
You're an extreme outlier, then. Most Bay Area software salaries are going to cap out around $190k - $230k range, except at FAANG or FAANG-like companies.
The median Bay Area salary for all levels is about 230k, so closer to the top of your suggested range. 190k would be a 20% lower than median pay, so definitely lower than usual for sure.
This is roughly the Senior (5-10 YOE) salary range at Bay Area startups post-Series A.
Staff-level or higher starts at around $230K and occasionally reaches $275K.
The salary data comes from researching roughly 250 Bay Area startups. I'm personally defining startups as some combination of: Series A - D, founded post-2015, less than 100 Engineers.
I don’t think this is accurate (and it is not in my experience)
levels.fyi puts the median salary for _juniors_ at 180k and the 90th percentile at 230k. The data is obviously imperfect but on average it’s fairly accurate. My personal experience also aligns with this.
Senior is around 300-500k and Staff/Manager can get extremely silly.
Not a lot for total compensation for a software engineer with non-zero tenure in the bay area. For a point of comparison an SFPD officer starts at 105k and gets up to 145k before overtime and this is pretty average in the bay.
Oxide is able to do this because they are founded by folks who have (well-deservedly) an incredible brand and following. For example, I've had a few interactions with Bryan Cantrill over the years, and he's come off as super smart, down to earth, empathetic and fun. It's a good combination.
They're a cool tech company doing cool tech stuff, so folks want to work there and are willing to make salary tradeoffs to make it happen.
Pay has never been an accurate reflection of skill and skill has never been an accurate reflection of what a person can bring to a company. Big Tech thought they could use a combination of paying more and a stringent interviewing process to get the best talent. It turns out in the era of gamified interviewing (LeetCode and friends) that they were wrong and now are laying off tens of thousands of people. Having done over a hundred interviews at one of those big tech companies I was shocked by the people we were hiring and how much we were paying them towards the end of my time there.
Interviewing is a game of generalizations without any one-size-fits-all solutions. If you're a startup doing something ambitious, such as a from the ground up hyperscaler rack and software system, you want to attract extremely experienced and qualified people. Experienced and qualified people with a track record are likely on decent enough financial footing that they can get by on a salary with potential for future upside and an interesting problem to solve and mission.
Also later in your career you can't put a dollar amount on looking around at your co-workers and being thankful for working with high caliber people.
>It turns out in the era of gamified interviewing (LeetCode and friends) that they were wrong
Interviews were gamified for thousands of years, there are private tutors that will teach your child how to pass interviews into the most elite institutios.
Leetcode just made it accessible to unwashed masses.
It most certainly is correlated. Look at averages not individual data points. Clearly a junior engineer makes less than a mid level which makes less than senior, etc. I agree completely that there is a lot of noise within that though.
If we look at Amazon, they do something very similar as they have a salary cap which most employees hit at L6. They can then say 'Even the CEO hits this same salary cap' when in reality the former CEO was the wealthiest person in the world.
Oxide is clever in being provocative here but this is part of a totally normal compensation model.
I'm guessing they don't have offices that require employees like cleaners, or those are conveniently contracted out so don't technically factor into this?
For any startup I’ve worked for, cleaning is provided by the building. So yeah, I’m sure they’re contractors. It’d be silly to have someone as a full time FTE just to clean up after ~20 employees. In fact, the company in OP looks to be mostly remote.
They somewhat address that point by just saying they will figure it out later.
>Some will say that this narrows the kind of roles that we can hire for. In particular, different roles can have very different comp models (sales often has a significant commission component in exchange for a lower base, for example). There is truth to this too – but for the moment we’re going to put this in the "but-this-can’t-scale" bucket.
I am SO baffled. First, this post is two years old -- and has been discussed on HN several times[0][1], but the tenor of the comments here now is just so... vitriolic. I would like to do a blog post on an update on this (the dollar figure is now $191K as the blog post indicates, but the number of employees is now 60) and in particular reflect on some of its many surprising ramifications (all positive), but honestly some of the unhinged comments here have me questioning the judgement of that. Am I the only one seeing a changing tenor here at HN?
I think it's a result of the industry being on a downswing, and a lot of unemployed engineers, who have recently seen rank and file getting laid off while execs get bonuses.
People are very bitter about comp right now, so it's spilling over into this discussion.
But you would think that such folks would see the value in the model? I mean, I get that trust is at a very low point but wouldn't folks see the value in a model that focuses on (among other things) fostering mutual trust? There is clearly a lot of anger out there, and I don't know if that's part of a broader trend or not.
Readers here live in a bubble where the only reason to build a company or join a startup is to get rich, god forbid someone wants to build something, likes a challenge and countless other personal reasons.
No, in this sad place it's either discussing how to move up through corporate ladders or joining startups with insane funding and equity. God forbids, again, anyone has personal professional goals beyond being rich.
Fwiw I like your model and opennes and I find it super fair equating equity with risk. Moreover, I feel like no comments go beyond the money to actually see the goal which is to have people collaborate over compete, remove all the bs that ruins most jobs.
I think people are just going straight for "what's the catch", "how does this create greater benefits for the founders?". I even replied to someone who said "I was waiting for the other shoe to drop" and the complained about the 100% insurance coverage being unfair.
People are super bitter at execs right now, and the vitriol here is not justified.
FWIW I really like it, although I would love to know more about how equity is determined.
Equity has been purely formulaic based on arrival at the company. And speaking personally (though I don't think that I'm an outlier at Oxide in this regard), this is the best team I've ever had the pleasure of working with -- extraordinary in its breadth and depth.
Interesting. Have you ever had a candidate turn down the offer because the equity was too low? Do you have any issues getting senior people to join with this comp plan?
I'm just thinking for senior people, do you have trouble getting them in the door? Like, would you be willing to work at Oxide at the equity levels you're offering today?
We have a process that really requires applicants to develop their own high conviction[0]; it would be unsurprising if candidates for whom compensation is disqualifying never actually applied to Oxide.
In terms of candidates in process who did not matriculate over compensation: prior to writing this blog entry, we had had one candidate drop out over compensation (the lesson we learned was that our compensation had been shared too late in the process with the candidate). Amazingly, after we published this blog post we also had one candidate drop out over compensation (albeit earlier in the process). That one was enlightening because the candidate had read the blog entry but had assumed it was false (?!) and that everyone was actually making secret signing bonuses. Finally, we had one candidate who had simply too much equity as their existing employer to leave. This candidate was absolutely miserable at work, they were disgusted by the company they worked for (and they loved Oxide!), but simply couldn't walk away from the equity, which was vesting quarter over quarter with more money than their parents had made over decades. This was causing real angst for the candidate, even though I assured them that their decision was very understandable!
Finally, your last question is the most important one, because we have always endeavored to build the team that we wanted to be on. For me personally, yes, I would emphatically be willing to work at Oxide -- would that they would have me!
The transparency is great and is clearly a value-add for candidates, IMO.
But the salary simply does not compete with HCOL Startup Senior+ Engineers (around 20- 40% lower than Staff level).
That said, Oxide is in a unique class of startups that can still hire strong talent despite this pay deficit (whether due to an exceptional product, team, technical challenge, or other rare attribute). I know a Software Engineer who just took a 25% pay cut to join a construction analytics SaaS startup because he has heard his brother (a Surveyor) complain specifically about problems this company's solving!
> Oxide not only offers the best healthcare plans we could find, but we also pay 100% of monthly premiums – a significant benefit for those with dependents.
I confess I read TFA just to see when the other shoe would drop, and there it is: compensation varies depending on number of dependents. Yes it's hidden from the paycheck but insurance premiums are absolutely part of compensation. Yet the author openly praises this discriminatory compensation decision.
If it turns out that they also offer a vision plan, are you going to describe it as discriminatory against the eagle-eyed? Or would you be mad if you find out that their healthcare covers women's reproductive health?
Healthcare in this country comes from employers, and so if you've got kids, you've mostly gotta get it from your employer, and everyone with kids needs healthcare for those kids. So if you cover healthcare for your employees, that includes their family. Good system? Hell no. But it's not a trick's trying to punish the folks without kids.
This is a fantastic example of _framing_ - how what's generally interpreted as a positive good can, with the right changes to presentation, be re-framed as a negative. The more classic framing example is a child tax credit (generally seen positively), which doesn't substantially differ from a childlessness tax in other ways than how it's framed.
For more information on that topic and how it's frequently used in arguments like these, I highly recommend _Thinking, Fast and Slow_ by Daniel Kahneman.
I can't tell if this is satire. Are you suggesting that they should pay higher salaries to single people because they likely won't use the healthcare plan as much? Should younger and healthier people also be paid more?
> Are you suggesting that they should pay higher salaries to single people because they likely won't use the healthcare plan as much
Netflix does. Or at least did. They set aside money for insurance, and paid out whatever you didn't use as cash. People with spouses could just opt for the cash.
As a founder, I honestly wouldn't have expected this to be legal. AFAIK, startups aren't allowed to co-mingle salary + healthcare benefits like that.
E.g. you're breaking the law if you reimburse someone's healthcare plan directly or allow them to expense a health expense, even if you classify that as additional income for them, as opposed to having a dedicated HSA account.
Do you have a source? I'd be super interested in how it works, and I definitely may be wrong on this (I hope I am).
Why wouldn't it be legal? The allocate $10,000 pretax dollars per year for health care (this was 10 years ago, it's probably more now). You select whatever plan you want. They pay the premium. They then pay you the rest as taxed compensation.
It's legal for companies to pay your health plan with pre tax dollars. Basically they just set your salary a few bucks higher each month for whatever the difference is.
Some companies ONLY pay for the employee's health care premiums, and the premium for dependents comes out of their pocket.
In this case employee AND dependent premiums are paid by the company, so you could say that single people "get less." They get $500 worth of health insurance instead of the $1000 that other employees get.
(Not making a judgement on GP's argument, just adding context.)
How in the world is this discriminatory compensation?
Let's simplify and say that: everyone at the company, and their families, are entitled to 100% of monthly premiums covered.
Someone choosing not to use that benefit as much as someone else by having fewer dependents is not discrimination.
It's like saying "I don't have a gym membership, I'm not using the wellness benefit each month, this is discrimination and others are getting paid more than me!"
I mean, this is about the employees feeling equal. That's the purpose. Would they feel more equal or less equal if the guy with 2 kids and a stay at home wife got a smaller paycheck than the 25 y/o with no dependents? Seems like you'd be giving up perceived equal (the whole purpose) just to be technically equal.
The cost to the company differs, but the pay to the employee does not differ: They have healthcare and $191,227. Sure, that healthcare is "worth more" if you have more kids, but you can't benefit from it if you don't anyways.
I only spent 6 months in the Bay Area in 2019 for an internship, so I don't have a strong understanding of the cost of living other than "it's expensive". For a family of 5 (two adults, three kids) what do folks perceive to be the minimum base annual salary (with no other compensation) to support such an environment in the Bay Area comfortably and without, as put by the author, financial distress?
My perspective is the COL difference is mostly housing. There are other things that are more expensive than MCOL cities like gas, utilities, childcare, but it's pretty much housing that makes up most of the higher costs.
And housing costs are quite different between the peninsula south of SF and the East Bay, so it's not easy to answer your question.
But if the expectation is that a family of 5 owns a home and the 3 kids are in public school, I'd say a household income (base salary) of $200-$250k is where you get into the "I can afford the basics and still save for retirement" starts.
That fits my experience. If your W-2 income is 200k+ you should be able to afford everything including a place to live (old beaten-down shithole house in a bad neighborhood with a long commute, or old beaten-down tiny shithole condo close to work)
Of course, it's easy to look at that and say "Oh, I'm coming out way ahead by making 150k in $NormalCity instead", but realistically _everything_ after that base 200k is going straight into liquid net worth. So if you're choosing between 400k in Mountain View and 300k in $NormalCity it's an interesting decision, but 400k in Mountain View means you're going to retire way earlier than you would with 200k in $NormalCity
Exactly. Once you cover the essentials, everything above that is cash in your pocket.
People say "oh my god, housing is double in the Bay Area"? And yeah it is. But if you're renting and it doubles from $2,000 to $4,000, that's an extra $24,000 post-tax per year.
If you're getting a salary bump of >$36,000 per year (pre-tax) then you'll still be ahead paying double for rent.
I'm in that situation in NYC, which is roughly comparable. The author quotes ~$190k I'd peg it at ~$250k, but both are in the ballpark. Health insurance is another ~$35-40k on top.
That depends of your lifestyle, hobbies, idea of savings for the future, holidays plans, etc, etc. I do no tthink there is a generic answer for this question.
Overall I really like this -- I think it makes a ton of sense for a startup, where the expectation is that most of the hires will contribute equally. You might end up having senior people self select out for the "low" comp, but others won't care because they believe the equity will make up the difference.
But I take issue with this part:
> As for how equity is determined, it really deserves its own in-depth treatment, but in short, equity compensates for risk – and in a startup, risk reduces over time: the first employee takes much more risk than the hundredth.
I don't think it's correct. Someone who joins with 25 years of experience is taking a lot more risk than someone who joins with 5 years of experience. The first person is most likely on their last job or close to it -- they don't have a lot of runway left to "take another chance". The person early in their career will have many chances to take new risks.
OP didn't get into it, but I hope they consider that when the look at the equity part of compensation.
> Some will say that we should be talking about equity, not cash compensation. While it’s true that startup equity is important, it’s also true that startup equity doesn’t pay the orthodontist’s bill or get the basement repainted. We believe that every employee should have equity to give them a stake in the company’s future (and that an outsized return for investors should also be an outsized return for employees), but we also believe that the presence of equity can’t be used as an excuse for unsustainably low cash compensation. As for how equity is determined, it really deserves its own in-depth treatment, but in short, equity compensates for risk – and in a startup, risk reduces over time: the first employee takes much more risk than the hundredth.
There's an entire bullet point dedicated to it. They even used the same words you used, so searching the page should have gotten you to this section.
If you don't agree with the specifics of their argument here, then that would be an interesting addition to the conversation.
> I assume they are all giving every employee the same % of equity as the founders? No?
And then in this latest comment, you're again clipping off the part that pretty succinctly addresses your original question.
> ...but in short, equity compensates for risk – and in a startup, risk reduces over time: the first employee takes much more risk than the hundredth
So, connecting this back to your original question, no, they explicitly answer that by saying they do not give every employee the same percentage of equity as the founders or earlier employees.
Say two employees join the company today – one with 30 years of industry experience and another right out of college – would they get the same equity? What about someone joining as a VP and another one a support tech? According to the founder they should all get the same, because they are taking the same amount of risk. But is that really the case? What about bonus targets? Commissions? And all other forms of compensation?
My guess is the answer to all of them is no, and stock comp, bonus etc. all vary wildly based on title, job description, location, industry experience and all other standard criteria used industry-wide. And if that's the case then despite the standard $190K base salary the actual comp distribution among their employees is going to look exactly like that at other companies despite all the PR.
You would be guessing wrong. If it helps to understand Oxide a bit: we have had ~2000 applications and we have 60 employees (a level of oversubscription in part because of this very blog entry, published in 2021). It is exceedingly unlikely (though not impossible) that we would hire someone straight out of school, and one of the surprisingly challenging things at Oxide has been turning away people who could quite potentially be terrific contributors.
Probably projecting, but I imagine this is being posted in light of this thread under a comment by Bryan from the other day under an SVB post: https://news.ycombinator.com/item?id=35128789
I was actually completely unaware of Oxide's or Bryan's existence until yesterday - I had no clue they were both known on here, let alone so popular!
I'm just an HN user who was browsing jobs, found this one that listed the exact salary (with this link to their philosophy) - I had never seen this approach before and wanted to hear what HN felt about it.
> Some will say that we should be paying people differently based on different geographical locations. I know there are thoughtful people who pay folks differently based on their zip code, but (respectfully), we disagree with this approach. Companies spin this by explaining they are merely paying people based on their cost of living, but this is absurd: do we increase someone’s salary when their spouse loses their job or when their kid goes to college? Do we slash it when they inherit money from their deceased parent or move in with someone? The answer to all of these is no, of course not: we pay people based on their work, not their costs. The truth is that companies pay people less in other geographies for a simple reason: because they can. We at Oxide just don’t agree with this; we pay people the same regardless of where they pick up their mail.
That was an interesting take on geographic pay differences.
if they relocated to a perfectly nice place to live with lower COL (and probably better schools, housing and infra), then $192k would be just dandy, even rich
It's a little weird because while $191k is a lot of money to most people (it is twice what I make) but it isn't a lot of money in the Bay Area, especially for an experienced tech person.
More importantly Oxide is only (AFAIK) employing senior people who could make more at another company. They don't have Junior programmers or Helpdesk people on $191k.
It seems to very much be instead of a startup paying "minimum/ramen wage" plus options etc they are paying "middle class bay area wage" + options.
Looking at the careers page once again it seems like I am behind the curve. They are probably hoovering up the best engineers Google laid off: people who rode the ZIRP wave and are probably already wealthy as heck and are now jumping onto the next big thing that normie techies will latch onto after it too becomes cliche. It seem like reading HN is only if you want to know what has happened not what is currently happening or going to happen. Where do you go to find out those things?
Oxide has been on HN since very early on and they have been very public for 3 years now. The literally started the company doing a podcast. The opposite of hard to find.
That's the kind of pay that would make people very rich in some parts of the globe, and upper-middle class in many parts of Europe. Admirable of them that they want to create new rich people in poor places.
I wonder how the workers whose relative pay is much lower think about this.
I like this idea. If I'm in another early startup where everyone has to be really good, I might propose it.
We'd need to keep having attractive enough work and environment, and promising enough equity lottery ticket, that others can't just hire away our people by paying 2x to 5x more TC.
How many "non-privileged" companies (tech or not) can't charge the margins tech can (due to whatever market they're in/competition/"that's just the way it is"/customer's wouldn't pay those prices) which enables them to do stuff like this?
First of all, tech isn't always high margin. Second, there are many types of companies that 'could' do this. And even if you are not a 'privileged' company (whatever that is) you can do the same scheme with lower salary.
As I pointed out, the point is not the exact number.
And margin is just one of many factors that sets the avg salary. Margin also depends on what the avg salary is. Some companies have low margin because they have to pay so much salary.
And of course Oxide is making no profit at all, so their margin is nothing.
Is this being a little disingenuous? Obviously the CEO is going to get more equity than other folks, regardless of when they joined. And we all know equity is the real difference maker in compensation in SV / faang / etc.
I appreciate the transparency about pay - that's something we need more of - but the underlying idea is... strangely anti-capitalist for what's supposed to be a startup. This seems more like the viewpoint of a co-op or non-profit than a for-profit startup.
Or at least it did, until I found this buried in paragraphs and paragraphs of text:
> As for how equity is determined, it really deserves its own in-depth treatment, but in short, equity compensates for risk – and in a startup, risk reduces over time: the first employee takes much more risk than the hundredth.
So they're still stratifying employees, but by equity, not cash comp. Likewise, they're still hiding information about the thing that is most likely to benefit the founders of the company more than its employees. If Oxide sells to $bigco for $1 billion, employees 1-5 might get $100 million each, and employee 100 might get less than that yearly "sustainable for everyone" salary.
How equitable and fair will that (for some positions, relatively low) cash compensation seem then?
I get the idea: Do the traditional startup thing, but instead of competing on cash, just make it clear everyone will make a living wage and should be in it for the equity. But if you do that and then aren't being transparent about what the equity is, you're not really being particularly transparent at all. You're just making a big splash.
All the other stuff about values, etc., is bullshit. The point of a startup is to get rich.
I should let this comment go answered, but I simply can't: this team is packed with folks who are exceptionally good at what they do -- it's an extraordinarily inspiring team to be a part of.
> the three of us live in the San Francisco Bay Area, and Steve and I each have three kids; we knew that the dollar figure that would allow us to live without financial distress – which we put at $175,000 a year
Putting aside the fact that is terrible way to determine the rate of pay for anyone, let alone every single person in a company - how on earth did they come up with such a lower number for such a high cost of living area?
Yeah... $190k sounds a lot except in any HCOL area (SF, NY, LA, Seattle, heck even Portland has skyrocketed) it's going to feel very tight with three kids.
Plenty of people do. $190k's just this ridiculous "from first principles" logic game on how much money you need to "survive" there, but it really means "not panic over money or going hungry and bank a little in an emergency fund and a retirement account" level of living, and not "If I eat ramen for a week I can afford the concert ticket" level of subsistence.
But is 120k at least somewhat comfortable for a single person? These different levels you described really hit different as you age. Yeah I could be ramen level but if the option is to not be ramen level at 120k elsewhere then moving to LA is not worth it but if there is a minimum level of comfort then other things make it worth making the move.
LA and the surrounding area isn't cheap to live in. It really all depends on what you do with your money and how lavishly you want to live but I'd say $120k is actually quite reasonable if you're able to live reasonably. Given the choice of $120k in LA or $120k elsewhere, I'm not going to lie, the $120k is going to go further elsewhere (except for, like, SF or New York), but then you're not in LA.
I also don't mean to impugn ramen either, as LA's got some really really good ramen restaurants. It all comes down to if you want to or not. LA's got a lot to offer but it's not for everybody.
I make 150k in LA, with 3 kids, and am the primary income earner. It kinda depends on where you live, LA is a big place with a hugely varying cost of living. I live in the suburbs and it's enough. If I lived in Venice I couldn't afford rent.
It’s so, so fascinating how distorted some folks’ views on money are on HN. There’s also a guy who pops in threads like this and insists that $250k in the Bay Area is “basically poverty.” It only becomes difficult to live on if you insist on private schooling, full-time daycare, BMW-level cars with private parking, etc.
I don't think 250k in the bay area is poverty. But anything under 200k, if you have kids - while not being a struggle - is definitely in "1 vacation per year, never eat out, and watch your budget like a hawk" territory.
You can rent many middle class homes (4b/2b 1.7k sqft) within a 30 min. commute of their office for $3.5k - $4.5k a month. That salary after tax is $10.5k per month. That's without a partner/spouse working.
It's not much, and I'd wager they're restricting their talent pool mostly to people that are making less than that. A senior engineer can easily make almost triple that today.
But I can admire their reasoning (empathy, equality) and the fact that they are sticking by a principle. If I had "f you" money I might simply join just cause what they're doing is so damn cool.
> A senior engineer can easily make almost triple that today.
Salary? Easily? Where?
I've been browsing a lot of staff and principal jobs on LinkedIn recently. Some Crypto firms are around $300k, and I've seen one or two Fintech with specialized knowledge at $400k, but by far the majority are in the $200k region.
From my recent interview experience within the past year as a Google L5 equivalent, all cash discussions were:
- Netflix pays over $500k
- ByteDance pays $530k (they were willing to do all cash at the time, but they may have changed it to 90% cash recently)
- 2 HFTs, both above $750k
Signing bonuses not included. Some companies had >$100k signing.
I'm not a rockstar and I have around 5 YoE.
If you're okay with stock comp (which historically does better than an all-cash offer due to the massive initial equity grant and refreshers), there are plenty of big tech companies offering around the $500k+ mark today.
Can't share datapoints from where I work, but competitive datapoints I've gotten vary from 300k total comp to 800k total comp for senior, staff, principal engineers as well as managers in SF, LA, and DC (though DC is on the lower end). To your point, salaries tend to swing between 150 and 350, but the rest is made up with bonuses and especially stock comp.
Netflix recently advertised an eng mgr role for appsec with a published TC ceiling of 900k, for instance. They even wrote that into the linkedin JD.
That said, the higher you go on TC, the higher the risk that the company doesn't have much of a social contract with its staff and may in fact have a deleterious relationship with society at large - e.g Meta. Not always true, but generally yes.
Nothing about this article or thread is taking about total comp. It’s talking about specifically base salary. ~$200k is in-line with plenty of companies’, even large ones’, bands for L5 FTEs.
Ok. Regardless, you're not going to get a cash offer at a startup that rivals the "today" dollar value of a publicly traded company offering RSUs as compensation. Whether the risk is worth it to you or not is a different and unrelated discussion.
Well a lot of the compensation is not cash, but bonuses and stock grants. I know, stock isn’t cash and is subject to risk, but it’s a lot more than 190k even after you factor in the risk.
https://news.ycombinator.com/newsguidelines.html
If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view will be on a level playing field with everyone else's: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...