Understanding Big Tech Salaries

It&#x27;s not <i>just</i> a vanity metric. The reason they choose to pay at a very high percentile of the market reference point is <i>so they rarely have good candidates decline offers</i>. Big Tech wants to be in the position where when they see a good candidate that they want, they get them, and don&#x27;t need to worry about them going to a competitor. And they can usually afford to make that happen.<p>And knowing <i>that</i> puts you in an even better negotiating position. I got $150K&#x2F;year <i>extra</i> in stock (which turned into $300K&#x2F;year a year later when the stock doubled) with the 5 words &quot;I respectfully decline your offer.&quot; If they want you enough, large pools of extra money are available to prevent you from declining or going elsewhere.

&gt; Tech companies… decide which salary percentile they want to compete at. Do they want to compete at the top of the band (95 - 100 percentile) or at 75th percentile?<p>&gt; … It&#x27;s a vanity metric for the company. Facebook could choose Cisco as a peer and pay way less, but they don&#x27;t because they can afford to.<p>“They can afford to” is what lets them offer high compensation relative to other companies. The “choice” they make is to fill their hiring funnel with extremely motivated candidates, and this lets them pick and choose from that labor pool.<p>Many companies choose to not fill their hiring funnel like this.<p>The <i>reasons</i> for wanting a large pipeline were explained well in another article, but in short: These companies are competing in a global market and need “best-of-breed” solutions.

&gt; The simple answer? They can afford it.<p>I&#x27;m honestly not trying to nitpick, but the explanation &quot;they do X because they can X&quot; is not a good one. Being able to do X is a prerequisite for doing X, but it is not a sufficient condition. Why do they choose to, though? Perhaps, a part of it is vanity, but<p>&gt; nothing to do with your skills<p>is a bit much. I might assure you, a FAANG interview requires certain skills[1], and it&#x27;s easy to fail or be &quot;downleveled&quot; to a lower salary.<p>[1] - not to discourage anyone from trying to, you just need to put in some time and work.