I'm in the range of 3-5 years out of undergrad, working at a quant firm. My total gross comp for this year will be about 400-450k, majority of that is bonus.
By quant firm I mean either a proprietary trading firm (no outside investors) or a hedge fund (takes outside money), but not a bank.
I have a CS background but have self-studied in stats, and received mentorship from people with strong math backgrounds.
Main advantages of quant shops (doesn't apply to banks) over working at Google/FB/Netflix etc:
- small company size, startup style working environment, but big corp pay (or more)
- more varied/interesting work, e.g. mix of distributed data processing, high performance numerics, or performance optimization in latency sensitive code
- compensation paid purely in cash, no stock options/RSUs
Regardless of what industry you are in, the closer you are to money, the more honestly you will be paid. This is why in many companies some of the best paid people (sometimes more than executives) are in sales. It is quite difficult to tell an employee that you can only manage a small raise if they can say "I brought in $15 million in business this year." If they have no discernible way to determine what they have earned for the company, they can be had for a song.
This was one of the reasons I left the agency world. I was leading the strategy part and pitching for new business (not to mention scoping the work and contract) and won 7 figures in new business we would not have won otherwise. Didn't get a dime in commission or bonus (or even a raise that year) because I wasn't officially on the sales team and was salaried. Learned my lesson there.
Where is that in the pay distribution? Near median? Realistically, where, comp-wise, would the average SWE plateau?
How many hours are you guys putting in a week?
What was the interview like? Did they go deep into stats/stochastic-calc/derivates-pricing/etc ?
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I'm currently in tech, making near the low end of your range. Getting promoted to the next pay scale (Staff SWE) is a lot more difficult. I'd seriously consider jumping to fintech if 400-450 was below median.
This sounds really interesting to me. Are there other downsides to watch out for? I imagine the security environment is very restrictive: no work from home? No root access on your workstation?
What kinds of skills do you need to get into this area?
The security varies a lot. At one hedge fund I interviewed at, security was almost MI5-like - no phones in the office, no direct internet access, etc. At the place I ended up working, it's rootapalooza. Not in prod, obviously - there it's sudo-a-gogo.
I'm a senior at an HYPSM school, currently looking at offers from one of {Google, FB} and one of {Jane Street, Old Mission, Five Rings, HRT, Virtu}.
The offers are about the same at about 200-250k depending on bonus and stock performance -- the big tech company upped their stock grant to meet the expected bonus at the trading company. It's not obvious to me which one will be more in a few years, and it seems like hours in tech are better. Can anyone weigh in?
It may be close for the first year or so due to the signing bonus, but 3-4 years in if you're performing at the expected level at a trading firm you should be making double the 200-250k number, and I doubt the tech firms match that kind of compensation (at least for most people).
Another factor you may wanna consider is the opportunity cost -- how hard would it be for you to work at GOOG/FB if the trading firm job doesn't work out? And vice versa?
Face the market you work market hours. Tech doesn't have that limit. Both are cyclic, but FB is probably here to stay. Finance can be very dynamic: think LTCM.
A friend works at Virtu and 60 hour weeks are the norm if not more. They're very aggressive wrt managing headcount. Pay is great in absolute terms but pretty low as a % of revenue.
Doesn't mean it's a bad place to work. I have a ton of respect for the business they've built. Their discipline on costs is saving their asses in historically slow market conditions while many competitors are merging or shutting down.
As a Norwegian software engineer, my mind boggles when reading the salary discussions of engineers based in the big cities in the US.
Most engineers here are paid a small fraction of the numbers you cite, even though we are decidedly a first-world country. I guess good ML people will probably get over 100k here, but I haven't heard of anyone near 200k. Any thoughts as to what causes the massive difference?
The dollar is massively over inflated in major US cities. Studio apartments in Manhattan sell for $800-950k. A loaf of decent bread costs $6-8. A beer costs $8 (plus tip). I know that Norway is also expensive, but is it this bad?
This isn't the whole explanation, unfortunately (I really want to understand this relationship). A beer costs more in Norway, a good loaf of bread would be $6 (although you could probably get a cheap one for $2-3), a studio apartment in Oslo would be $300k-ish.
So the biggest price difference is in the rents, or the housing prices. I would probably increase my savings by a factor of five or more if I had a salary like the ones cited in this thread :)
Obviously it's supply and demand, I just wonder which side of the equation is skewed and why.
That isn't it; all the things you mentioned are paid through very heavy taxation, and all numbers we've been discussing are gross salary.
You could probably attribute a 14% difference through the "employer tax" which the US doesn't have (which is taken out of your paycheck before the gross salary number is cited), and arguably another 4% due to mandatory retirement savings. But it doesn't make up for it when the difference is 50%-75%.
I've seen claims of $1M base salaries in NYC, and seven figure bonuses are certainly possible (in HFT). $300K+ (incl. bonus) is no problem, but ML is less of a factor than FPGA and C++ experience.
I work in prop trading and I've never seen that kind of guaranteed salary offered. Maybe as a one time signing bonus to poach someone from a competitor. Typical base salaries for traders/quants/engineers are in the low six figures.
I'm head of a small team running high frequency strategies. I control parameters/portfolio/risk, design/fit predictive models, code C++ for simulation and live trading, and spec out designs for our FPGA developers. I make around 200 base with average bonus in the high 6 figures, good years over a million. At firms with uncapped contractural payouts, bonuses can be far higher for very profitable traders.
But if you come into the industry expecting that, prepare for disappointment. The markets are super efficient so it's hard to make profits. A lot of good ideas are done to death already. You might be stuck on a bad team or not get the opportunity to advance. Making mid 6 figures all-in on a consistently profitable team at a profitable diversified firm is a very good outcome. Modal outcome is making low 6 figures for a couple years and being pushed out.
Also while some enlightened firms realize that infrastructure is a competitive edge and pay big bonuses to engineers, there are many where they're second-class citizens. Only take front-office roles at such firms, not just because of the money, but because you won't be respected. IMO they should be avoided entirely because they'll eventually fall behind and lose.
Thanks for the details. Your depiction is in line with what I've seen personally, but the million dollar base promises did filter in after I left; not for me, but to pass along to people like you, probably.
Complete nonsense. Plus note the intersection between FPGA dev and ML is likely to be practically zero and equally useless at quant firms unless you're in an AI firm building ML on chip. Far easier to go from FPGA to ML than the other way round.
Yeah not really, many HFs will match that 400k, but many will not. I have received a few offers from these quant funds, the offers have been good, but nothing I couldnt get working in tech. My understanding is that the average finance professional makes less than or equal to tech, but the top 1 - 5% of finance easily make 7 figures.
> My understanding is that the average finance professional makes less than or equal to tech, but the top 1 - 5% of finance easily make 7 figures.
This is more or less true, but an interesting thing to think about is that the number of people (with technical backgrounds) making 7 figures in financial firms is smaller than the number of people making 7 figures in technology firms. This is probably obvious to you if you work in finance, but I think most outsiders don't realize that.
If you include people with sales backgrounds like investment bankers then the numbers might shift in favor of finance.
I'm not sure how to answer the question. How would you answer the equivalent question about finance? It's not like working in finance guarantees you 7 figures. I know plenty of people on both the engineering side and the trading side who never made more than 2-300k.
If you want specific examples from tech then the Waymo article from a while back is helpful, but that doesn't mean that you need to work at Waymo or Google to get there, although a large portion of those roles are at Google-tier companies.
Your average agency will not be hiring pure developers and paying them 7 figures, although they might to someone who is generating revenue and bringing in enough business to justify it.
the op made a claim so I am assuming the op knows how to answer this question. The claim is that many more engineers make 7 figures in tech than in finance. My question, specifically, is, what fraction of engineers in tech make 7 figures, let's say what fraction of engineers with 10 years experience and what are the types of positions at those google tier companies that pay this much. I think this is pretty specific
My comment was specifically about the "I mean what sort of position do you need to have to get there?" part of your question.
> My question, specifically, is, what fraction of engineers in tech make 7 figures
I doubt that OP meant that they literally have data showing that it's 1-5%. That's a wide enough range that it's meaningless. I suspect the meaning was more "way above average, but reasonably possible".
I think only distinguished engineers get that outright at amazon of which there are only like 10-15.
However, I bet most principal engineers and up who have been here 3+ years are hitting that lately with how good our stock is doing and that amazon pays higher ups mostly in RSU's.
If literally an engineer, not an executive that used to be an engineer or a famous engineer, this is accomplished by winning the stock options lottery.
It seems plausible to me at least that there are more ordinary engineers that have won the stock options lottery across all of tech than the total that are earning equivalent amounts in finance.
Well, there are more engineers working in tech than in finance. The relevant question is the odds of a particular engineer winning the options lottery than 7 figures in finance
Ah that matches what I have heard. HFT/HF is paying up but overall, as someone who is coming up on making the decision, it's hard to see the upsides of finance.
Losing all visibility/ability to publish/being a first class contributor and not second class dev..
I wouldnt get into HFT, its commoditized. The future of finance is in processing huge volume (internet scale) unstructured data and analyzing it in real time. HFT of website data if you will, right now we are in the infancy
But, I agree, finding alpha through alternative means at internet scale has been around for at least a decade, but things are getting more interesting now.
How large do you think that population of people in finance making 6 figures is in raw numbers? When you compare that to the tech industry, there are certainly high level engineers and managers that make 7 figure salaries all things included (especially given the growth in stock price at certain companies).
"How large do you think that population of people in finance making 6 figures is in raw numbers?" you mean 7 figures? if you are a top engineer in finance with many years of experience, you are likely making close to 7 figures.
Right now, for top tier PhD graduates in machine learning, it's about 300-400k at big tech companies starting out, and ~200k for master's degrees.
From what I read and heard, banks are not really willing to pay up competitively for software?