When US$200,000+ is the median - insights into what listed US tech companies pay
Economic times are tough wherever you look and We’ve just seen over 100,000 workers shown the door at US tech companies including Amazon, Microsoft and Meta.
But a review of median salaries offered at publicly listed tech companies shows the extent to which they continue to pay high salaries, particularly for software engineering expertise that allows them to gain an edge over competitors.
Gergely Orosz, author of the Pragmatic Engineer newsletter has run the numbers from public disclosures for 100 US-listed tech companies released in the latest wave of earnings reports for 2022.
He has focused on ‘median’ salaries, meaning “~50% of staff made more than this number, and 50% made less”, as that is considered a fairer measure of a company’s distribution of compensation rather than ‘average’ salary which can be skewed by the compensation packages of top earners.
When it comes to the top salaries at listed tech companies it isn’t always the biggest players offering the most. While Meta (US$296,320) and Alphabet (US$279,802) made the top ten, smaller tech companies Okta (US$397,707) Roblox ($315,140) and Box (US$292,514) are in the top five.
Source: Pragmatic Engineer
Those median salaries do include stock packages and one-off benefits, which are commonly used in US tech companies to attract and retain talent.
But some major listed companies, such as consulting firm Accenture (US$22,380), have relatively low median salaries.
“Low median total compensation usually means the median employee is not a software engineer,” Orosz explains.
“The median compensation package at Stitch Fix is for a Remote Stylist position, while Amazon’s (US$34,484) median employee may be a warehouse worker, while at Uber and DoorDash it’s an operations role.”
So non-tech roles lower the median salary. Sales roles, in particular, can pay more than tech roles, with big commissions paid for achieving sales targets.
Lower salaries outside the US
There’s another factor too - employees outside of the US are counted and many of them earn less than their US colleagues.
“This is the case for Accenture and Cognizant,” Orosz points out. “Both these are service companies with most staff based in India. The median employee is most likely to be an entry-level software engineer in that region.”
Cognizant, with 355,000 employees, breaks out its median salary by region - global (US$31,450), UK (US$70,462), US $93,846).
According to the analysis by Pragmatic Engineer, 20,000 tech company employees in the US make at least US$93,000 as an annual salary.
According to the Technology Investment Network’s annual TIN report, the average salary at a TIN200 company is $88,005. In the fintech sector it is higher at just over $100,000.
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