Compensation

When you receive your offers (congrats!), it's important to understand your offer compensation. This way you can avoid a lot of future mistakes, and compare different offers better.

There are two big main parts of the compensation:

Base salary

The usual salary that you receive month to month. For software engineers in US and Europe, it should start from about 100000$.

Stocks

Stocks are important part of the compensation of software engineers in a lot of companies. Usually, you will be given a predefined amount of stocks in your offer.

It's important to understand if the stocks you will get are liquid. If the company is public and its stocks are traded on the market, you can usually sell your stocks whenever you want (google "Company X stock price" to check if the company is liquid). If the company is not trading its stocks yet (it is yet before IPO), stocks that you will get don't cost anything, and it may take years for the company to become public and for you to sell your stocks. Remember also that most companies never make it to that stage.

Often, especially if the company is not public, instead of stocks you may get stock options – an opportunity to buy company stocks at a fixed price later. Remember that stock options are not stocks, and you will have to spend some amount of money to get the actual stocks later.

Finally, the most important aspect is when and how you will get stocks. In tech, the usual practice is to give you a four year stock grant, meaning that you will receive some amount of stocks once a year for four years (after that you may get a new stock grant). For example, if you receive a four year stock grant on 1000 stocks, you will get 250 stocks once a year for four years. If you leave the company earlier, you get only a portion of your stock grant – this way companies incentivize engineers to work for them longer.

Your stock grant timeline and distrubution may differ, so make sure to find out and understand all details. Stocks are an important part of the compensation, and often take something like 30-50% of the total amount of money you get.

Other compensation parts

There are many other small compensation related things you should find out.

  • Signing bonus. It's a common practice to receive a so called signing bonus – a one time bonus once you join the company. It may be in a range of tens of thousands of dollars, and you should check if the company has one.
  • Yearly bonus. In a lot of companies it's a usual practice to give engineers 10-15% salary bonus every year.
  • Relocation bonus. Often, if you are moving to the other city or country, the company may provide a relocation bonus to help you cover the moving costs. If you will need to move, you may ask a company about this.
  • Health insurance. If the company will provide your health insurance, you can ask about it too.
  • Benefits. Find out what other benefits the company has. Free lunches, gym memberships, public transportation money, and so on. While these are smaller details than the salary and stocks, it contributes a lot to your daily work life.
  • Vacation. While not really a compensation part, vacation is a really important part of your work. Find out what is the vacation policy of the company – how much and when you can take it? The usual vacation amount is something like 15-20 days a year in the US, and 28-35 days a year in Europe.
  • Other leave policies. Does the company have a lot of sick leave days (for when you are out sick)? What about maternity and paternity leaves? These may be very important depending on your situation.
  • Taxes. It's important to understand your taxes, especially if you will need to move to another country. What is the typical amount of taxes you will need to pay?

Read more

The information above is just a very brief introduction to the details of the compensation. You can read the following resources to understand more: