Big Tech negotiation

How Big Tech Structures Their Job Offers

Everything you need to know to understand and evaluate your job offer from a Big Tech company


by Josh Doody

Getting a job offer from a Big Tech company could be a career highlight. Big Tech generally pays more than most other industries, and there are often exciting opportunities to work on cutting edge technology that people use every day.

But Big Tech job offers can also be sort of overwhelming as the numbers they offer are big and often opaque.

This is your guide to understanding Big Tech job offers so that you can make a more informed decision about whether a particular offer is right for you, and so you have a better understanding to rely on when you negotiate with a Big Tech company.

What a typical Big Tech job offer package looks like

Once you finally get through the interview process, you may receive a job offer. Let’s look at an example to see what you can expect.

Big Tech offers are pretty standard across the board with a few exceptions that we’ll get to later on. Here’s what they typically look like:

  • Base salary
  • Sign-on
  • New-Hire Equity

They may also include other components, but these are the most common ones.

Here’s a generic example just to get you comfortable with a baseline offer (all numbers are $1,000s). This isn’t meant to by typical or representative of the quantities for any particular component—this is just what components you can expect in a typical offer.

This offer is for $150,000 base salary, $200,000 total equity (vesting over four years), and a $10,000 sign-on bonus:

ComponentYear 1Year 2Year 3Year 4Total
Base Salary150150150150600
Sign-on1020
Total Cash160150150150610
New-Hire Equity50505050200
Total 210200200200810

Before you go on, notice that the “Total” row looks pretty much the same from year to year. The first year is slightly higher thanks to that sign-on bonus, but otherwise it’s flat.

This is typically the comapny’s goal: They are targeting an annual total compensation number, so the sum of the individual components will usually look pretty much the same from year to year.

Negotiating with a particular Big Tech company? These dedicated guides will walk you through it:

Let’s look a little closer at the main components of a Big Tech job offer.

Base Salary

Base salary is the most stable component of your job offer, and the one you can budget around for the coming year.

Interestingly, you’ll find that base salary tends to increase pretty consistently for lower-Level jobs, tapering off for mid-level jobs (often around “senior” job titles), and topping out somewhere between $250,000 and $300,000. This is not an iron law, but it’s extremely common.

Because of this taper, if you focus only on base salary, it can be very difficult to compare compensation across jobs at different levels and different companies.

In some cases, the base salary is totally disconnected from the individual’s place on the org chart within the company. Fun fact: Jeff Bezos made $81,840 (not a typo) base salary in 2022.

A big exception to this is Netflix, which pays almost exclusively in base salary. See below for an example.

“Ok, but if they stop increasing base salary between $250,000 and $300,000, then how do they pay more senior people more money?”

Great question! The answer is equity.

New-Hire Equity (RSUs)

While base salary has a sort of unofficial cap around $300,000 at most Big Tech companies, equity can go up and up and up. So once a job gets to the “senior and above” levels of the organization, base salary sort of stagnates while equity grants start increasing.

In our example above, 25% of that person’s annual income would be from equity while 75% would be from base salary.

But as people move up the org chart at Big Tech companies, that ratio will even out and eventually flip. The equity component will approach 50%, then 60%, and keep climbing to the most senior roles in the company. Compensation packages that have 25% base salary and 75%+ equity often start happening at Senior Director-type roles and above.

There are no iron laws here—only trends and tendencies. The trend is that as you get more senior in Big Tech, your salary will initially increase pretty quickly, but then slow down as equity starts increasing instead until equity is the majority if your income.

How new-hire equity (RSUs) work at a Big Tech company

Let’s look a little closer at how this might work.

This is a very simple overview of this topic, mostly just to give you an idea how it works. It is not meant to be a technical guide. If you want to go really deep on all-things equity, The Holloway Guide to Equity Compensation is amazing.

Before I walk through this and give examples, let me say that there are lots of different ways of doing this, so don’t take this example as the way to think about equity vesting.

You’ll want to look through your own job offer to make sure clearly identify how much equity they’re offering, whether there’s a cliff, and what your vesting schedule is.

But this should illustrate the general concept pretty well.

RSUs

RSUs are Restricted Stock Units. They’re essentially shares of stock (units) with restrictions on them. The restrictions are usually when you get them and what you can do with them when you have them.

But for most people, you can just think of them as a pile of shares of stock in that company that you’ll be given parts of at regular intervals until the pile is gone.

What is an equity (RSU) grant?

You start with some number of RSUs (Restricted Stock Units), which are essentially a promise to give you shares of company stock over time according to a vesting schedule. That is your initial equity grant. It’s basically an allotment of RSUs with some strings attached.

Vesting schedule

As you can see in the example above, you do not get your entire equity grant all at once. Instead, it vests on a “vesting schedule”.

“Vesting” equity is when some of those RSUs in your equity grant are converted to actual shares of stock (equity) in the company that you own. One RSU converts to one share of stock.

Once you own that stock, you can choose to hold it or sell it.

There are three main things to pay attention to with your vesting schedule: the cliff, the amount, the grant frequency.

We’ll talk about the cliff below, but let’s look at the amount and grant frequency.

The amount is how much of your equity grant you get to convert to company stock at any given time (typically talked about in annual amounts).

The most common vesting schedule is a flat four-year schedule, meaning the equity vests over a four-year period and 25% vests per year (like the example above).

There are also some other unique schedules. Here are a couple examples:

Amazon vests over four years, but the amounts are 5%/15%/40%/40% per year. So the equity vesting at Amazon is “back-loaded” to the third and fourth years.

Google vests over four years, but the amounts are 33%/33%/22%/12% per year. So the equity vesting at Google is “front-loaded” to the first and second years.

Most of the other Big Tech companies use a flat four-year vesting schedule like the one in the example above.

There may be a “cliff”

There is also a concept called a “cliff”, which most Big Tech companies use. You can think of the cliff as a sort of waiting period before your equity starts vesting. This doesn’t affect the vesting schedule itself, but it may affect exactly when you get paid.

The most common cliff is a 1-year cliff. That means that you will get your entire first year’s equity grant all at once after you have been with the company for that year.

To make things simple, let’s say you start at a Big Tech company on January 1. Your equity grant is $200,000 in RSUs on a flat four-year vest with a one-year cliff.

That means you’ll get $50,000 per year in equity grants, and your first equity grant will be given at the end of your first year working for that company.

This may not be exactly accurate, but we’ll keep it simple for illustrative purposes:

You start at the company on January 1, and you start getting paid base salary and other benefits right away. But you won’t get your first $50,000 equity grant until the following January 1 when you’ll get the full first-year $50,000 equity grant all at one time.

Once you have received your initial grant (once you have gotten past the cliff), your equity will typically start vesting at regular intervals through the remainder of the vesting schedule. Sometimes those intervals are monthly, quarterly, six-monthly, or other intervals.

A note on refreshers

This is beyond the scope of this article because refreshers aren’t part of your initial offer (they don’t usually show up until at least Year 3), and they’re handled differently depending on the company.

But just for completeness: “Refreshers” are additional RSU grants that the company may offer over time. These new RSU grants will also have a vesting schedule and will likely have strings attached similar to those of the initial RSU grant.

These are designed to keep employees motivated and to keep total compensation level over time.

In most traditional (non-Big Tech) companies, your annual raise just results in a higher base salary. As I mentioned above, Big Tech companies tend to have a sort of cap on base salary somewhere between $250,000 and $300,000, so rather than giving you more base salary over time, they give you additional equity grants whose vesting schedule makes your anticipated annual total compensation look pretty flat year-to-year (or slightly increases it as you would expect with a normal “raise”).

Sign-on Bonus

Even if there’s not a sign-on bonus included with your initial offer, there may be one available through negotiation. Sign-on bonuses, like equity, can range from four figures into six figures.

I like to think of the sign-on bonus as a way to help bridge the gap between your first paycheck and your first RSU vesting date.

Beware clawbacks

In many cases, the sign-on bonus will come with strings attached. Namely, if you leave the company before the end of your first year, the company may be able to “claw back” some or all of your sign-on bonus. That is, they may ask for you to return, or even simply deduct the amount from one or more of your final paychecks.

This will usually be prorated, so if you are there 11 months, you would only need to return one month of your sign-on bonus.

Some companies will include a clawback in their contract, but won’t actually enforce it most of the time.

You’ll want to make sure you understand what’s in your contract and what typically happens at your particular company if you foresee a chance that you would accept a contract along with a sign-on bonus, and then leave the company within a year.

This usually only applies if you leave voluntarily and doesn’t affect people who are laid off.

Other Components

This is where things start to become less uniform among the Big Tech companies. Here are some of the items that you might see:

  • Annual bonus
  • Vacation time or paid time off (PTO)
  • Relocation assistance
  • Remote work policy
  • Continuing education subsidies
  • Reimbursements for work-related expenses like parking, commuting, gas, etc.
  • Subsidies for things like gym memberships

The list goes on and on and can get pretty specific depending on the company. I’ll add a little detail for a few that seem to be items that my clients often focus on.

Annual bonus

This can be substantial (sometimes as much as 25% or so), which means it’s worth understanding exactly what you’re being offered. Here are some questions you might want to ask about your annual bonus to understand it better so you can estimate its value to you:

  1. What is it based on? Most of the time it will be some percentage of your base salary. If you make $200,000 base salary, and your bonus is 20%, then your bonus would be 40%.
  2. What are the criteria for paying it out? It’s pretty rare that you’ll just automatically get your annual bonus. Instead, companies will have certain criteria for how your bonus will be paid out. Those criteria are usually a mix of your personal performance (often tied to your performance review) and company performance (tied to high-level metrics for the company, or for your department, business unit, team, or some subset of those things). Sometimes, you’ll be able to find an explicit formula used to calculate your annual bonus. Sometimes it will be more opaque. In almost all cases, paying out your annual bonus is at the company’s discretion.
  3. When does the bonus pay out once it has been earned? Most companies pay out annual bonuses after the completion of a calendar or fiscal year. Sometimes it’s pretty quick, and sometimes it may be many months after the bonus period before you actually get that bonus. You’ll want to know when it pays out so you can budget for it, but also so that you can be strategic about when you might leave the company for another role. You often have to be currently employed by the company to get your bonus payout, so if you are planning to leave it might be worth arranging the timing so you can collect your bonus before you leave.

One thing that can be helpful in evaluating the value of your bonus is to see if you can find out how often bonuses are paid out, and how often they reach maximum attainment. You might ask your recruiter about this, or if you know someone who has worked at the company for a few years, you could ask them.

Some companies pretty much pay out max bonuses like clockwork every year. Some don’t.

Vacation time or paid time off (PTO)

Most of the Big Tech companies have a one-size-fits-all vacation policy.

When you start working there, you get some amount of paid vacation. The longer you work there, the more paid vacation you get every year.

It can be tempting to try to get more PTO, but it’s pretty rare.

My general rule of thumb is that the smaller the company, the more likely you can negotiate for more PTO. The bigger the company, the more likely they just have a set schedule that everyone follows and there’s probably nothing you can do about it.

Occasionally, they will make exceptions and add another week or so. But I usually counsel my clients to evaluate the actual value of that week of paid vacation (both financially and in terms of quality of life) to make sure it’s worth using one of your negotiation “asks” for this. It’s usually not worth it because they can find other, more valuable things to ask for.

Relocation assistance

Similar to vacation allotments, relocation assistance (“relo”) is often a pre-packaged benefit that you’ll get if you need to move to join the company, and you won’t get if you don’t need to move.

What’s more, it’s usually administered by a third party (this benefit is outsourced), so it’s basically just a box that someone in HR checks, triggering another company to work with you to relocate.

Sometimes, you’ll be given two options: A lump sum of cash that you can do what you want with, or reimbursement (possibly with an explicit cap) for any costs you incur when moving.

Remote work policy

This is usually explicitly described in the job description, but it’s worth confirming, especially if you plan to work remotely full- or part-time.

Examples of Big Tech job offers

Here are some examples of Big Tech job offers along with some notes on what makes a few of them unique.

Amazon

Here is an example of a standard Amazon job offer.

ComponentYear 1Year 2Year 3Year 4Total
Base Salary$145k$145k$145k$145k$580k
Sign-on$30k$20k$50k
Total Cash$175k$165k$145k$145k$630k
Equity (RSUs) Vesting5%15%40%40%100%
Equity (RSUs) 501504004001,000
Equity (RSUs) Value* $5k$15k$40k$40k$100k
Total $180k$180k$185k$185k$730k

Unique attributes

There are two main things that make Amazon’s offers unusual: Year 1 and Year 2 sign-on bonuses, and the equity vesting schedule.

Earlier, I mentioned that companies are typically targeting your annual total compensation with their job offers—that’s why the “Total” row in the examples typically looks very similar from year to year.

Amazon does this too, they just do it in a unique way: Rather than offering you base salary and equity that vests on a flat schedule, they give you base salary, equity that vests on a back-loaded schedule (most 40% in Year 3, and 40% in Year 4), and they use sign-on bonuses to bring that total compensation number up to the target number in Year 1 and Year 2.

Apple

ComponentYear 1Year 2Year 3Year 4Total
Base Salary210210210210840
Sign-on100100
Total Cash310210210210940
New-Hire Equity100100100100400
Total 4103103103101,340

Facebook (Meta)

ComponentYear 1Year 2Year 3Year 4Total
Base Salary200200200200800
Sign-on5050
Total Cash250200200200850
New-Hire Equity100100100100400
Total 3503003003001,250

Google

ComponentYear 1Year 2Year 3Year 4Total
Base Salary140140140140560
Target Bonus2020202080
Sign-on4040
Total Cash200160160160680
New-Hire Equity114966030300
Total 314256220190980

Unique attributes

Google has a front-loaded equity vesting schedule, so you’ll notice that their annual total compensation numbers actually decrease over time.

They’ll make up for this with raises and refreshers over time.

Microsoft (GitHub)

ComponentYear 1Year 2Year 3Year 4Total
Base Salary150150150150600
Sign-on5050
Total Cash200150150150650
New-Hire Equity40404040160
Total 240190190190810

Netflix

No fancy table for this one because Netflix pays pretty much everything in cash (base salary).

Base Salary: $400,000

Unique attributes

Netflix offers are basically cash offers. They also have the Netflix Employee Stock Option Program, which is a way for employees to choose to be compensated in stock options, which is extremely unusual.

Nvidia

ComponentYear 1Year 2Year 3Year 4Total
Base Salary200200200200800
Sign-on4040
Total Cash240200200200840
New-Hire Equity175175175175300
Total 4153753753751,540

Tesla

ComponentYear 1Year 2Year 3Year 4Total
Base Salary175175175175700
Sign-on2020
Total Cash195175175175720
New-Hire Equity100100100100400
Total 2952752752751,120

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I'm Josh Doody, a professional salary negotiation coach who helps High Earners negotiate their job offers. On average, High Earners improve their first-year compensation by $47,273 with my help.

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