Big Tech negotiation
by Josh Doody
Netflix is unusual in many ways among big tech companies. One of the differences that really sets it apart is that its job offers are pretty much one-dimensional: cash. They don’t offer RSUs or target bonuses, but they do offer stock options as a benefit (5% of base pay) and they occasionally offer sign-on bonuses. Netflix employees also have the ability to buy stock options for a very good price through their Stock Option Program.
But what about negotiating Netflix offers? Aren’t they famous for not negotiating them?
For a long time, it was true that Netflix did not negotiate their offers except in very unique circumstances. But with increasing market competition and a closer focus on operating expenses and payroll costs, they have slowly begun to migrate over to a more traditional organizational structure and compensation philosophy.
That means that if you do manage to get a Netflix offer, there are tactful ways to negotiate that could result in a significantly-improved offer.
Once you actually get through the Netflix interview gauntlet, you may receive a job offer. Let’s look at an example to see what you can expect.
Netflix’s offers are a little unusual relative to other big tech job offers because they are almost exclusively cash-based and rarely include equity:
So that leaves a pretty straight-forward compensation package: base salary with a very small possibility of a sign-on bonus and 5% of base salary in stock options. They also offer very generous relocation benefits if you need to move in order to work at Netflix.
Let’s walk through each component of a Netflix job offer
As with most job offers, this is the stable, predictable component that you can use to pay your mortgage or car payment.
Netflix’s base salary offers tend to be substantially higher than other firms because the base salary represents almost all of their overall compensation packages. If you’re wondering whether the salary you’re offered is competitive, blind and levels.fyi are good places to start.
There are several factors here that make this a moving target.
In general, the more junior the role, the firmer the initial offer. The more senior the role, the more room to negotiate there might be.
For example, a Junior Engineer (E3) offer might be totally inflexible. On the other hand, a Principle Engineer (E7) offer might have substantial flexibility.
Although they have softened their stance on job offer negotiation, they are still primarily focused on hiring the best talent available, and the most talented people are often the most experience and the most in-demand. That means they sometimes have to fight to persuade the most talented people to join their team, and that can mean more flexibility in a negotiation.
Even within levels, there can be significant variation in base salary flexibility. For example, User Interface Engineers and Machine Learning Engineers at the same level may have significantly different pay and negotiating leverage.
This is because some specialties are more in-demand and there are fewer people available with those skillsets.
Netflix doesn’t typically offer sign-on bonuses, but they are available in some cases.
There are several factors here that make this a moving target. In general, they don’t offer sign-on bonuses. When they do, it’s usually for a very experienced person with expertise in a niche that is particularly useful to the company.
In those cases, they might be flexible in going from “no sign-on” to “some sign-on”. Industry-standard sign-on bonuses are anywhere from $10,000 to $100,000 depending on the role.
Netflix employees receive a stock options benefit equal to 5% of their base salary. This likely isn’t negotiable as it’s a one-size-fits-all type of benefit that everyone gets.
Netflix has a team (the Talent Mobility team) dedicated to helping relocate people who need to move for their new role. This benefit can be very generous and they work hard to make sure that relocation isn’t a barrier or significant distraction as you’re gearing up for your new Netflix role.
This is a difficult question to answer because they are so generous. While this is likely not “negotiable”, it is flexible enough to take care of what you need when you relocate. Make sure you talk in depth with the Netflix team about any costs you might incur when making your move so they can be generous with this benefit.
Netflix doesn’t offer target bonuses.
Netflix doesn’t offer new-hire equity.
The salary negotiation with Netflix will begin earlier than you might expect.
Your Netflix recruiter might ask for your salary history, or at least your current salary if it’s legal where they are. Do not tell them your current salary. If you do, your job offer may only be slightly above your current salary and it will be challenging to negotiate a substantial increase once they make your job offer.
They will also usually ask for your salary expectations. That request will sound something like this:
So what were you hoping for in terms of compensation if you come aboard here at Netflix?
Do not tell them your salary expectations because you will essentially be guessing what they might pay someone with your skillset and experience to do the job they need done.
While they might have a good idea of the value of that job to Netflix’s business, you would only be guessing. You will practically always guess wrong and cost yourself money later on. So just don’t guess.
Netflix will hold on tight to these numbers and it can be very, very challenging to get them to move once they know what they are aiming for. So avoid sharing that information if at all possible.
They may also ask you to tell them about any competing offers you have because they “need more data”. I generally recommend that my clients confirm that they have one or more competing offers while being vague about the details of those offers. It’s ok to mention that other big tech companies are interested, but sharing the specific companies or details of the offers could work against you in the early stages of the negotiation.
Learn more What to say when asked for your salary expectations during an interview
Because of Netflix’ unusually cash-focused compensation structure, you should focus on base salary. How much additional salary to ask for is dependent on how senior your role is and how specialized your skillset is.
In general, the more senior you are, the more aggressive you should be, and the more specialized your skillset is, the more aggressive you should be.
The reason for this rule of thumb is that your level of aggression will usually be based on how badly they need you to do this particular job for them. The more senior and specialized you are, the more they’re going to need you, specifically, to do the job they’ve offered you. That gives you more leighway to negotiate.
Learn more More salary negotiation strategy and tactics...
One unusual benefit that Netflix offers is the Employee Stock Option Program. It can be a very valuable benefit to Netflix employees, so it’s worth taking some time to walk through it.
Most big tech companies offer some sort of Employee Stock Purchase Program, which enables employees to buy shares of stock (RSUs) at a discount. Netflix’s Employee Stock Option Program is different because they offer stock options with a 10-year exercise window—this is a very generous exercise window—and those options stay with you if you leave Netflix.
Netflix automatically gives employees stock options equivalent to 5% of their base salary and you can choose to be paid your base salary or substitute base salary for equivalent stock options, purchased at 40% of the current Netflix stock trading price. (“Current” meaning the Netflix stock price at the close of the first trading day of the month.)
As an example, if you were making $100,000 a year base salary at Netflix…
On a particular Grant Day, if the stock were trading at $500 per share, then each stock option would cost $200 (40% of $500), would have a strike price of $500, and would have an exercise window of 10 years.
There is a risk/reward calculation that each Netflix employee must do to determine how much of their compensation they want to take in the form of Netflix Stock Options, but this benefit has the potential to be extremely lucrative given generous option price and the 10-year exercise window.
This benefit is so valuable that it might affect your Minimum Acceptable Salary calculation.
I offer full-service 1-on-1 support to help Senior Software Engineers and Engineering Managers negotiate the best offer possible and with more confidence and less stress.
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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