Are we really worth $3.5 million? | Hacker News Reader

Are we really worth $3.5 million?

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13 pointsvital10121 comments

In disagreement. Google's revenue per person employee is $1.34 million[1]. Variation between individual engineers (according to Brooks et al) can be as high as 10x (leading to the famous "10x engineer" meme). This 3.5 mm is (most likely) vested over four years. Google doesn't hire from the bottom end, but given he's risen to staff (or is it senior staff?) level we can safely assume he's at least 2x more productive than an average engineer at Google.

So the "naive" numbers mean that over the course of ten years, they could make up to $10mm from this person.

Obviously, we don't know his marginal value (how much would Google lose if he was let go and no replacement was found?), but it's safe to assume Google will make money if he takes their offer and stays vs. if he leaves (even if wasn't going to a competitor): why would an engineering/metrics driven (sometimes to the point of "41 shades of blue") company make this offer, if they didn't think the bargain was theirs?

He could also easily be worth more than $10mm (imagine if his contribution was an algorithm to increase CTR on ads but a few percent!) and I imagine Google does make an effort to measure a) how much money a product makes b) how much do various engineers contribute to various projects. This is likely a highly rational decision.

[1] Source: http://www.businessinsider.com/chart-of-the-day-google-reven...

Why are multimillion dollar bonuses accepted and standard for management but somehow shocking for engineering?

I like seeing recognition that a top engineer's work could net the company many millions of dollars of revenue.

I'm so happy to see somebody say this. There really seems to be no limit to the insanity of bonuses and retention packages and signing perks and soforth for executives.

Exactly. I read an article like this as implying that, "serious money is only for executives and rich people, not for workers. Workers are commodities, tools."

From the article: "How many lives could be saved through research, aid, or vaccines? How much good could be done with $3.5 million?" The author is literally implying that giving $3.5 million to a world-class engineer is a waste. Not a word about the millions or billions of dollars of compensation for management, as you said. None. It's as if the author can't possibly imagine that a single engineer could do work valued at $3.5 million, ever.

What causes this type of mentality? What is this even called? Crab-bucket mentality? Self loathing? It's one thing to see workers struggling for fair compensation for their contribution to an organization's financial success and quite another to see a resistance "from within" to that struggle. Don't programmers, engineers, designers, etc. want their peers to be more successful?

All of this is a lot more diluted when the workers you're talking about already make much more than is required for comfortable subsistence.

It's one thing to talk about self-loathing hurting the cause of workers struggling to meet their basic needs, but at the level of most employed software engineers, I'm not sure how much it matters.

That said, I don't see any difference between engineers and executives in this regard, so if it's okay (by whatever measure) for one to receive multimillion-dollar bonuses, so it is for the other, IMHO.

It would be impolite to mention who the client is or specific numbers, but let's say this is a fiction based on recent experience:

FooCorp is a well-known software company which makes FooBar, a product virtually synonymous with bar. FooBar's rankings for [bar] suck because FooCorp has a longstanding institutional distrust of SEO which they are only recently recovering from. FooBar's yearly sales are $5 million. Successfully implementing my recommendations regarding SEO and conversion funnels would, conservatively, increase that to $6 million. The marginal $1 million is about 95% profit.

I worked at FooCorp for two weeks. Pretend the client is operating on Google scales, where $1 million is penny ante and barely rates a mention in a weekly summary email. Now pretend that the engineer works for four years. Now pretend that the engineer is provably responsible for at least one 5% improvement in a core revenue-generating Google product (cough only two choices here cough). Now pretend that improvement was highly non-obvious and Google does not believe it would be easy to replicate if they only had a team of genius PhDs and infinite money to throw at the problem. Now pretend that said employee is reasonably expected to do more good work in the future... and just said he wants to go to Facebook.

You tell me, is he really worth $3.5 million?

This article (and all the other web commentary) is silly. In any competent company employees are be valued not by their skills, but by the value they bring to the table. For all we know this guy is a proven contributor and $3.5m is a bargain.

What if this was three years ago, and the person in question was Paul Bucheit? What if by staying, FriendFeed had been a Google property? Would that be worth $3.5 million dollars?

What if it was seven years ago, would it be worth Google paying $3.5 to retain the person who would go on to basically invent AdSense?

Of course it would. Case closed.

So what.. I'm not worth 3.5 million dollars because the money would be "better used" by donating it to whatever cause the author deems respectable? Is that even logical? Where was it written that Google planned to donate 3.5 million dollars and are now not going to because they gave restricted stock to a staff engineer? Oh and how are we supposed to take seriously someone saying that we are probably worth around 100k ~ 500k tops? WTF does that even mean?

It's possible that it's worth $3.5 million to prevent the damage he would do to Google if he worked at Facebook.

Not that he's worth 3.5M to Google per se, but that if he took his skills and knowledge to FB in an area where Google is vulnerable, he could harm Google far beyond that figure.

Say he was the top guy in targeting ads socially or locally at Google, for example. What is it worth to prevent FB from getting a leg up?

I'd also argue that with all the major names leaving recently, you don't want another major name leaving you and bringing the morale down. That alone might be worth $3.5 million.

It is possible for a person to have enough institutional knowledge and skills that make them essentially irreplaceable (possibly someone that is a prominent head of some team who holds enormous control over the future direction of a product). It is the same rational for why CEO's routinely make such amounts of money per year.

It's because the decisions that they make have far reaching consequences, and if the CEO of a company is just a little better, it can snowball into a huge return. It is possible that a person in a position of power could easily represent a change in more than 3.5 million dollars in revenue in a year.

That said, from the personal perspective, I agree completely, no one could possibly ever make better use of so much capital as compared to what it could do when put towards some community venture. But in our system, this is something that the person receiving the money must come to terms with.

It seems like asking this question without ever nailing down what the author means by "worth" is inviting fuzzy thinking. There are plenty of definitions of "worth" whereby a single programmer may be worth 3.5 million, though it is certainly a tall bar to leap. A programmer who is one of a small set of programmers on a project that will make the company many, many millions and whose leaving will at the very least cause an inevitable and significant delay in the rollout may indeed be in a position to negotiate such a payout, but it's an awfully narrow set of circumstances. (Even somebody twice as genius as the first guy will require spin-up time.)

(Everyone's replaceable, but not equally, and not necessarily quickly.)

I think a more important question than the definition of "worth" might be the definition of "we".

I understand this completely because I'm one of those who undervalues themselves. However, I'm quickly realizing that your value is not tied to your abilities. Simply, you are worth as much as you think you are. The final value is what you'll hold out for. If that's 10k, you're worth 10k. If it's 4mil, you're worth 4mil.

Ultimately, it comes down to what you think of yourself.

Who's paying $500,000 for rock stars??

you are worth what someone will pay.

This - and it can't be emphasized enough. There is no such thing as absolute worth.... you are worth precisely what people are willing to pay you for combined with what you are willing to settle for.

The $3.5m is restricted shares. No where does this say this is some kind of salary or bonus.

Being restricted, probably prevent him from selling it except under certain conditions (like company buy back).

Running the numbers:

Projected Facebook IPO value = $35,000,000,000

Facebook ownership offered to Engineer = 00.01%

Value of Facebook offer = $3,500,000

edit: Google counteroffer = $3,500,000

I wish programming was an art and programmers considered artists.

What do you mean "we", white man?

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