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Read at your own risk. Do not continue reading if you do not accept full responsibility for all actions you take as a result of reading this book. The author is not liable for any damages including, but not limited to, academic failures, career path mistakes, financial loss, feeling upset, and physical/mental injury.
In terms of academics, senior year is simply an extension of junior year. Keep exploring more electives, especially the highly-recommended courses in the previous chapter. The biggest departure from previous years of college is the full-time job search.
Applying for a full-time job is similar to applying for internships. Come up with a company list and start applying in August and September. Focus on getting referrals and meeting recruiters in person. Never apply online unless it’s your last resort. Identify suitable companies early, and use the effective networking techniques from chapter 17 to land interviews.
After you get technical interviews, you just have to do well in them to get job offers. If you’re well-prepared and can solve medium and hard Leetcode problems, then you should do well and end up at a top-tier firm. If you aren’t fully-prepared, you’ll still do fine and end up at a middle-tier firm. That’s all there is to getting a full-time job offer: network well to get interviews, and solve the technical interview problems to get an offer.
The pinnacle of your college career is getting the job offer. It is the moment you’ve been waiting for. You get to hear about what kind of work you’ll be doing and more-importantly, all the compensation and benefits you’ll receive in return. Your compensation and benefits matter a lot so in the next few sections, we’ll go over all the different components of a job offer.
All job offers include compensation: the assets you get to keep for yourself. The common types of compensation are base salary, stock grants, stock options, and bonuses. Furthermore, we’ll discuss two factors that improve or dilute your compensation: stocks versus cash, cost of living, and work-life balance.
Base salary is straightforward: the cold hard cash you get per year. Salaries are usually paid weekly, biweekly, semimonthly, or monthly.
Many public companies offer stock in the form of restricted stock units (RSUs). RSUs are typically subject to a vesting schedule. For example: if you vest 1000 RSUs over 4 years, then you’ll get 250 shares every year you work. If you vest 250 shares and the stock is worth $100, then you effectively receive a $25,000 bonus. If you leave the firm before all shares have vested, then you forfeit all the remaining shares.
It’s important to note the RSU component of your offer is usually calculated off the stock price when you start working at the company, not when you accept the offer. You might receive a full-time offer for $100,000 worth of RSUs vesting over four years, accept the offer in September and set a start date in June the next year. If the stock price is $200 in June, then you receive $100,000 / $200 = 500 shares over 4 years. If the stock price is $100 in June, then you receive $100,000 / $100 = 1000 shares over 4 years. Make sure to read the fine print in your offer letter and understand all the details.
Many companies offer stock in the form of stock options. Like RSUs, stock options often follow a vesting schedule as well. Unlike RSUs, a stock option doesn’t give you the stock, but rather gives you the right to buy shares of a company at a specified price within a timeframe. For example, you may receive options that expire in ten years and entitle you to purchase 10,000 shares of the company at $10. If you exercise all your options when the stock is worth $11, then you buy all the $11 stock at $10, earn $1 per share, and net $10,000 total for 10,000 shares. Some options may have a clause that causes them to expire 90 days after you leave the company, so be careful when quitting.
Most job offers come with a sign-on bonus, which is a one-time payment of cash. Companies use large sign-on bonuses to incentivize you to join. Because sign-on bonuses do not persist year-to-year, companies prefer them to a higher starting salary or stock grant. Also, read the terms of your sign-on bonus carefully because you may have to return it if you quit before a certain timeframe.
Many companies offer an end-of-year performance-based bonus. Most companies give you a target percentage of your salary. For example, if your salary is $100,000 and you have a target bonus of 20%, then consider that as $20,000 you’ll receive if you do a good job throughout the year.
Public company stocks usually offer more upside than cash. Suppose public company X’s stock is worth $100 a share and you get 250 RSUs per year for four years. Then suppose company Y offers you a $25,000 higher base salary to match the RSU grant. If company X’s stock grows to $110 a share after one year, then the first year RSUs are worth $27,500 and you end up ahead of company Y. Of course, if the stock price tanks, then you end up worse, but stocks of profitable public companies are more likely to increase than decrease.
Stocks become tricky when you deal with non-public companies. In the previous example, if company X were private, your RSUs value increased from $100 to $110, but you cannot sell them easily. You have to search for buyers on the secondary market and if people are willing to buy, they may not offer anywhere close to $110 per share. And if you wanted to exercise stock options to buy 1,000 shares of the company at $90 per share, then you would have to come up with $90,000 of principal because the shares cannot be immediately sold.
Furthermore, there are messy tax implications for private stock. If you receive 250 RSUs of private stock valued at $100 a share, then you have to pay tax on $25,000 of earnings even though you cannot sell the stock. To ease the tax issues, private companies are more likely to offer stock options. You don’t pay taxes on stock options until you exercise the options. If you exercise options to buy 1,000 shares of stock at $100 a share when the company valuation puts the stock at $110 a share, then you earned $10 a share and pay tax on $10,000 of earnings. Most stock options last ten years, by which time startups either IPO, get acquired, or dissolve, and the tax problems disappear; however, if you leave the company, then your options may trigger a special 90-day window after which they expire. Read your contract carefully because if you end up in this situation, then you might have to choose between coming up with all the principal and tax money to exercise options on stock that you cannot sell, or letting the options expire worthless.
Overall, my general ranking for compensation is
For example, most of the time, $10,000 in cash is better than $10,000 in stock options of a company that won’t IPO anytime soon.
High-reputation tech company stocks are first in the list because they tend to appreciate over the four years of the grant. Your stock grant is a fixed number of shares determined by the stock price when you join the firm. If the stock price goes up, the value of your future stock grants appreciates too, even though you haven’t received them yet. This leverage is valuable in stable, established companies with market dominance, multiple lines of business, and top talent. They are less likely to run into catastrophe, and when they do, they usually recover. The stock upsides outweigh the downsides.
Cash comes second because there is no risk. You get the exact dollar amount you’re promised, but there’s also no upside. You can invest your cash in high-reputation tech company stocks, but you can’t do so until you receive it. You miss out on the leverage of a four-year stock grant.
Medium-reputation companies, recent IPOs and soon-to-IPO companies come third due to instability. They may have a single line of business and tank if any disruption occurs. They can’t attract top talent as well as high-reputation firms and may have toxic leadership that drags the firm down. Stock prices are also volatile for soon-to-IPO companies. Damaging information can turn up as third parties audit the firm and you also have no idea whether the public will gobble up or ignore the stock. It’s more of a 50-50 coin flip as to whether stocks in the third category of firms will appreciate or depreciate.
Finally, the value of stock at a company far from an IPO is heavily discounted. Further rounds of funding can dilute your grants, you can’t convert illiquid stock to cash for an emergency need, and if the company shuts down then your stock is worthless. Given that most startups do fail, you should be extremely confident the company will succeed and/or get extra stock options to balance out the downsides.
These are general guidelines and may not hold true for all situations. Be sure to do your own analysis of your job offer and decide for yourself.
Cost of living can greatly dilute your compensation, so factor in where you have to live to work for a company. For example, earning $100,000 and paying $40,000 in rent is worse than earning $80,000 and paying $10,000 in rent. The California Bay Area and New York City are notorious for sky-high rent. Although your compensation in those areas is significantly higher than in other cities, your net income could be less. When comparing job offers, be sure to equalize based on the cost of living. You can search on Google for “cost of living multiplier” and apply that to normalize between job offers in different cities.
Just as you don’t want to pay too much for cost of living, having to slave away for your employer also dilutes your effective compensation. For example, earning $100,000 a year but working 80 hours a week is worse than earning $80,000 a year and working 40 hours a week. If you care about the $20,000 difference, you can easily find a second 40-hour-per-week job that pays more than $20,000 a year. Gauge work-life balance by asking your interviewers about their work hours. You can also read online reviews and ask on forums such as Reddit and Team Blind.
Beyond your typical salary, stock, and bonus compensation, companies also offer benefits with real tangible value.
Some companies offer free meals, which save you money on groceries and takeout. The amount each person spends on food a year varies based on how much they cook versus order takeout. You can ballpark the value of three free meals daily at $10,000 per year pre-tax.
Vacation days are always great: you get paid without having to work. Divide your yearly compensation by the number of days you work per year to price each vacation day. Don’t forget that some companies observe more public holidays, while other companies make up for fewer public holidays with more vacation days.
Some companies offer unlimited vacation; as great as it sounds, unlimited vacation is worse than limited vacation. Traditional companies with limited vacation time allow employees to accumulate days off. When an employee quits, the company must pay for any unused vacation days. Companies specifically use unlimited vacation policies to eliminate the monetary liability.
Furthermore, since you don’t accumulate vacation time under an unlimited vacation policy, you may end up working more instead of less. You won’t feel compelled to take a vacation because there’s no sense of how much vacation time you’re entitled to. At best, you net a few extra days a year compared to someone on a limited vacation policy. You’d be fired if you try to take, say, half a year of vacation on an unlimited vacation policy. Unlimited vacation time is more often a negative than a positive.
Most companies offer a 401(k) retirement account. You can contribute money to your 401(k) and companies often match your contributions up to some amount. For example, you may receive a 50% match up to 5% of your salary. If your salary is $100,000 and you contribute $1,000 to your 401(k), then your company will match you by putting an additional $500 in for free. If you contribute $20,000 instead, then your company will cap their match at $5,000 which is 5% of your salary. You should always max out your 401(k) contributions so price this benefit assuming the maximum contribution.
Profit sharing is an alternative to a 401(k) match. The company sets aside some profits into a pool shared among all employees. At the end of the year, the profit sharing pool is split among employees based on some metric, such as years at the firm or level of responsibility. Each employee’s share of the profits gets put into a retirement account. Profit sharing can be worse than 401(k) matching because if the company has a bad year and doesn’t make a profit then it doesn’t pay anything. To gauge the value of a company’s profit-sharing benefit, you should ask your recruiter for historical data.
Most companies offer some form of health, dental, and vision insurance. These benefits only vary slightly from provider to provider. You can compare insurance plans between companies just by how much they cost the employee each month for the same coverage.
There are a variety of other benefits such as commuter benefits, childcare reimbursement, health and wellness reimbursement, and more. Be sure to look through the entire benefits sheet that accompanies your job offer.
While most companies do not allow interns to negotiate their salary, you can negotiate your full-time offer. Negotiating involves asking a company for more compensation: salary, stocks, and/or sign-on bonus. You can ask for more vacation time or commuter benefits, but companies rarely tailor benefits to individuals and benefits aren’t really worth fighting for either.
There’s never any harm in asking for more; the worst that can happen is your request gets denied. As long as you are reasonable, no reputable company will cancel your offer because you tried to negotiate. If you do get your offer pulled, you probably don’t want to work at that company anyways.
The best way to negotiate is to provide a competing offer that pays more or has extra benefits. Suppose you want to accept company X’s offer, but you want more compensation. If company Y’s offer pays more, you can ask company X to match company Y’s compensation. Companies usually do not engage in bidding wars so a matching offer is the best you can do. If company Y’s benefits also include three meals a day, but company X doesn’t offer any food, then you can ask company X to provide some extra salary or stock to make up for that shortcoming. If you’re reasonable in your comparisons and company X wants to hire you, then they’ll usually accommodate your request.
If you don’t have a competing offer, you can still negotiate. You can argue that you have a specific skill that is worth more to the company. Or you could say something along the lines of, “I really want to work for you. If you could just add $X to my salary/stock/sign-on, then I’ll accept immediately.” Again, if your request is reasonable and falls within the normal compensation range at the company, then your request will likely be granted.
Once you are satisfied with a job offer or have no better alternatives, then you should accept it and pat yourself on the back. You can do whatever you want for the rest of your senior year, so long as you pass your classes and complete your degree requirements. Congratulations on making it this far!