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Key Takeaways AI startups are increasing base pay to attract top talent.
Software engineers at venture-backed startups are now paid a median base salary of $200,000, a 25% increase from 2022, per salary data platform Levels.fyi.
One recent graduate was offered $400,000 in base salary for a software engineering position.
Silicon Valley is known for its lavish perks to attract top talent, such as nap pods and free slippers in its “no shoes” offices. Now, as competition for top AI talent intensifies, startups are turning to a more straightforward incentive to win talent wars: exceptionally high compensation packages.
Levels.fyi, a platform for salary data, reports that software engineers at venture-backed startups are now paid a median base salary of $200,000, a 25% increase from 2022. In some instances, recent computer science graduates are receiving offers exceeding $300,000 a year. These compensation levels were once reserved for veteran engineers at major tech companies, Chris Vasquez, CEO of the startup recruiting firm Quantum, recently told The Wall Street Journal.
“Prior to this, I’d probably never seen anyone over $300,000 on base salaries at seed companies,” Vasquez said. Now, “they’re able to take home FAANG [Facebook, Amazon, Apple, Netflix, Google]-level cash comp.”
Vasquez also noted that he has begun to see performance-based cash bonuses at several startups. Workers who hit certain milestones could reap cash bonuses equal to 30% of their salaries, he said.
Meanwhile, recent computer science graduates from top-tier schools with only one or two years of experience are seeing salary offers between $250,000 and $300,000, according to Vasquez. A few years ago, the same positions would offer base salaries closer to $170,000, he said. He gave the example of a math competition winner with nine months of professional experience who received $400,000 in base salary for a software engineering position. In another case, an MIT graduate received an entry-level software engineering role that pays $220,000 in base salary.
Why startups are offering higher salaries
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