When you think “old school” technology companies, your thoughts likely drift to some of the stalwarts that have been around for decades—companies such as IBM, Oracle, Microsoft, and Apple.
If you happened to land a job at one of those companies a few decades ago, you’re likely doing pretty well, financially, thanks to the magic of rising stocks. But not all companies have the same philosophy when it comes to compensation, and it’s worth comparing these “old school” firms to see how they treat their senior software engineers, financially speaking.
For this brief exploration, we enlisted the services of levels.fyi, which crowdsources salary data from major tech firms. While crowdsourced self-reporting isn’t an ultra-scientific method of data collection, levels.fyi data seems to align with salary information posted on Glassdoor and other sources, suggesting that it’s offering a pretty good estimate of what software engineers actually earn.
With all that in mind, let’s compare senior software engineer salaries for IBM, Oracle, Microsoft, and Apple. We didn’t focus on the engineering roles at the pinnacle of each corporate hierarchy (such as Microsoft Technical Fellow or IBM/Lenovo Fellow) because relatively few people occupy those roles; we wanted to aim for tiers slightly lower down, where more senior software engineers accumulate. Without further ado:
What can we conclude from this chart? IBM seriously lags the other firms when it comes to payouts—salaries are lower, and bonuses and stock seem virtually nonexistent compared to what’s on offer at Apple and Microsoft (Oracle also seems to offer low bonuses, although it pays out pretty generous equity).
Perhaps this shouldn’t come as a surprise. Last month, we analyzed entry-level software engineer compensation, and IBM lagged on that end of the scale, too, for the same reasons: While its rivals shelled out generous stock and bonus cash, IBM seemed content to give its starting engineers relatively paltry sums. Check this out:
According to data from Glassdoor, IBM’s entry-level software engineers make $85,362, which is even less than the levels.fyi estimates. And Indeed went still lower, pegging “beginner” IBM software engineer salaries at $81,002 (although its sample size was small).
However, things are a little bit more ambiguous at the higher end of the scale. Senior software engineers and other technology professionals with specific skill-sets can earn quite a bit more than these posted numbers, provided those skills align with what the industry really needs at the moment.
Even if IBM doesn’t pay its senior software engineers as much as other firms, for instance, it’s willing to pay out millions to professionals who specialize in machine learning and artificial intelligence (A.I.), which the company views as absolutely crucial to its future. Two years ago, Tom Eck, the CTO of industry platforms at IBM and a software developer who has been involved in A.I. as far back as the early ’90s, told the audience at the Markets Media’s Summer Trading event in New York that top-tier A.I. researchers “are getting paid the salaries of NFL quarterbacks, which tells you the demand and the perceived value.”
(Just in case you don’t follow NFL salaries, the implication here is that these A.I. specialists are earning millions.)
In a similar vein, Google once paid autonomous-driving engineers so much that they began to retire rather than drag themselves into the office every day. “Early staffers had an unusual compensation system that awarded supersized payouts based on the project’s value,” Bloomberg reported at the time. “By late 2015, the numbers were so big that several veteran members didn’t need the job security anymore, making them more open to other opportunities, according to people familiar with the situation.”
So specialization can really pay off. For the most part, though, it’s clear that IBM lags when it comes to overall compensation for software engineers—and that’s even before we get to other issues facing Big Blue.