Do you fancy quitting your banking technology job and joining an exciting 'tech start-up?' Maybe - until you see the pay. The discrepancy in compensation for technologists at big companies and start-ups has been known for a long time, but a new salary tool from Otta highlights just how wide the gulf really is.
Otta tracks salaries at "innovative" companies in London, including Slack, Revolut and Deliveroo. Users are encouraged to submit salaries themselves and data is subsequently verified by Otta, which produces an average salary per role. The averages are shown in the chart below. The site has around 3,000 data points so far.
As the chart shows, you'll be hard-pressed to achieve a salary in excess of £100k at a London tech start-up, even if you hang around for years. - Only a select few at leadership level get these kinds of amounts. By comparison, insiders say U.S. banks in London pay £100k salaries to vice president level technologists after around five years' in the industry.
Banking technologists say the big salary discrepancy with the start-up sector is a huge turnoff, and prevents people from venturing into it. "It's widely known that start-up pay is awful in general," says one.
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Of course, salaries aren't the big draw at start-ups: in theory, they're all about the stock options that could make you rich if the company goes public or is bought-out. Former Moelis & Co. analyst Theo Margolis who founded Otta says, senior hires can expect to receive options equal to up to 1% of the value of the equity if the start-up is at the pre-seed financing stage, but that this drops to 0.02-0.2% if you join a start-up at a Series C funding round.
However, in the current environment there's less certainty that start-up options will ever be worth anything. "You need an exit, which only something like 15% of start-ups achieve," says te senior banking technologist. "I bet it's worse now."
Suddenly, therefore, the certainty of a high salary for a technology job at an investment bank looks comparatively more appealing. Particularly as it's supplemented by bonuses of 10% to 20% of salary in any normal year (presuming we get more of those). Insiders say base salaries for vice president (VP)-level developers with four years'+ experience in banks in London typically top-out at £120k, and senior VPs with more experience can expect £150k+ when bonuses are added too.
Some banks are more generous than others. Most notably, Goldman Sachs now pays £100k in combined salary and bonus for first year technologists in London who have Master's degrees.
Photo by Jeff Finley on Unsplash
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