What is the Typical Total Compensation for a VP of Engineering in Mid-Sized Pre-IPO Software Companies in the Bay Area?

In 2023, the total compensation for a Vice President of Engineering (VPE) in mid-sized pre-IPO software companies in the Bay Area typically falls within a range. This compensation includes base salary, bonuses, and equity compensation. VPEs often see a base salary ranging from $150,000 to $250,000 per year, with bonuses between 10% to 30% of the base salary. Additionally, stock options or restricted stock units (RSUs) contribute significantly to the total compensation.

Total Compensation Breakdown

1. Base Salary:

$150,000 - $250,000 per year

2. Bonus:

Annual bonuses can range from 10% to 30% of the base salary, contingent on company performance. This can add between $15,000 to $75,000 to the total compensation.

3. Equity Compensation:

Stock options and RSUs are commonly offered. These can vary greatly in value based on company growth and IPO timeline. Estimated value ranges from $50,000 to $200,000 or more.

Additional Factors Influencing Compensation

The actual compensation can vary significantly based on several factors, including the specific company, individual experience, and negotiation tactics. Benefits such as health insurance, retirement contributions, and other perks also come into play.

The following is a hypothetical guestimate for a typical VPE role:

$160,000 base salary 13% bonus 6% of an option pool available immediately without vesting, vesting over 2 years for the remaining shares Additional incentives for successful non-provisional patent wins, tech leadership community representation, team management, hiring velocity, team diversity, and direct/indirect ratios

Industry Insights from a Former Bay Area Start-Up Worker

A seasoned professionals in the Bay Area have observed that a VPE's base salary is often in the range of $200,000 to $300,000. However, the total compensation is highly contingent on equity, which can be zero until a liquidity event. Due to the speculative nature of such ventures, the value of equity can fluctuate greatly. Furthermore, some companies offer lower base salaries in exchange for more equity, or they may operate in niche fields that do not pay as much.

Overall, a VPE's compensation can provide a sufficient starting point for evaluation, but individual circumstances and negotiation play a crucial role in final compensation.