Tech Compensation: Levels, Roles, and Location Define Wages, Not Just Absolute Figures

San Francisco, CA – Deedy, a prominent voice in tech compensation discussions, recently clarified on social media that "Level 4 wages are decided by job code group and location, not absolute comp." This statement underscores the intricate and structured nature of compensation within the technology industry, particularly for major companies that utilize detailed job leveling systems. The tweet highlights that a simple total compensation figure, or "absolute comp," does not fully explain an employee's earnings without considering their specific role and geographical base.

Large technology corporations, including giants like Microsoft, Google, and Meta, employ multi-tiered job leveling frameworks to define roles, responsibilities, and corresponding pay scales. These levels, often ranging from entry-level to distinguished engineer or fellow, dictate the salary bands, stock grants, and bonuses an employee can expect. For instance, leaked Microsoft salary charts, previously shared by Deedy Das, illustrate compensation structures across various levels, from Level 57 to Level 70, where total packages significantly increase with seniority.

Beyond internal job levels, an employee's "job code group" plays a crucial role in wage determination. Different professional tracks, such as software engineering, product management, research science, or data analysis, have distinct compensation profiles reflecting market demand, skill scarcity, and strategic importance to the company. This specialization means that even at the same level, an AI researcher might command a different compensation package than a general software engineer due to the current intense competition for specialized AI talent.

Furthermore, geographical location is a significant factor in tech compensation. Companies adjust wages based on the cost of living and local market rates in different regions, leading to substantial disparities in pay for similar roles performed in, for example, Silicon Valley compared to other tech hubs or remote locations. This localized approach ensures competitiveness within specific talent markets, moving beyond a uniform "absolute comp" across all locations.

The emphasis on job code groups and location over a singular "absolute comp" reflects a sophisticated approach to talent management, aiming to attract and retain specialized professionals within competitive markets. It illustrates how total compensation packages are meticulously calibrated, taking into account an employee's specific contribution within a defined role and the economic realities of their working environment.