This isn't right: Google and similar companies pay based on the local market and not cost of living.

London is a great example: high cost of living, low market rates for top talent, low pay from the FAANGs.

Pittsburgh is an example in the other direction: low cost of living, relatively high market rates, relatively high pay from the FAANGs. Still lower than the Bay though.

> This isn't right: Google and similar companies pay based on the local market and not cost of living.

These factors are intertwined.

They're related, but we can pull them apart by looking at examples like the ones I gave where cost of living is high but the market rate is not, and the reverse.

Hasn't this been proven false by googlers living in other high cost cities yet earning significantly less than those in SF?

Yes. And if a Googler (and this is true if most others major tech companies too) transfers from SF or NYC to another market, their salary usually drops. In fairness, the drop isn’t 50% or anything like that. And levels (which define the bonus structure) are still the same.

If a large company was doing a mass-migration of employees to a new, lower-cost city, it might make sense to keep salaries consistent. But let’s not kid ourselves and think that new hires at that new location would still be hired at the SF rate.

And as others have pointed out, if the salary did remain that high and you left, it’s almost guaranteed that your next job would not have that kind of salary.

Personal anecdote: when I moved from NYC to Seattle, I didn’t take a pay cut (I was switching industries), but the recruiter knew my Seattle market-rate was lower than my NYC market-rate. She tried to console me with promises of lower-cost of living (in fact, I pay more in rent now, but in fairness my equivalent apartment in Seattle would be 25% higher in NYC) — which wasn’t really true. But the tax difference was/is so massive, that it really does offset the salary difference, even at market rate. And if I were to transfer from Seattle to NYC, I would insist on getting a pay increase to offset those higher costs.

I don’t like employers lowering salaries if an employee moves to another lower-cost city (mostly because in many cases they are already paying hire taxes in those expensive markets and it feels punitive to get to pay less taxes and a lower salary for the same work/person), but it’s very common. That said, I don’t think it’s possible for very large companies to follow the Basecamp approach of universal salary structure based on being in the top X% of SF median or mean salaries (I forget which). As nice as that is for a smaller company, if you’ve got 100,000 employees (not counting contractors) potentially paying people 4x market rate doesn’t make sense and it doesn’t scale.

That said, there are always exceptions. If a person is valuable enough to the business, that person can get whatever salary they want regardless of location.

Is the bonus structure really identical in all markets? I've observed a >10x difference in initial equity offers in different markets at GOOG, so I'd be surprised if the other equity compensation is identical across markets.

It gives the employees leverage during negotiations [0] but it doesn't influence the revenue because Google is a international company, the domestic SF market only represents a small part of the revenue Google receives.

[0] "I wont move to SF if you dont give me enough to pay rent"