It's not. Netflix has a revenue per employee figure in the $2m+ range. That's investment bank levels of revenue, and $400k is about what you make at an investment bank 5-7 years out.
Software companies are making investment bank levels of money these days, so why should it be surprising when software developers are getting paid like investment bankers? What should be more surprising is software companies making $1m+ per employee where developers aren't paid like that.
You can easily get 300K after a couple of years at a big company (e.g. AmaGoogAppBookSoft as patio11 likes to put it). You do not need to be an especially talented engineer at such places to draw those salaries.
I certainly wouldn't turn down a higher salary, but it's one thing to say that higher salaries ought to be normal, and quite another thing to say that $400k "is not a jaw dropping amount" - based not on software industry practices, but on one's expectations about what software salaries ought to be, coming from practices in some other, unrelated industry.
In the software industry, no matter what one thinks the situation ought to be, the current fact of the matter is that a salary of $400K would be very unusually high, and so I am taking issue with rayiner's assertion that "it's not jaw dropping". It might be reasonable to say "it shouldn't be jaw dropping", based on the principle you're describing above, but that would be a different claim.
But $400k of $2m calls for 20% profit margin for salaries alone. So unless the average (accounted for C level compensations) is much lower, we are easily looking at 50% profit margins when business costs are added. I would not call that competitive
This has got to be one of the most ridiculous, out of touch things I have ever read on HN.
You can't on one hand go on about market forces etc etc and say that because Netflix's RPE is high its employees should be paid for. RPE has absolutely no bearing on the value individual employees bring to Netflix.
I have no doubt that there are developers at Netflix making $400k+. To imply that it's not a jaw droppingly large amount of money for a software developer to make is borderline insanity.
As a software developer, I find your comment to be the most ridiculous.
Yes, it's on a higher end compared to what you would normally see but I would say that the regular salaries are too low. As a software developer, we have the capability to generate tremendous amount of value. Currently, most of the value is captured by C level executives (getting paid millions). Why should software developers not getting more in proportion to the value they add?
Compensation is based on competition for the limited supply of top developers. High RPE businesses are, by definition, ones that can make a lot of money with a limited number of people. More importantly, they are businesses in fields where their competitors can do the same. Accordingly, it is totally unsurprising that high RPE businesses pay their employees lots of money, whether we are talking about software companies or investment banks.
