By Sarah McBride
SAN FRANCISCO, Oct 13 (Reuters) - Among Twitter Inc'shighest-paid executives, Christopher Fry's name stands out.
The senior vice president of engineering raked in $10.3million last year, just behind Twitter Chief Executive DickCostolo's $11.5 million, according to Twitter's IPO documents.That is more than the paychecks of executives such as ChiefTechnology Officer Adam Messinger, Chief Financial Officer MikeGupta and Chief Operating Officer Ali Rowghani.
Welcome to Silicon Valley, where a shortage of topengineering talent amid an explosion of venture capital-backedstart-ups is inflating paychecks.
"The number of A-players in Silicon Valley hasn't grown,"said Iain Grant, a recruiter at Riviera Partners, whichspecializes in placing engineers at venture-capital backedstart-ups. "But the demand for them has gone through the roof."
Stories abound about the lengths to which employers will goto attract engineering talent - in addition to the freecafeterias, laundry services and shuttle buses that the Googlesand Facebooks of the world are already famous for.
One start-up offered a coveted engineer a year's lease on aTesla sedan, which costs in the neighborhood of $1,000 a month,said venture capitalist Venky Ganesan. He declined to identifythe company, which his firm has invested in.
At Hotel Tonight, which offers a mobile app for last-minutehotel bookings, CEO Sam Shank described staging the office toappear extra lively for a prospective hire. He roped in twoemployees for a game of ping-pong and positioned another groupright by the bar.
It worked: the recruit signed on and built a key piece ofthe company's software.
In Fry's case, his compensation came mostly in the form ofstock awards, valued last year at $10.1 million, according toTwitter's IPO documents registered with securities regulators.He drew a salary of $145,513 and a bonus of $100,000.
Some might call that underpaid. Facebook Inc's VP ofengineering, Mike Schroepfer, took in $24.4 million in stockawards the year before the social network's 2012 initial publicoffering. He also drew a salary of $270,833 and a bonus of$140,344. But Facebook that year posted revenue of $3.71billion, 10 times more than Twitter's $317 million.
Grant said more than three-quarters of candidates who tookVP of engineering roles at his client companies over the lasttwo years drew total cash compensation in excess of $250,000.Many also received equity grants totaling 1 to 2 percent of thecompany, the recruiter added.
LORE OF 10X
The hot demand for engineers is driven in part by a growingnumber of start-ups, venture capitalists say. Some 242 Bay Areacompanies received early-stage funding - known as a seed round -in the first half of this year, according to consultancy CBInsights. That is more than the number for all of 2010.
Another factor is the increasing complexity of technology.Many in Silicon Valley like to discuss the lore of the "10x"engineer, who is a person so talented that he or she does thework of 10 merely competent engineers.
"Having 10x engineers at the top is the only way to recruitother 10x engineers," said Aileen Lee, founder of CowboyVentures, an early-stage venture fund.
Former colleagues said Fry, who joined Twitter earlier thisyear, fits the bill. The messaging service poached him fromsoftware giant Salesforce.com Inc, where Fry had workedin various positions since 2005, rising from engineering managerin the Web Services team to senior VP of development.
Perhaps most attractive to Twitter is the fact that Fryjoined Salesforce when it was also a 6-year-old company with bigambitions of taking on the software establishment. At that time,Salesforce's product development needed help, Fry has said inprevious interviews. He whipped them into shape, helping buildthe company into one of the hottest enterprise-softwareproviders in the industry today.
Twitter has had its share of technical problems, such as thenotorious "fail whale" that regularly appeared on screens duringoutages. That made Fry's experience all the more valuable.
"All it takes is a couple of bad incidents where Twitter isdown, or there's a security breach. That could be the end of thecompany," said Chuck Ganapathi, an entrepreneur who previouslyworked with Fry at Salesforce, where he was senior vicepresident for products.
"You need somebody of this caliber to run it."
Neither Twitter nor Fry responded to requests for comment.
PERSONAL DRUM STUDIO
Today, even entry-level engineers can draw lucrativesalaries in the Valley. Google Inc offered $150,000 inannual wages plus $250,000 in restricted stock options to snag arecent PhD graduate who had been considering a job at Apple Inc, according to a person familiar with the situation.
The average software engineer commands a salary of $100,049in Silicon Valley, according to Dice, atechnology-recruitment service. That is down from $113,488 lastyear, due to an increase in hiring of less experiencedengineers, said a Dice spokeswoman.
By comparison, the average salary for all professions in SanFrancisco's Bay Area is $66,070, according to the Bureau ofLabor Statistics. Other jobs in the area can command higherwages - physicians make $133,530, a lawyer about $174,440 and acivil engineer makes $107,440 - but the tech industry oftenoffers restricted stock or options on top of salaries.
Even for plain-vanilla engineers, competition is intense,said Dice CEO Mike Durney, leading companies to go to greatlengths to attract and hold onto the right people.
Accommodation-search service ApartmentList rents a drumstudio on an ongoing basis to help retain a key engineer, saidCEO John Kobs.
In one of the better-known examples, Google famously allowedengineers to devote 20 percent of their time on personalprojects. It is worth it, many recruiters and industryexecutives say.
Many of the most talented engineers bring more thanprogramming chops, promoting the sort of career diversity prizedin Silicon Valley.
Take Fry, who earned a PhD in cognitive science from theUniversity of California at San Diego in 1998. He is a surfer, asailor and a snowboarder, according to his personal website.
In a fitting twist for Twitter, known for its blue birdmascot, Fry also has avian expertise. His postdoctoralfellowship at the University of California, Berkeley, focused onthe auditory cortex of zebra finches.
- Venture Capital
- Employment & Career
- Silicon Valley