Reddit Salary Negotiation

Reddit has been discussing its potential IPO for years now, but many people are wondering if this is still on track. Everything we've seen indicates the IPO is only a few months away, and the company is optimistic about its $15B valuation target (previously valued at $10B in Aug, 2021). Even prior to going public, Reddit has been preemptively adjusting its compensation packages. In particular, equity vesting periods and negotiation policies both had major updates in 2021. Previously, Reddit refused to negotiate compensation and would only move on leveling, but now they are open to negotiating if you play your cards right.

The goal of this guide is to equip you with the essential pieces of information you need for your upcoming Reddit negotiation. If your situation is unique or you want 1:1 support to ensure you maximize your compensation, sign up for a free consultation with our negotiation team.

Table of Contents

• Reddit Offer Compensation Components
• Reddit Negotiation Process
• Reddit-Specific Negotiation Advice

Reddit Offer Compensation Components

Before you start negotiating with Reddit, it is important to make sure you fully understand the compensation components that will be offered. Reddit offers should contain the following components:

• Base Salary
• RSUs - Restricted Stock Units
• Signing Bonus

Below is an example offer from Reddit for an IC5 Staff Data Scientist.

Base Salary

After the change in compensation policies at Reddit at the beginning of 2021, base salaries have become far more competitive than they once were. For example, when looking at base salaries offered for IC3 Software Engineers at Reddit in the Bay Area in 2019, the base salary range was $115k - $140k. After the recent shift in compensation, the base salary for IC3 Software Engineers at Reddit in the Bay Area is now $170k - $190k.

When comparing these updated base salary numbers at Reddit for IC3 SWE to Apple's ICT4 (which is the equivalent level), the numbers are similar. The range for Apple is between $170k - $210k, which is justified since the level is wider at Apple than it is at Reddit.

Equity - RSUs

Reddit is currently offering RSUs even though it hasn't gone public yet. This isn't unheard for large private companies and currently TikTok and Databricks have very similar policies. The way this works is that Reddit gives you a lump sum grant amount that is converted to a specific number of shares based on the latest valuation.

Reddit's stock vests evenly over 3 years, so when comparing to a company that offers 4-year equity grants (the standard vesting schedule), make sure you're comparing apples to apples. As an example, if you are offered a $450K equity grant at Reddit, you would receive the following:

• Year 1 = $150,000 (33%)
• Year 2 = $150,000 (33%)
• Year 3 = $150,000 (33%)

Reddit equity vests quarterly and unlike other some big tech companies (e.g. Amazon), it does not have a cliff. This means you will receive your first set of shares at the 3-month mark vs the 1-year mark.

Signing Bonus

Signing bonuses are rare at Reddit, but not impossible to get. If sufficient leverage is provided, you can get a signing bonus added to your offer. The optimal way to do this is to use leverage that's an appropriate one-to-one comparison with the signing bonus.

What Not To Do: Leverage a higher base salary from a competing offer to get a signing bonus. This may seem like a fool-proof plan, but if you follow this path, you'll end up losing money in the long run. Remember that any difference in the base salary between the offers needs to be calculated over 3 years (due to Reddit's vesting period), so that difference should be made up for either in the base or in the equity grant. Otherwise, you could risk losing two thirds of the value of this difference.

What To Do: Leverage a competing offer's signing bonus, an upcoming annual bonus, or retention bonus at your current workplace. These are all one-time-payments, which makes them ideal leverage for negotiating an increase in your signing bonus. It's also possible to frame these as "lump sum cash amounts" without needing to get into the details of equity cliffs or performance bonus multipliers.

Performance Bonus

As of 2021, Reddit does not offer a cash bonus. This should be taken into account when comparing the base salary with other companies that have very predictable cash bonuses (e.g. Google, Stripe).

Stock Refreshers

Historically, Reddit has not had a structured stock refresher program, but again, this changed in 2021. While this update will certainly affect the long-term value of Reddit's offers, it's too early to officially confirm multipliers and target percentages. Once a formal round of refreshers is given out, we will be able to assess the exact value they'll add to your offer.

Based on the recruiter and hiring manager conversations we've had, expect the annual target to be lower than Facebook and Google's 25% of initial equity grant. These refreshers will stack though, which is certainly better than the policies at Coinbase and Stripe.

Reddit Negotiation Process

Candidates often find it helpful to have a high-level overview of the negotiation process. However, this does vary by candidate, with one key vector being seniority. It's helpful to split into junior (IC1 - IC3) and senior levels (IC4+). Here is a quick overview of Reddit's levels:

• IC1 - Software Engineer I (often new grads with Bachelor or Master's degree)
• IC2 – Software Engineer II (incl. new grad PHDs)
• IC3 - Software Engineer III
• IC4 - Senior Software Engineer
• IC5 - Staff Engineer
• IC6 - Principal Engineer
• IC7 - Distinguished Engineer

If you have not yet received an offer from Reddit, there are a few critical mistakes to avoid:

1. Do not share your current compensation. In many states (e.g. California) it is illegal for companies to ask this, so you are certainly within your rights to say "I do not feel comfortable sharing that information".
2. Do not share your compensation expectations. Reddit recruiters will sometimes frame this as "seeing if you are a fit for the role". However, it is in your best interest to deflect this question until Reddit has extended an offer. One possible response is "right now I'm focused on the interview process and don't have a number in mind, but I'm confident we will be able to get to a number that works for both of us".

With that out of the way, let's discuss the process for Reddit IC1-IC3 negotiations.

1. After completing your onsite interview, you will often hear back from your recruiter within a few days. They will say that they have some exciting news for you and ask to setup a call - this is the offer call.
2. Reddit is fairly good about providing an initial number on this call (unlike many FAANG companies). But you should still be prepared if they ask for your expectations. During the offer call, the recruiter will ask you how you feel about the offer and discuss timelines. Reddit is known for pressuring people to accept a timeline of one week or less, so be careful to set expectations appropriately for how much time you'll need to make this decision.
3. We recommend you take a day to digest the initial offer and consider the best point of leverage for your counter offer discussion.
4. You should then setup your second call with the recruiter to discuss the offer. On that call you will disclose your counter offer. The recruiter will likely push back. At Moonchaser, we build a tree diagram unique to your situation with the most likely objections and the optimal responses to those objections. The goal is to get the recruiter to take your counter-offer number back to the team.
5. Typically, you will hear back in a few days with their "final" offer. It is possible to continue the negotiation at this point, but it often requires new information (e.g. you just received a higher Facebook offer).

There are two primary differences between junior and senior negotiations at Reddit:

1. Senior employees are likely to see fewer pressure tactics compared to junior employees. For example, timelines will not be as harshly enforced. Generally speaking, recruiters working with these candidates provide more of a white glove service.
2. Recruiters will push you more to give them an initial number, rather than providing an offer. Given the importance of senior leaders and the wide range of the salary bands, they are typically hesitant to risk losing a candidate. This means the first number you provide is very important for anchoring the negotiation.

Can I Lose my Reddit Offer by Negotiating?

This is far and away the number 1 question Rora’s career partners are asked. It is a very common and valid fear, especially in today’s volatile economy. But what’s the actual probability that, when negotiating with Reddit, they would decide to pull the offer?

First, let’s discuss what benefits it would have for Reddit to rescind the offer. The primary reason a hiring manager would elect to rescind an offer would be a fear of liability with their intended hire - i.e., this hire may cause a scandal, this hire will in no way be able to perform their duties, this hire will be detrimental to Reddit, etc. Aside from that, by the time an offer has been extended, Reddit has already invested a substantial amount of time and money into the candidate they’re giving an offer to, and should have a solid understanding of how this candidate will perform in the role. It would be a net loss for the company to go through all those interviews, conversations, and putting together the offer to then decide that they want to cut ties with the candidate – this is something they try to de-risk before giving an offer. 

Even in this economy, we have seen clients get increases in their offers from companies of all sizes by making respectful and well-reasoned requests. It’s very unlikely a company would pull the offer based on negotiation - in our experience, we’ve seen this happen less than 0.5% of the time. And that includes companies that are on hiring slowdown/freezes right now.

Now, there is a fundamental difference between getting an offer rescinded and losing the offer due to headcount. A headcount loss is solely based on the state of Reddit and the necessity of the role within the team. This isn’t common but can occasionally happen if needs at the company shift – and is more common with earlier-stage startups. It is not reflective of your interview performance or skill level, and oftentimes companies will try to keep in touch with you and share other opportunities once headcount opens up. If your offer was rescinded, the company would not have any interest in keeping you warm. 

Regardless of the low likelihood of getting an offer rescinded, we know that this is a very common fear – and one that often holds candidates back from negotiating! To help mitigate the risk (and increase your confidence while negotiating) - follow these dos and don’ts to lower the probability of your offer getting rescinded:

1. Do keep it professional - avoid getting into politics or making jokes that may be poorly received and make your hiring manager think you might be a liability to the company
2. Do give justification and reasoning behind your ask for increased compensation – this could be based on your market value, another opportunity you have, specific expertise you bring to the table, or the strong relationship you’ve built with your hiring manager
3. Do your first compensation ask over a phone call - in most cases we see a higher rate of success and understanding when the first ask is done over a call versus an email
4. Do demonstrate to your hiring manager that you’re a solid candidate who would be a strong hire by creating and collaborating on an impact roadmap (outlining your 30 day, 60 day, and 90 day goals for getting started in your new role and your understanding of the priorities for this position)
5. Do your best to understand the necessity of the role on this team - How critical is it? How long has the role been open for? This can help you determine the likelihood of the headcount being lost – and also the leverage you may have in negotiating

Reddit-Specific Negotiation Advice

Frequently Changing Policies: For many years it was common knowledge that Reddit was unwilling to negotiate. Recently, due to the shift in compensation policies with the upcoming IPO, Reddit has changed its policy on negotiation, and is now willing to negotiate if you play your cards right. Prior to this, the only thing they would negotiate is leveling.

Upleveling: As stated above, Reddit used to only negotiate via upleveling. While this is no longer the case (you can now negotiate comp directly), it is still a useful strategy to negotiate your level in certain circumstances. Be aware that if you push for an uplevel, Reddit may ask that you reinterview. However, you can almost always guarantee that your initial offer isn't at risk.

Tight Timelines: Always be mindful of timelines when negotiating with Reddit. They will frequently add pressure to situations by setting a timeline of 5 business days or fewer to accept the offer. This is unfortunately a common tactic used at many companies to help convince candidates to accept mediocre offers. In the past, we've seen Reddit offer 7 business days to make a decision then turn around and make it a 3-day deadline after increasing the numbers slightly. Be clear about your other timelines, and make sure to develop your recruiter and hiring manager relationships so they'll advocate for you with the team.

Unique Benefits: One fun thing about Reddit is the perks they offer, including a unique type of leave. They now offer employees a week of paid time off when getting a new pet. This is to help employee morale and encourage them to bond with their new family member, while also giving the family some grace as they adjust to this big life change.

Unable to match: Reddit will frequently use the excuse that they are a private company to justify not matching FAANG offers. This can be tricky to pushback on. We've found two things can make a big difference when you run into this 1) hold your ground and continue to ask how-based questions regarding the gap between Reddit and other companies 2) bring leveling into the conversation to unlock new pay bands