Leland Teschler • Executive Editor
On Twitter @ DW—LeeTeschler
The beginning of a new year is often seen as a time for fresh starts. So it may be appropriate that this new year could mark the first time in decades that engineering is considered a lucrative profession.
The lament in recent years has been that the field of finance was attracting a lot of STEM graduates because it paid high salaries to those in analytical jobs, salaries that engineering companies usually couldn’t match. But a recent change in company reporting requirements shows this idea may be changing.
We have the Dodd-Frank Act of 2010 to thank for this development. Among other things, it dictated that in 2018, public companies had to begin releasing what constitutes the total pay for their median employee as part of their filings with the Security and Exchange Commission. They compute this number by totaling up the pay and perhaps benefits (there is some leeway on reporting this) of all their employees excluding the CEO, then taking the average. The resulting number gives a revealing snapshot of pay scales.
Before the rule kicked in, information about salaries could only be estimated from U.S. Bureau of Labor Statistics data which are broad and next to useless. Though it doesn’t break down compensation by job function, the new Dodd-Frank rule is particularly helpful for sizing up companies employing lots of engineers and other STEM grads.
For example, it turns out that some of the highest reported median wages are paid by pharmaceutical companies. Companies that employ a lot of software engineers are right up there with them: The median wage at Facebook Inc. is $240,430. At Alphabet Inc., (parent company of Google) it is $197,274, and the median employee at Netflix Inc. earns $183,304.
The data also show it pays to be in the security software business. The median employee at software security firms Palo Alto Networks Inc. and FireEye Inc. earns $223,885 and $149,283 respectively. In addition, defense and aerospace workers seem to be well compensated. The median at The Boeing Co. is $111,204; at Lockheed-Martin Corp., $123,231; and at Raytheon Co., the median worker makes $144,589.
It’s not uncommon to find firms paying a median compensation above $100,000. When I looked at a database maintained by the media firm Bloomberg LP, I found 204 firms that paid a median wage above $100,000 in 2017. Only 25% of them were in the financial sector. I counted 33 of them in the tech industry. The lesson seems to be clear, at least for software engineers: Competent coders can demand top dollar.
Interestingly, I only found five industrial companies paying a median above $100,000. It seems that the median pay drops a bit for companies that operate production lines. That’s the conclusion you come to from the figures for Eaton Corp., $71,073; Caterpillar, $65,770; Rockwell Automation Inc., $56,192; and Illinois Tool Works Inc., $40,738.
The same can be said for high-tech industries such as integrated circuit fabrication. For example, chip makers Texas Instruments, Microchip Technology Inc., and ON Semiconductor Corp. have median compensation of $78,951, $40,737, and $11,035 respectively.
My guess is that median compensation figures are likely to push more STEM-oriented youngsters toward non-financial careers. One other probable outcome: Numerous employees will hand their boss a copy of the company annual report with the median compensation figure circled and then will announce, “I want the pay of a median employee.” DW
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Filed Under: Commentary • expert insight, Industry + job trends