Reddit has been discussing its potential IPO for years now, but with the 2022 date approaching, 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 pre-emptively adjusting its compensation packages. In particular, equity vesting periods and negotiation policies both had major updates in early 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.
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:
Below is an example offer from Reddit for an IC5 Staff Data Scientist.
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:
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 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.
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).
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.
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:
If you have not yet received an offer from Reddit, there are a few critical mistakes to avoid:
With that out of the way, let's discuss the process for Reddit IC1-IC3 negotiations.
There are two primary differences between junior and senior negotiations at Reddit:
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
Step 1 is defining the strategy, which often starts by helping you create leverage for your negotiation (e.g. setting up conversations with FAANG recruiters).
Step 2 we decide on anchor numbers and target numbers with the goal of securing a top of band offer, based on our internal verified data sets.
Step 3 we create custom scripts for each of your calls, practice multiple 1:1 mock negotiations, and join your recruiter calls to guide you via chat.