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High-Frequency Programmers Revolt Over Pay
An anonymous reader writes "Programmers who design and code algorithms for investment banking are unhappy with their salaries. Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions. One such anonymous programmer points out that he was paid $150,000 per year, whereas the software he wrote was generating $100,000 per day."
It isn't that the programmers earn too little it's that their bosses earn too much.
History is so yesterday!
I mean, correct me if I'm wrong here, but the programmer in question agreed to the terms BEFORE he wrote the first line of code.
Shouldn't gripes like these come up before you begin working? Maybe this is part of the problem, non?
Mod me down with all of your hatred and your journey towards the dark side will be complete!
RTFA. They are quitting and going somewhere else. The finance sector is going have to deal with this if they don't want to be massively outcompeted by their own ex-programmers.
FTFA:
"Now some programmers feel used and are instigating a revolt.
They are doing so by striking out on their own or forming profit-sharing arrangements."
That's hardly "whining," in fact it's precisely what they ought to do.
The outstanding part is that Forbes is recognizing this. We all know that folks in IT are underpaid in many professions, but the proof is when people actually say "fuck you" and go work elsewhere. That will *force* salaries up to the real market rate. And when publications like Forbes notice this, it's harder for managers to pretend it's not happening.
Thank you, to the ladies and gentlemen who struck out on their own, and thank you to Forbes for noticing. Both of these will make life a little better for the rest of us.
I think that something really important to remember in all this is they live in NY. You pretty much have to divide their salary by half to get an equivalent salary anywhere else in the US.
Even with that in mind, I think the real problem isn't that the programmers should make more, it is that the traders should make LESS. Whining about not being able to take advantage of rigging the game to funnel money to yourself like your superiors do shouldn't get you any sympathy.
"Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions."
A Nascar Driver's pit crew recieve a low 5-figure salary while their bosses - who use the cars to win races - often earn millions.
I get why the programmers are disgruntled, the code they write makes a lot of money and they aren't getting a huge cut, but it seems like the algorithm the program is based on would be the most important aspect. Besides, $100,000 a year doesn't seem that bad to me.
Sent from my iPhone 5
I agree here. Does the algorithm do everything on its own and the programmer's bosses have no input? I'll bet the software is a very small piece of the money-making picture. Was the programmer provided with any resources to write that algorithm? Could the programmer write the algorithm on his own, freelance style, and sell it to the company? I doubt it. Maybe these programmers deserve a raise, and the bosses probably get paid too much, but this is a one-sided story.
There are more things in heaven and earth than are dreamt of in your philosophy.
Algorithmic trading is not effective if you have to pay commission on your trades. Their software only works if it's used by a corporation with
1) network connections to stock exchanges
2) seats on those exchanges, which allows stock to be traded directly instead of through a broker
It annoys me like hell that people use this kind of arguments.
Maybe they are excellent programmers, but bad business men. It doesn't mean they deserve to have their blood sucked from them.
If you shift all the income from the workers to the managers, everybody will want to make business, and there'll be nobody left to do some work.
Yes, and I am the IT Manager who makes sure that the bankers and analysts have the hardware, software and comms tools to do their jobs. Right down the corridor is Michael's room - he's our maintenance guy - if he didn't empty my bin, keep the area tidy and make sure the lights stay on...
AT&ROFLMAO
Those programmers and those brokers are doing nothing of worth to society. They are just playing games with currency. If our government wasn't in complete collusion with Wall Street, millisecond trading would be illegal. The issue isn't that the programmers aren't making enough money, it's that their jobs and the jobs of their bosses should not even exist.
Ceci n'est pas une sig.
Let's see: financial giants, capable of spending hundreds of millions of dollars a year on the servers, all the coders, access to the markets, and not to mention *the assets they trade at a profit*... Vs the guys who made 150k a year and just quit to form a startup. Somehow I doubt they are too worried.
The only chance these guys stand is to basically create a "better" program they can then sell back to the banks. The problem is, the programs themselves are very simple (the simpler the better, speed is all-important) so it comes down to the equipment they use that dictates the revenue. Unless they come up with a more profitable model than "buy low, sell high" they are probably going to have to beg for their old jobs back before too long.
Wow! It's amazing what you learn when you actually read the article. I should do it more often.
These guys are not whining about the situation, they are actively taking measures to fix it.
Of course one may want to make sure they have another job before quitting...or "not as much money as I want" could easily turn into "no money at all."
I think the real problem isn't that the programmers should make more, it is that the traders should make LESS
I don't know that I agree. I think this is a very subjective issue. The reality is, the amount of revenue derived partially from these programmers has absolutely nothing to do with what their compensation is or should be. By their rationale, every teller at a bank should have salaries commensurate with that bank's revenue, since they're an element in processing deposits/checks/payments/etc. Hell, the data center I run makes millions every hour, but I don't expect that I should make 7 or 8 figures because of it.
The lesson here is: negotiate well on the way in. Do your homework, find out what the job entails and what responsibilities/liabilities you will have and determine for yourself if the compensation being offered is worth it. Once you cut the deal, that's it. If you don't like it, you can do as the programmers in the article are doing, go somewhere else and try to negotiate a better deal. It ain't personal, it's business.
And you really think the colleagues using the software were footing the bill? Bullshit. It's about time developers stood up and demanded compensation for their inventions instead of letting idiot stock traders reap the rewards by pushing a few buttons.
The stock traders make what they do because they know what buttons to push and when. If they push the wrong button at the wrong time, they stand to lose millions for their clients and themselves. These programs have no idea as to when to buy, sell or hold. All they do is retrieve data and analyze it into reports. It's up to the trader to know what to do with it.
If being an "idiot stock trader" who makes millions is so easy, why aren't you doing it? You can push a few buttons, right?
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
Hi, you must be new to America. Here, money is more important than life, ethics, or anything else.
Palm trees and 8
You seem to be mistaking a little bit of coding with the work that is actually being done.
The programmers in this article are not dumb fuck meth addicts building a website and writing a little bit of Flash or C++ or even guys with EE or CS majors, but rather tend to be Economic or Statistic PhDs from Northwestern, UC, and other major programs. From the article, Sergey Aleynikov, according to his LinkedIn pagelike, has at least a masters from Rutgers and likely a PhD.
The programmers are working with SAS and other powerful statistical software that on their own is easy enough to learn. But these programmers are applying what the learned in their PhD studies to create trading and marketing strategies and then create proof of the trading and marketing strategies. They are making their companies millions and get paid very little because "they are only programmers".
They have every right to not be particularly happy. The programmers, these economics PhDs, know their worth and it isn't 125k a year.
Also, there is an increasing tendency in American business culture to undervalue the PhD as a foreigner or nerd degree and require anyone who makes real money to have an MBA.
Hoist Number One and Number Six.
Only on Slashdot can a $100,000-$150,000 salary be described as "[having] their blood sucked from them." Wow.
Where I live, I make the equivalent of USD 29.000 a year. It looks low, but it's really not bad around here. I have no idea how it is in New York, though. Maybe for a NY standard I'm below the poverty line.
But if the programmer makes N and his boss makes 10 times that by adding very little value, yes, the programmer is being blood-sucked.
the real problem isn't that the programmers should make more, it is that the traders should make LESS.
Wow. I'm a total stranger, but can I decide what you make? On a whim? Seems you don't have a problem doing it for others.
I had a sucky sig.
But I know alot with the same sentiments and effectively migrating to management hoping they'll make their big bucks, often resulting in incompetent management.
Yeah, I know this perfectly. In my country, if you're not a manager by 30, you're a loser. That results in a lot of people moving into management that shouldn't be there, and would be useful doing other things.
Also, companies treat engineers like shit and then complain they can't employ good engineers. There aren't any. They're all too busy being bad managers.
Unfortunately, employers use the "bad economy" argument to try and justify the rampant abuse. A perceived bad economy is an employer's best friend.
bluHatter
What exactly are the big risks? If you fail, you turn to your buddies doing well for an "angel investment" and start all over again. If you get caught lying/stealing/cheating, you have to give up about 10% of your hundreds of millions in profit to make the SEC go away.
The people who are investing their money are the only ones taking a risk. If the boss gets greedy and makes a few bad trades, they can kiss a nice chunk of their 401k goodbye. If he does a good job, he'll take 20% of the earnings for himself because he managed to find a couple of sucker programmers willing to write something to do all the work for him.
Frequency trading could be fixed quickly. The NASDAQ , the NYSE, and the other exchanges could simply say that if you buy a stock you have to hold it for 24 hours. If you think that's too long, I might agree, but I think we can all agree that no value is added by buying/selling a stock in under a second to make a profit. That money is coming from folks who are long-term investors trying to have some sort of retirement.
That's the only way to get the superstars... I ALWAYS am the guy looking for the next job. Why? because asshole executives dont promote high skill tech people... they want to keep them where they are at. So I jump ship every 3-5 years to get my own promotion and pay raise. It is the way most sucessful people climb the ladder.
Honestly only a complete fool is loyal to the company. Because the company is never EVER loyal to you.
Do not look at laser with remaining good eye.
Devil's Advocate:
;)
The $25k pays for mining the ore, extracting the metals, drilling kilometres under the sea for the oil, polymerising it, designing the units, injection moulding and, yes, your job putting it all together. I'm guessing you didn't do all of that...but if you did, then yes, you should get a pay rise, or at least a funkier job title
Please consider this account deleted, I just can't be bothered with the spam anymore.
did you design those condensers? do research on improvements? market them? package/ship them? oversee the entire operation to ensure that they were being sold at approx. the same rate at which they were built, and that you always were supplied with the raw materials / tools necessary to build them? own the building you produced them in? generate all the energy needed to create them?
but no, you just shit out those $5000 condensers on your own right? no costs to the company but your working wage.
Your Econ-101 course would have been improved by including a copy of Animal Farm. In the lost epilogue, the pigs mint coinage to invest German efficiency into everything they were doing already.
The principle you seem to be ranting on here is that voluntary transactions create wealth, no matter how the transaction is instrumented (coins, jars of pebbles, jiggling twins).
Monopoly is the word we use to describe the situation where voluntary rubs noses with indentured servitude. If there's only one place to purchase food, well, no-one is forcing you to chose survival.
In high speed computing one tends to compute bisection bandwidth: given any way of partitioning the system, what is the maximum bandwidth across the partition boundaries.
The concept of monopoly is similarly fungible. The banking industry has sliced up the economic system so that one partition (the high velocity insiders) have access to first-mover advantage, and everyone else doesn't. One term in what constitutes voluntary trade has been supremely tilted in favour of a group that isn't working nearly as hard as they ought to relative to the resources they command, even if it does, as you point out, greatly enrich Columbian farmers who would otherwise have to grow vegetables.
If the glorious concentration of wealth directed equated to aggregate productivity, Russia would be a model economy.
I will say your recitation of why money in and of itself can't be blamed was superbly rendered.
On the other hand, somehow you didn't manage to notice that typing the query "apple suicide" into Google no longer brings up a fairy tale: it brings up Foxccon in the "I feel lucky" position.