Principal Engineer Salary Negotiation - How to Negotiate a Principal Engineer Job Offer
Principal engineer roles are a big deal – they come with high expectations, leadership responsibilities, and deep technical expertise. Your principal engineer compensation should reflect the skills you’ve built in your career and the value you bring to the table. Even if you’ve never negotiated before, making your principal engineer salary a priority is a smart move.
In this guide, we’ll walk you through how to navigate a principal engineer salary negotiation step by step to help you land a competitive compensation package. Our process has helped principal engineers of all kinds boost their total career earnings – whether you’re in software, cloud security, hardware, mechanical, artificial intelligence, or another engineering discipline our techniques will help. No matter what type of engineering you do, our salary negotiation strategies will prepare you for every step of the negotiation process.
Want to Negotiate Your Offer? Get offer-specific guidance from a Salary Negotiation Coach. We help principal engineers negotiate competitive job offers.
Or leverage our Salary Negotiation Courses and Templates.
Understanding the Compensation in a Principal Engineer Salary
Whether you’re negotiating a Microsoft principal engineer salary, Apple principal engineer salary, or another sought after principal engineering role, they all start with the same step: gaining a detailed understanding of the total compensation in your offer.
When it comes to principal engineer job offers in particular, the total compensation that you receive will be split across the following compensation components:
Principal engineer base salary
Principal engineer bonus
Principal engineer equity
Principal engineer sign-on bonus
While it might be tempting to only focus on the base salary in an offer, you won’t be able to tell how competitive the compensation really is without reviewing all its different compensation elements. This is why effective principal engineer salary negotiation’s start with the correct understanding of the job offers total compensation.
For example, here is what the average total compensation for a Meta principal engineer salary may look like in the initial offer:
Meta Principal Engineer Salary
In the following sections, we will cover the most common compensation components for principal engineer careers in more detail.
PRINCIPAL ENGINEER SALARY
The first salary component we will cover is probably the one you’ve focused on the most: your principal engineer base salary.
As you know, a base salary is the fixed guaranteed pay that you receive in exchange for the work you do, so it won’t change based on your performance or any other factors.
However, negotiating a principal engineer base salary requires insight into how the base salary is determined. In most cases, the company you work for will have different engineering roles that each have different base pay ranges associated with them.
For example, the pay range for a Google principal engineer salary would be different from the range for a Google senior principal engineer at the same company – and the same goes for roles across different companies (i.e., a Nvidia principal engineer salary range will differ from a Snowflake principal engineer salary range).
Initial offers rarely come in at the top of the base salary pay band, so if you know what the pay range for your specific role type is, you can negotiate a principal engineer salary to the top end of the range.
PRINCIPAL ENGINEER BONUS
Most principal engineer compensation packages will also include an annual performance bonus – which is typically a percentage of your base salary.
The specific percentage for your principal engineer performance bonus is usually dependent on both personal and company performance. So unlike a base salary which is fixed, a principal engineer target bonus can increase or decrease depending on the targets you or the company hits. We always recommend assuming the average bonus payout when evaluating and negotiating this component of your principal engineer salary package.
Even though these bonuses are typically non-negotiable for principal engineers, they can still make a huge difference in your total compensation. And don’t forget that this bonus is usually a percentage of your principal engineer base salary so the higher you negotiate the base salary, the higher the bonus.
PRINCIPAL ENGINEER EQUITY
Next, let’s explore equity packages that are very important to most principal engineers.
If you receive equity in your initial principal engineer salary package then it will be offered as either RSUs (restricted stock units or restricted stock awards) or stock options (most common at startups). This equity grant will include a bundle of shares or options that vest over a defined timeframe (i.e., three years), called a stock vesting schedule.
Equity packages at the principal engineer level can make a huge difference in your total compensation and future career income. However, you’ll need to always keep in mind that the value of this equity can change based on the market value of the company you work for.
For example, say you secure a Netflix principal engineer salary – you’ll benefit if Netflix’s share value goes up, but you’ll take a loss if their share value goes down. And don’t forget that if you leave the company before the equity vests, you will lose any unvested shares.
We’ve found that equity packages are usually negotiable for principal engineer careers so you should almost always push for more equity in your negotiation.
PRINCIPAL ENGINEER SIGN-ON BONUS
Most should receive a principal engineer sign-on bonus in their job offer – it just might take some negotiating. A principal engineer sign-on bonus is a one-time bonus that works as an incentive to join the company and can also be used to cover any lost bonuses or unvested equity at your current company.
Some companies won’t offer a principal engineer signing bonus initially, which is why it’s so important to know how to negotiate for one. Over the years, we’ve had countless successes securing large principal engineer signing bonuses – even when the engineer wasn’t walking away from incentives at their current company.
Most principal engineer sign-on bonuses are paid in a lump sum within the first month of employment. However, you’ll typically need to pay it back if you leave the company within your first year. You should be aware that some companies approach sign-on bonuses differently. For example, the Amazon principal engineer salary package includes a two year sign-on bonus – one in year one and one in year two.
PRINCIPAL ENGINEER Stock REFRESHER
The next possible element in a principal engineer job offer to consider is if there is a annual stock refresher. Stock refreshers are extra equity grants that some companies give principal engineers. They come with their own stock vesting schedule and are usually given out annually.
Most recruiters don’t share a lot of details about stock refreshers because the amounts can vary or depend on certain conditions. That’s why we usually don’t include them in our total compensation calculator because most times they’re not fixed or guaranteed.
PRINCIPAL ENGINEER BENEFITS AND PERKS
As with any job, principal engineer benefits and perks will look very different depending on the specific company you work for (i.e., Google job offer benefits will differ from Meta job offer benefits).
Some of the most common benefits extended in these types of roles will be across all employees and include perks like health insurance, retirement matching, unlimited vacation, or even fitness memberships. But a top perk we see frequently for principal engineering roles is the ability to work remotely.
We don’t suggest pushing too hard on benefits in the negotiation since most benefits are usually non-negotiable depending on the size of the company, but it is sometimes possible to get changes approved via an under-the-table agreement with your future hiring manager (i.e., your manager will be more flexible with a remote work schedule).
Steps for a Principal Engineer Salary Negotiation
Now that we’ve covered the most common compensation components of a principal engineer salary, it’s time to learn how to negotiate for a competitive principal engineer job offer.
Before we cover the steps, it’s important to clarify that you should only follow these salary negotiation strategies once you have an official offer in hand. Negotiating before receiving an offer can work against you and remove any leverage you have.
While these are the key steps to a principal engineer salary negotiation, we strongly recommend engineers use our Salary Negotiation Coaching to guarantee success in the negotiation.
1) UNDERSTAND THE COMPONENTS OF a PRINCIPAL ENGINEER SALARY
This first step in the principal engineer salary negotiation process should be relatively simple since we’ve already covered it.
As a quick reminder, make sure to review your principal engineer salary package for a base salary, performance bonus, initial equity grant, sign-on bonus, and any benefits and perks. Understanding the different elements that make up your total compensation is key to any successful negotiation.
You can use our Total Compensation Tool to calculate your principal engineer compensation components in this step.
2) Build Leverage By Asking Strategic Salary Negotiation Questions
Once you have carefully evaluated all elements of your principal engineer jobs offer, the next step is to send over a list of strategic questions to the recruiter. Doing so can help you create leverage in the principal engineer salary negotiation before sending a counteroffer.
Unsure what sort of questions you should ask? Start by asking for clarity on items that the recruiter may have been vague about (i.e., do you offer stock refreshers at this level?). The information you collect will help you craft the principal engineer counteroffer.
We suggest starting this step right after you receive the job offer and have provided our list of questions for you to ask here: Strategic Questions to Build Negotiation Leverage.
3) RESEARCH WHAT PRINCIPAL ENGINEER SALARY SHOULD LOOK LIKE
Since the salary ranges for principal engineers will differ by company and role (i.e., is it a principal software engineer salary or principal hardware engineer salary), you’ll need to conduct some detailed research to understand the strength of your current offer and how much you should ask for in your principal engineer counteroffer.
During this step, it’s important to research comp specific to the exact role, company, and where it’s located (i.e., is it a principal engineer salary in Seattle or a principal engineer salary in San Francisco), whether that be in-person, hybrid, or remote.
There are many online resources available for compensation research, such as Built In and others. However, it’s important to note that the salary ranges on these sites are often self-reported by current or former employees, which means they may not reflect the most up-to-date offers for new hires. To ensure accuracy, we recommend cross-referencing pay data across multiple platforms. We created our Total Compensation Research Comparison Tool to help you streamline your research and effectively analyze pay ranges for your role.
4) SEND A PRINCIPAL ENGINEER COUNTEROFFER TO THE RECRUITER
By now, you should be prepared to present your principal engineer counteroffer to the recruiter with references to your pay range data findings and explanations for how the benefits in your offer differ from other companies and/or your current position.
We always recommend that you present your principal engineer counter offer via email as opposed to by phone. Drafting an email gives you the time and freedom to write out exactly what you want to say to minimize the risk of going off-topic. An email also gives the recruiter something they can easily forward on and share internally with their team.
The most important thing to remember in this step is to always present your principal engineer counteroffer in a strategic yet professionally manner – this is your first chance to showcase what you would be like to work alongside. To ensure proper communication, we’ve provided our Counteroffer Email Templates to help you draft a strategic counteroffer.
5) HANDLE Recruiter Pushback AND Secure a Competitive PRINCIPAL ENGINEER SALARY
After you send over your principal engineer counteroffer, be prepared for the recruiting team to pushback on why they can’t make any increases or changes to the principal engineer salary.
This is a typical part of the process and when faced with this pushback, respond professionally by stating you understand their constraints, but ask again if they could take your counter back to their team for one last look (like we explain in our Objection Handling Scripts). You should still ask even if they insist their team will just say no.
They should return with an improved offer once they agree to take your thoughts back to their team. If the updated compensation package aligns with the principal engineer salary bands you researched and meets your goals, you should be ready to send over an Offer Acceptance Email to lock it in!
Mistakes to Avoid During a Principal Engineer Salary Negotiation
There are a lot of mistakes you can make in the negotiation when not working with a Salary Negotiation Coach. Below we’ve listed some of the top things you should make sure you avoid when you negotiate a principal engineer salary.
AVOID SHARING SALARY EXPECTATIONS BEFORE Getting The JOB OFFER
Many engineering professionals don’t realize that sharing salary expectations before receiving an official offer often works against them – this is true for sharing these details verbally or on job applications. Remember, recruiters are representing the company’s interests, not yours, so it’s important to navigate these discussions carefully.
For example, if you’re interviewing for a principal engineer role at Google and mention a salary figure that’s lower than what the company is willing to offer, they might anchor to that lower amount and extend a less competitive package (or even down level you to a level that fits that pay amount). On the flip side, if you share a number that’s above their budget, you risk pricing yourself out of the role consideration entirely.
It also doesn’t make much sense to talk about salary expectations before you learn more about the principal engineer role and whether those aspects feel like a good fit for you. After all, you’re also interviewing them to see if this role is something you want to pursue so be sure to overcome these tactics by following our Salary Expectation Responses.
DON'T BE AFRAID TO NEGOTIATE A Principal Engineer SALARY
Too many people in principal engineering careers don’t negotiate out of fear. In many cases, they are worried about offending the recruiting team or losing the job offer altogether.
However, you’ll be encouraged to know that we’ve helped facilitate hundreds of successful salary negotiations and we’ve never seen a company rescind a principal engineer job offer because of an attempted negotiation. There is a wrong way to negotiate, but by following our coaching you can approach the process confidently and minimize any risks.
BE REALISTIC BY DOING PRINCIPAL ENGINEER SALARY RESEARCH
Even though principal engineer careers are in high demand and they pay well, you should still be realistic about what salary you ask for in your negotiation.
To do this, make sure that your research is specific to your exact role so that you only push for compensation that the company can realistically provide. For example, the compensation for an Amazon job offer will look different than the compensation for a TikTok job offer.
Salary Negotiation Coaching & Tools
Increasing your principal engineer salary requires a deep understanding of the company’s compensation philosophy and the right salary negotiation strategy. Our expert Salary Negotiation Coaching or Courses and Templates, will help you navigate the negotiation process and secure the top end of the principal engineer pay band.