The Salary of a Product Manager: Everything You Need to Know

Product Managers play a key role within companies acting as the intersection between business, technology, and user experience. As such they typically receive 7 main types of compensation:

• Base Salary,
• Bonuses, 
• Sign-On Bonuses, 
• Equity and Stock Options, 
• Benefits,
• Relocation Assistance, and
• Profit Sharing.

Several factors influence the total value, and composition of these compensation packages including:

• Career Level - as Product Managers take on higher levels of responsibility and seniority they are better compensated overall for their work.
  
  
• Geographic Location - significantly impacts Product Manager compensation, affecting base salary due to cost-of-living, cultural norms, and job market competitiveness.
  
  
• Industry - the Industry of employment impacts compensation for Product Managers, with high-revenue potential and industry complexity being key factors; transitioning industries can offer unique benefits and opportunities.
  
  
• Company Type and Size - a Product Manager’s compensation varies significantly by company type and size, with for-profits often offering the highest salaries and startups providing valuable equity options.

Product Managers play a key role within a company, acting as the intersection of business, technology, and user experience with a primary responsibility of ensuring that a product not only meets the market needs, but also aligns with the company’s goals and vision. 

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Regardless of whether you are already a Product Manager, or are aspiring to become one, understanding the types of compensation typically offered as part of your total compensation package, and the impact several factors such as seniority, geographic location, and industry have on that package is crucial when heading into negotiations as part of a job offer or annual review. 

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In this article we will delve into each of the types of compensation offered to Product Managers, and each of the factors which will have an impact on that total compensation package offered.

When joining a tech company, Product Managers will typically receive a combination of the several types of compensation to create a complete package. As you begin to negotiate and work with a company, understanding the types of compensation offered, how they balance one another to provide a holistic package is important. In the following section you will learn about the 7 main forms of compensation offered as part of a complete compensation package.

• Base Salary - the core, fixed, annual amount paid to an employee, importantly this figure does not include bonuses, equity, or other forms of compensation.
  
  
• Bonuses - both performance and spot bonuses form an important component of the total compensation package offered to Product Managers.
  
  
• Sign-On Bonuses - a one-time payment given to new employees as part of their job offer, typically paid soon after an employee starts working with a company.
  
  
• Equity and Stock Options - often forming a significant component of the compensation package, Equity and Stock Options can provide a substantial financial reward beyond a Product Managers base salary and bonuses.
  
  
• Benefits - ranging from health insurance to transportation and even free meals, most companies offer a range of Benefits which are directly linked to employee job satisfaction and well-being
  
  
• Relocation Assistance - for Product Managers moving to a new location, Relocation Assistance may offer financial support for relocation expenses. ‍
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• Profit Sharing - a type of incentive plan under which a company distributes a portion of its profits to its employees, based on its earnings over a specified period.
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Each of these types of compensation naturally come with nuance, for a more comprehensive overview to the 7 types of compensation offered to Product Managers read our article: The 7 Types of Compensation Offered to Product Managers.

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Product Managers have an understanding of the business needs, technological ability, and customer requirements, allowing them to play a pivotal role in the overall development and ultimate success of a product. 

As with any career, the level of responsibility and seniority an individual Product Manager may have within a team or company will vary. The diagram below illustrates the typical career path a Product Manager would follow as they move from Junior Product Manager through to Chief Product Officer.

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In regard to the total compensation package offered to a Product Manager in relation to their contracted role and responsibilities, it is correct to assume that as an individual progresses in their career, the total package offered will increase. For some Product Managers, this may purely be an increase in base salary; for others it may mean greater equity and stock options. Regardless of how the compensation package is composed, it will be greater in total value. 

To learn more about the career progression of Product Manager and how to advance your career, read our article: The Product Manager Career Pathway.

As expected, the geographic location of a Product Manager role will have a direct impact on the composition of, and total amount offered in, a compensation package. There are many reasons for this including differing cultural norms, cost-of-living, and job seeker competitiveness which all influence the base salary offered. 

As shown in the graph below, the base salary offered to Product Managers based on both location and seniority plays a huge role, with roles in Switzerland and the United States offering higher base salaries in comparison to countries like Brazil and India. Beyond this high-level view, there may be variation in base salary depending on the city of residence within each country. 

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For aspiring Product Managers looking to land their first role, the industry you choose will largely be dependent upon where your existing experience lies. However, for individuals who are already Product Managers and are looking to change their role, a change of industry may be incredibly welcome and can present several advantages.

As the world is continually being transformed by technology, there is an ever growing list of industries seeking Product Managers. Some of the most notable industries include: technology, financial and economic, health and pharmaceuticals, automotive, and consumer electronics. Depending upon the industry, the total compensation package will vary. There are several factors influencing the overall salary received by a Product Manager in differing industries, however the two primary factors are:

• Revenue Potential - industries with a larger revenue potential will typically compensate Product Managers better. For example, the technology industry has a high revenue potential and consequently is usually the highest-paying sector for Product Managers.
  
  
• Industry Complexity - the more complex an industry, the greater the compensation. For example, the healthcare and pharmaceutical industry is extremely complex with severe legal processes which must be met.

As previously mentioned, when seeking your first role as Product Manager it is important to leverage all previous experience you have to provide a unique perspective for employers to see. As a Product Manager, a change in industry isn’t uncommon and can lead to several benefits for both employer and employee alike. Product Managers are hero advocates for the product or service that they are developing, when looking for your next role it is important to find something you are passionate about and a company vision which resonates with you. This will lead you to having the highest success of finding your Product role in any industry.

Depending on the industry you work within, there will typically be a variety of organisations seeking Product Managers. The type of, and total, compensation offered by these organisations will vary significantly depending on two key factors: company type, and company size. 

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Company type will create the greatest variance in compensation type and value offered to a Product Manager. The three main types of organisations include:

• For-Profit Companies
• Non-Profit Organisations
• Non-Governmental Organisations (NGOs) | Charities

For-Profit Companies often offer the highest salary in comparison to Non-Profits and NGOs | Charities. This is due to their primary goal of generating profit which enables a greater proportion of their budget to be allocated for competitive compensation. Furthermore, it is extremely common for both bonuses and equity to be offered on a performance basis which can significantly enhance the total compensation package. 

Non-Profit Organisations typically operate with a more constrained budget, which is reflected in the generally lower salaries offered to Product Managers. Equity and stock options are typically absent due to the nature of organisation. However, many Non-Profit Organisations have a much stronger sense of mission and purpose which can be a significant non-monetary benefit. 

Finally, NGOs and Charities offer very similar compensation packages to that of Non-Profit Organisations. However, larger international organisations may offer better compensation packages due to their larger operating budgets. Again similar to Non-Profits, NGOs and Charities offer a strong sense of purpose having a direct impact on social and environmental issues from a local to international scale.

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Alongside company type, the company size will also generate significant differences in the type and value of a Product Manager’s total compensation package. The three main company size groupings include: 

• Startups
• Small to Medium Enterprises (SMEs)
• Large Corporations

Startups often offer lower base salaries compared to more established companies due to having a limited operating budget and greater constraints. However, it is common for Startups to compensate for this with greater focus on equity packages and stock options, which could become highly valuable over time, if the Startup succeeds. It is worthwhile noting that due to a Startups ability to scale rapidly, Product Managers may experience faster career progression.

SMEs typically offer moderate salaries as they are more stable than many Startups, but not yet able to compete with Larger Corporations. A SME might not offer the same level of equity and stock options as startups, while at the same time not having the ability to match bonuses found at Larger Corporations. Despite offering a moderate compensation package, SMes often provide a balanced work-life environment with fewer bureaucratic hurdles.

Large Corporations generally offer higher based salaries and comprehensive benefits packages, including: bonuses, health insurance, retirement plans, and other perks. While career progression may be slower due to the sheer size of the company, Large Corporations typically offer structured paths for advancement and skill development. 

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Ultimately, finding the right company type and size to suit your goals and needs is important. Understanding non-monetary benefits can play an important role in targeting specific Product Manager roles over others, such as stability, work-life balance, and career growth.

Product Managers have the potential to receive an incredibly attractive compensation package, filled with benefits, stock options, and a great base salary. Understanding the types of compensation offered, and how differing geographies, industries, and organisation types influence that package will place you in a strong position for finding the job of your dreams, and being able to negotiate a great total compensation package for your needs.