$200k is one expensive software engineer. On average, you can get people to work for much less.

Paying for software developers is really weird. State governments for example struggle to pay for a FTE that makes $140k. But they can pay me over $200/hour for consulting services for multiple years. The technical FTE employees that they have generally aren't qualified to evaluate their consulting needs so you get multi-million dollar contracts with very little actual oversight. I was really impressed with the folks I was working with at this particular state government and looked into what it would look like if I joined them full time as a FTE technology leader. I would have to take almost a 50% pay cut. The top senior IT position that oversees all of the state resources makes 70% of what I do. It's crazy. Unless you're working in medicine or sports, government pay sucks.

I've seen similar but less extreme examples play out in the private sector. 16 year senior architect making less than freshly hired software dev that was just an intern within the same company. Software developer pay is largely based on what you're demanding. In a lot of companies, there is a wide range of pay for folks doing literally the same job. They will hire a dev at $180k because that dev wouldn't go lower and turn around and push back to get another dev at $120k for the same level of unproven experience.

They give up pay for guaranteed work and benefits, maybe a pension? Most likely little risk of being fired or laid off.

You have to keep finding clients (I'm sure it's easy now, will it always?) and pay all your expenses.

I assumed the commonly cited 2x markup, so that would be a $100k salary, which is less than various websites say is the average US software dev salary. You could probably find cheaper elsewhere in the world, but even if you cut the salary in half that's still "bug must be doable in a week", which isn't going to cover many of the bugs people will care about.

I believe that the $200k figure was meant to express what such a person might cost the company, not what that person would be paid as salary.

(And it's just a placeholder. $200k seems like it's at least in the direction of the right ballpark.)

$200k is on the extreme high-end of software engineers. For example in eastern europe $30k is normal. And that's not even the floor. You can go to india or africa to get even cheaper. The problem with this bug bounty though is that it requires pretty rare expertise. It's not a "throw any developer at it" type of thing.

You don't need to hire American expensive, but not so productive, engineers, there are lot of other countries. Also, there are ML models.

If you let the ML do it, it means it was so trivial you could have done it yourself faster.

200k is a fairly high salaried software eng in expensive markets, a bounty program like this would be open worldwide and many people would be willing to work for a fraction of that, quality control is another concern but take a look at prices on sites like upwork and bids for this type of work and realize 200k is nowhere near the lower baseline.

$200k in cost to the company is a lot different than $200k in salary. It probably relates to someone making like $140k, depending on the various tax rates.

also, don't forget to include QA and release management overhead, as well as projectmanagement etc...

the 60k buffer probably just covers the salaries of the multiple layers of management and facilities (building, cleaning...)

You are forgetting that typically many users want a bug fixed.