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Amazon's stock packages vest non-linearly (exponentially) over 4 years, so if you leave after only one year you get only ~5% of the total package. As opposed t

Amazon's stock packages vest non-linearly (exponentially) over 4 years, so if you leave after only one year you get only ~5% of the total package. As opposed to the industry standard which is linear vesting. They also have onerous clawback clauses on signing bonuses and relocation, and I know of one instance where the clawback stipulated that the signing bonuses would be paid back pre-tax (e.g., $10k signing bonus, of which you got $6k after tax, but if you quit you have to cough up $10k) - meaning you are actually in the hole if you leave. They also have a habit of putting 2-year clawbacks on their bonuses rather than the more common 1-year, so leaving even in your second year at Amazon would result in substantial financial loss. Even in this environment I know multiple people who left before their 1-year anniversary, that's how bad it is in many parts of the company. I personally know multiple people who suffered substantial financial loss in order to leave.

ljk 11y ago
> They also have onerous clawback clauses on signing bonuses and relocation, and I know of one instance where the clawback stipulated that the signing bonuses would be paid back pre-tax (e.g., $10k signing bonus, of which you got $6k after tax, but if you quit you have to cough up $10k) - meaning you are actually in the hole if you leave. so if you get fired then you don't have to pay it back?
- potatolicious 11y ago
  Honestly I can't remember that part - my impression was that you were off the hook if you were fired, but I can't be sure. My original contract has been lost in the mists of time :P Strategically getting oneself fired might be a way to avoid the clawback, though it would probably have other consequences.
curiousjorge 11y ago
I made 10k in a year by playing the slot machine once a week
- curiousjorge 11y ago
  what the...well why would this get downvoted. im just saying money is totally relative.
whateveracct 11y ago
At least in my case, the clawback clause for the first year bonus is on a pro-rated, daily basis. So you'd only have to pay back the difference. The second year bonus is paid out monthly, and the last monthly chunk has to be paid back on a pro-rated, daily basis. So no, you don't have to pay back the entire $10k or $20k or whatever if you quit 9 months in.
plonh 11y ago
if you pay back pre-tax, you also reduce your income by that amount, so you pay less taxes. You aren't "in the hole".
- rdtsc 11y ago
  How so? Unless they take it out of your salary (but you already left then it is not part of your salary since you are well... gone). So you get paid at new job, pay taxes on it, then turn around and write a check to Jeff. I doubt IRS will kindly sympathize with you and say "ok plonh, let's make that check a deduction to help you out".
  - saryant 11y ago
    Not a tax guy, but I believe there is a procedure with the IRS for reducing the income on a prior tax return in the event of a clawed-back bonus. I left a company within six months once and they sent me paperwork about that to forward to the IRS. Though I refused to pay back the bonus and left that paperwork in a drawer... Several years later and I still get an annual nastygram demanding I pay them back.
    - rdtsc 11y ago
      > I believe there is a procedure with the IRS for reducing the income on a prior tax return in the event of a clawed-back bonus. Pretty interesting. I had no idea this was a common enough thing for IRS to have a special exception for. I looked it up and there is thing called "Claim of Right" aka "Section 1341" in the IRS code. But involves the tax payer to not have an actual "right to" the income in the year the income happened. Which in this case it seems like they did have (in other words the bonus paid in that year wasn't an accounting mistake of some sort). But then maybe the employment contract applies retroactively and it turns out the employee now didn't have the right...

ljk 11y ago

> They also have onerous clawback clauses on signing bonuses and relocation, and I know of one instance where the clawback stipulated that the signing bonuses would be paid back pre-tax (e.g., $10k signing bonus, of which you got $6k after tax, but if you quit you have to cough up $10k) - meaning you are actually in the hole if you leave. so if you get fired then you don't have to pay it back?

potatolicious 11y ago
Honestly I can't remember that part - my impression was that you were off the hook if you were fired, but I can't be sure. My original contract has been lost in the mists of time :P Strategically getting oneself fired might be a way to avoid the clawback, though it would probably have other consequences.

curiousjorge 11y ago

I made 10k in a year by playing the slot machine once a week

curiousjorge 11y ago
what the...well why would this get downvoted. im just saying money is totally relative.

whateveracct 11y ago

At least in my case, the clawback clause for the first year bonus is on a pro-rated, daily basis. So you'd only have to pay back the difference. The second year bonus is paid out monthly, and the last monthly chunk has to be paid back on a pro-rated, daily basis. So no, you don't have to pay back the entire $10k or $20k or whatever if you quit 9 months in.

plonh 11y ago

if you pay back pre-tax, you also reduce your income by that amount, so you pay less taxes. You aren't "in the hole".

rdtsc 11y ago
How so? Unless they take it out of your salary (but you already left then it is not part of your salary since you are well... gone). So you get paid at new job, pay taxes on it, then turn around and write a check to Jeff. I doubt IRS will kindly sympathize with you and say "ok plonh, let's make that check a deduction to help you out".
- saryant 11y ago
  Not a tax guy, but I believe there is a procedure with the IRS for reducing the income on a prior tax return in the event of a clawed-back bonus. I left a company within six months once and they sent me paperwork about that to forward to the IRS. Though I refused to pay back the bonus and left that paperwork in a drawer... Several years later and I still get an annual nastygram demanding I pay them back.
  - rdtsc 11y ago
    > I believe there is a procedure with the IRS for reducing the income on a prior tax return in the event of a clawed-back bonus. Pretty interesting. I had no idea this was a common enough thing for IRS to have a special exception for. I looked it up and there is thing called "Claim of Right" aka "Section 1341" in the IRS code. But involves the tax payer to not have an actual "right to" the income in the year the income happened. Which in this case it seems like they did have (in other words the bonus paid in that year wasn't an accounting mistake of some sort). But then maybe the employment contract applies retroactively and it turns out the employee now didn't have the right...