12 ms·

According to two salaries on glassdoor, VP of Marketing at Amazon pays around 170k/yr.

aripickar 6y ago
It doesn’t. Base is 160k/yr, and stock probably is something like 4 mil over 4 years at onset, so he probably made 1.5-2 mil this year.
mcpherrinm 6y ago
Amazon has a hard cap on cash comp at $160k. All further comp is in stock.
- closeparen 6y ago
  Wow! So do high level employees have to sell shares to pay their mortgages and credit cards? Everyone I know pins their lifestyle to base and saves near 100% of equity. Some don’t sell at all. I’m guessing that would change with a hard cap on base. That’s a different kind of exposure, not just to long term performance, but day to day volatility, and specifically during open trading windows.
  - tass 6y ago
    It depends how much they like to spend
  - techsupporter 6y ago
    > So do high level employees have to sell shares to pay their mortgages and credit cards? Employees at this level tend to have a pretty high level of financial management services to manage scenarios like this. I have two associates, not close enough to call them friends but close enough to have some insights, on the edges of this world. What they do: - Other investments provide so-called passive income and that cash flow plus base salary is used for minimum expenses. - Spending on larger-ticket items and services is budgeted out and is drawn from a variety of lines of credit secured against things like stock or the underlying holdings of those earlier investments. - Most spending is planned in advance, either annually or quarterly, based on past income and future expected income. How much is added on the "future" side is financed by (often very inexpensive) leveraged debt and is calculated based on the risk tolerance of the individual. Securing the debt with assets makes that debt screamingly inexpensive. Paying a handful of percent on debt that will only be borrowed for a few months at a time is, of course, seen as a reasonable cost to smooth out cash flow and leave the other money invested at a much higher return. One other person I know who is not a higher-level employee but structures his spend very rigidly goes one step further and prepays all of his non-housing bills out of his annual bonus and one of the stock awards during the year. His annual salary and any other stock awards pay for housing, food, and savings.
    - viscanti 6y ago
      > Paying a handful of percent on debt that will only be borrowed for a few months at a time is, of course, seen as a reasonable cost to smooth out cash flow and leave the other money invested at a much higher return. It's not just that. They also get to avoid paying capital gains taxes on their shares. So they can borrow against those shares to buy income generating assets that more than cover the interest costs and they can do so while avoiding having to pay the taxes on those gains (especially important when those gains are still short term capital gains where they would be taxed as income).
    - jedberg 6y ago
      > Employees at this level tend to have a pretty high level of financial management services to manage scenarios like this. I think you're seriously overestimating how sophisticated the financial management is of your typical software engineer, who could very well be spending beyond the cap with none of those things you mentioned. In my experience, most Amazon employees just put everything on a credit card, and then they sell stock to cover the credit card payments if their salary doesn't cut it. That's pretty much the extent of their financial planning.
      - throwawaygh 6y ago
        But this article isn't about a software engineer. It's about an Amazon VP, which is an executive position.
        jedberg 6y ago
        That's how a lot of the executives budget too though. You'd be surprised how unsophisticated even high level software engineering VPs are when it comes to finance. Their expertise is in software, not finance. As a case in point, we had to spend a lot of time educating people at Netflix how stock compensation worked, including a lot of VPs. They just didn't care, it was of no interest to them. Money goes into bank, money comes out. ETrade account has a big number, yay! That was about it. Of course some of them were much better than that, but just because they are engineering executives doesn't make them good with money.
  - setr 6y ago
    I would imagine you'd take out loans backed by those shares, if you're betting on the shares increasing in value, to get cash while not losing equity. At the very least, some method exists to produce liquidity without actually losing equity, or the whole $1-salary but compensated purely by stock CEO model wouldn't make any sense (if they're just immediately selling what they get, then it might as well be a performance-based, or stock-based, bonus)
  - jkaptur 6y ago
    Holding on to equity grants after they vest is probably a bad idea. It's precisely equivalent to using a larger salary to buy stock in your company. Is that what you'd do if you got a raise? You should evaluate what your ideal investment mix is (keeping in mind that you already have a lot of exposure to the company where you work and have unvested equity) and always rebalance towards that. The source of income is immaterial.
  - rblatz 6y ago
    Setup a 10b5-1 then you don’t have to worry about open trading windows.
  - scarface74 6y ago
    Why wouldn’t you sell? Thought experiment. If you got paid the same amount in cash that the company gives you in stock - would you use the equivalent amount of money to buy the company’s stock?
  - yborg 6y ago
    What's really amazing is that people that don't make $160K/yr aren't eating their own children to survive. I don't have kids so I have no choice but to use extreme willpower to exist on my barely 6 figure comp.
    - ghaff 6y ago
      I really hope you're being sarcastic.
      - seniorsassycat 6y ago
        it sounds like a modest proposal to me, why would he be sarcastic?
    - quantified 6y ago
      Children are more of a luxury dining experience. Yes, we can tell sarcasm without listening to verbal inflection.
  - jedberg 6y ago
    > Wow! So do high level employees have to sell shares to pay their mortgages and credit cards? They give new employees a bonus in their first two years to make up the difference before they start vesting. After that, yes, they need to sell stock if their expenses exceed the cap. Which is fine as long as Amazon stock keeps going up. Another side effect of this is that if Amazon's revenue drops, they don't have to move to layoffs so quickly. Everyone's salary will naturally go down, since the shares they get each month are worth less, but it will feel better because "no layoffs and no pay cuts are necessary".
    - ghaff 6y ago
      >Everyone's salary will naturally go down, since the shares they get each month are worth less, but it will feel better because "no layoffs and no pay cuts are necessary". Leaving aside share buybacks, they're still paying the same salary and are still distributing shares from the same allocated pool. On the other hand, if there is a big share price drop, a lot of your employees have suddenly taken a big compensation hit. (And they may have already paid taxes based on a higher share price at the time of vesting if they didn't immediately sell which is another argument not to hold onto a lot of RSU shares after vesting.)
- bmcfeeley 6y ago
  That is not true for at least SDE positions. See: https://www.levels.fyi/?compare=Amazon&track=Software%20Engineer https://www.levels.fyi/?compare=Amazon&track=Software%20Engi...
  - joshuamorton 6y ago
    That agrees with GP. Base salary is capped at 160K.
    - bmcfeeley 6y ago
      There are a large number of salaries reported in excess of 160K therein.
  - dagnabbit 6y ago
    It is absolutely true. Seattle area roles are capped at $160k cash; the rest is in RSUs. (or if you're a new hire, in your new hire bonus).
  - tidepod12 6y ago
    AFAIK there's an exception for some geos like the Bay Area (and maybe NYC?) where salary can go as high as $180k (or maybe $185k.. I don't know the exact number). That might be why levels.fyi reports higher than $160k (or it could just be lies) but the general gist is correct. Amazon has a hard cap on their salaries. Any pay over ~$180k (or whatever the number is) is given out as either cash bonus or as stock.
    - Zaheer 6y ago
      Ex-Amazon here. This is right - Bay Area cap is $185k.
    - bmcfeeley 6y ago
      Sure, no arguments here about the existence of a top end — that’s moving the goalposts though. There is not a hard cap at 160K. As an aside, is this materially different than any other FAANG? All the offers I’ve seen when browsing tools like levels.fyi scale much faster in stock/bonus compensation than in salary.
- dantheman 6y ago
  That's not true.
whycombagator 6y ago
I think that might only be reflective of base pay and not including stock. I would have guessed the total comp is multiples of the glassdoor figure
mh8h 6y ago
That's the base salary. Amazon has a cap on the salary. The rest of the compensation comes from bonuses and RSUs.

It doesn’t. Base is 160k/yr, and stock probably is something like 4 mil over 4 years at onset, so he probably made 1.5-2 mil this year.

mcpherrinm 6y ago

Amazon has a hard cap on cash comp at $160k. All further comp is in stock.

closeparen 6y ago
Wow! So do high level employees have to sell shares to pay their mortgages and credit cards? Everyone I know pins their lifestyle to base and saves near 100% of equity. Some don’t sell at all. I’m guessing that would change with a hard cap on base. That’s a different kind of exposure, not just to long term performance, but day to day volatility, and specifically during open trading windows.
- tass 6y ago
  It depends how much they like to spend
- techsupporter 6y ago
  > So do high level employees have to sell shares to pay their mortgages and credit cards? Employees at this level tend to have a pretty high level of financial management services to manage scenarios like this. I have two associates, not close enough to call them friends but close enough to have some insights, on the edges of this world. What they do: - Other investments provide so-called passive income and that cash flow plus base salary is used for minimum expenses. - Spending on larger-ticket items and services is budgeted out and is drawn from a variety of lines of credit secured against things like stock or the underlying holdings of those earlier investments. - Most spending is planned in advance, either annually or quarterly, based on past income and future expected income. How much is added on the "future" side is financed by (often very inexpensive) leveraged debt and is calculated based on the risk tolerance of the individual. Securing the debt with assets makes that debt screamingly inexpensive. Paying a handful of percent on debt that will only be borrowed for a few months at a time is, of course, seen as a reasonable cost to smooth out cash flow and leave the other money invested at a much higher return. One other person I know who is not a higher-level employee but structures his spend very rigidly goes one step further and prepays all of his non-housing bills out of his annual bonus and one of the stock awards during the year. His annual salary and any other stock awards pay for housing, food, and savings.
  - viscanti 6y ago
    > Paying a handful of percent on debt that will only be borrowed for a few months at a time is, of course, seen as a reasonable cost to smooth out cash flow and leave the other money invested at a much higher return. It's not just that. They also get to avoid paying capital gains taxes on their shares. So they can borrow against those shares to buy income generating assets that more than cover the interest costs and they can do so while avoiding having to pay the taxes on those gains (especially important when those gains are still short term capital gains where they would be taxed as income).
  - jedberg 6y ago
    > Employees at this level tend to have a pretty high level of financial management services to manage scenarios like this. I think you're seriously overestimating how sophisticated the financial management is of your typical software engineer, who could very well be spending beyond the cap with none of those things you mentioned. In my experience, most Amazon employees just put everything on a credit card, and then they sell stock to cover the credit card payments if their salary doesn't cut it. That's pretty much the extent of their financial planning.
    - throwawaygh 6y ago
      But this article isn't about a software engineer. It's about an Amazon VP, which is an executive position.
      - jedberg 6y ago
        That's how a lot of the executives budget too though. You'd be surprised how unsophisticated even high level software engineering VPs are when it comes to finance. Their expertise is in software, not finance. As a case in point, we had to spend a lot of time educating people at Netflix how stock compensation worked, including a lot of VPs. They just didn't care, it was of no interest to them. Money goes into bank, money comes out. ETrade account has a big number, yay! That was about it. Of course some of them were much better than that, but just because they are engineering executives doesn't make them good with money.
- setr 6y ago
  I would imagine you'd take out loans backed by those shares, if you're betting on the shares increasing in value, to get cash while not losing equity. At the very least, some method exists to produce liquidity without actually losing equity, or the whole $1-salary but compensated purely by stock CEO model wouldn't make any sense (if they're just immediately selling what they get, then it might as well be a performance-based, or stock-based, bonus)
- jkaptur 6y ago
  Holding on to equity grants after they vest is probably a bad idea. It's precisely equivalent to using a larger salary to buy stock in your company. Is that what you'd do if you got a raise? You should evaluate what your ideal investment mix is (keeping in mind that you already have a lot of exposure to the company where you work and have unvested equity) and always rebalance towards that. The source of income is immaterial.
- rblatz 6y ago
  Setup a 10b5-1 then you don’t have to worry about open trading windows.
- scarface74 6y ago
  Why wouldn’t you sell? Thought experiment. If you got paid the same amount in cash that the company gives you in stock - would you use the equivalent amount of money to buy the company’s stock?
- yborg 6y ago
  What's really amazing is that people that don't make $160K/yr aren't eating their own children to survive. I don't have kids so I have no choice but to use extreme willpower to exist on my barely 6 figure comp.
  - ghaff 6y ago
    I really hope you're being sarcastic.
    - seniorsassycat 6y ago
      it sounds like a modest proposal to me, why would he be sarcastic?
  - quantified 6y ago
    Children are more of a luxury dining experience. Yes, we can tell sarcasm without listening to verbal inflection.
- jedberg 6y ago
  > Wow! So do high level employees have to sell shares to pay their mortgages and credit cards? They give new employees a bonus in their first two years to make up the difference before they start vesting. After that, yes, they need to sell stock if their expenses exceed the cap. Which is fine as long as Amazon stock keeps going up. Another side effect of this is that if Amazon's revenue drops, they don't have to move to layoffs so quickly. Everyone's salary will naturally go down, since the shares they get each month are worth less, but it will feel better because "no layoffs and no pay cuts are necessary".
  - ghaff 6y ago
    >Everyone's salary will naturally go down, since the shares they get each month are worth less, but it will feel better because "no layoffs and no pay cuts are necessary". Leaving aside share buybacks, they're still paying the same salary and are still distributing shares from the same allocated pool. On the other hand, if there is a big share price drop, a lot of your employees have suddenly taken a big compensation hit. (And they may have already paid taxes based on a higher share price at the time of vesting if they didn't immediately sell which is another argument not to hold onto a lot of RSU shares after vesting.)
bmcfeeley 6y ago
That is not true for at least SDE positions. See: https://www.levels.fyi/?compare=Amazon&track=Software%20Engineer https://www.levels.fyi/?compare=Amazon&track=Software%20Engi...
- joshuamorton 6y ago
  That agrees with GP. Base salary is capped at 160K.
  - bmcfeeley 6y ago
    There are a large number of salaries reported in excess of 160K therein.
- dagnabbit 6y ago
  It is absolutely true. Seattle area roles are capped at $160k cash; the rest is in RSUs. (or if you're a new hire, in your new hire bonus).
- tidepod12 6y ago
  AFAIK there's an exception for some geos like the Bay Area (and maybe NYC?) where salary can go as high as $180k (or maybe $185k.. I don't know the exact number). That might be why levels.fyi reports higher than $160k (or it could just be lies) but the general gist is correct. Amazon has a hard cap on their salaries. Any pay over ~$180k (or whatever the number is) is given out as either cash bonus or as stock.
  - Zaheer 6y ago
    Ex-Amazon here. This is right - Bay Area cap is $185k.
  - bmcfeeley 6y ago
    Sure, no arguments here about the existence of a top end — that’s moving the goalposts though. There is not a hard cap at 160K. As an aside, is this materially different than any other FAANG? All the offers I’ve seen when browsing tools like levels.fyi scale much faster in stock/bonus compensation than in salary.
dantheman 6y ago
That's not true.

whycombagator 6y ago

I think that might only be reflective of base pay and not including stock. I would have guessed the total comp is multiples of the glassdoor figure

mh8h 6y ago

That's the base salary. Amazon has a cap on the salary. The rest of the compensation comes from bonuses and RSUs.