4 ms·

When the average tenure is 1.8 years, it certainly is working. That's nearly 50% of their tenure resulting in less than 20% of their equity vesting. The way Am

by dymk 5y ago

When the average tenure is 1.8 years, it certainly is working. That's nearly 50% of their tenure resulting in less than 20% of their equity vesting. The way Amazon does vesting is a scam for any engineer willing to work there, IMO. Big shiny number that they can dangle in front of engineers, and everybody thinks "Oh, sure I can do 4 years for that..."

banana-19 5y ago
For SDEs median is closer to 2.2. But that just talks about those that are still there though. It doesn't show when those that are not quit.
AitchEmArsey 5y ago
"Their equity" is the wrong way of thinking about it - the RSU schedule is fully visible up front, and in the first 2 years low RSU grants are offset by a sign-on bonus. In my case, I was told what my target TC per year was, and that is what I've received (at minimum), just made up of a varying mix of bonus and RSUs. Saying that un-vested RSUs are "mine" is like laying claim to next year's salary before having done any of the work to earn it.
- bin_bash 5y ago
  I'm pretty sure every other big tech company offers sign on bonuses with an evenly distributed vesting schedule.
  - ldjkfkdsjnv 5y ago
    - bin_bash 5y ago
      what a poor comment. What would've been nice if you could've explained what I'm missing. For the record I work at a different big tech company and was given a massive sign-on bonus. I also have received an offer from Amazon in the past. I know how to read levels.fyi so I'm not sure what it is that I'm missing exactly.
      - MisterPea 5y ago
        If Amazon and a standard tech company both gave ~200k offers with a 100k base they would look like this: Amazon: 100k base, 250k stock over 4 years (5-15-40-40), ~175k sign-on over 2 years Other: 100k base, 400k stock over 4 years (25-25-25-25), ~25k sign-on immediately Essentially the lack of stock over the first 2 years is offset by the sign-on
        RussianCow 5y ago
        What company is only giving $25k in signing bonuses? Everyone I know who works at a (non-Amazon) FAANG got significantly more than that.
        MisterPea 5y ago
        For what role/company? A 200k offer implies SDE 1/2 and a 25k sign-on is probably median for that, even big tech. Of course there is Meta giving insane sign-on but for the most part it's around 25k
        RussianCow 5y ago
        I assumed those numbers were made up to show scale. Is Amazon really giving $175k sign-on bonuses to SDE 1/2 positions? Are their sign-on bonuses ~7x higher than other companies' for higher level positions as well? That seems crazy.
        potatolicious 5y ago
        I think the point is that (using your example) you can get a 100K base, 400K stock, and the 175K signon at a different company. The point is that while Amazon may offer you a higher signon in lieue of equity, at other FAANGs the choice can be both. FWIW I've seen recently (in the past year or so) non-AMZN FAANG sign-ons well north of $200K (split over 2 years), along with a top-of-line stock package that vests linearly. Overall, AMZN's backloaded vesting schedule may be "evened out" via the use of generous signing bonuses, but ultimately is still uncompetitive with other FAANGs. More generally AMZN's TC - no matter which way you cut it - tends to trend lower than competing-tier peer companies.
  - ctvo 5y ago
    What are your big tech companies? Does it include Google? If so, your statement is incorrect. More correct: Of the big tech companies, only Amazon structures its RSU so it's heavily backloaded.
    - chhamilton 5y ago
      Exactly this. Google sign-on equity is actually front loaded now: 33%, 33%, 22%, 12%. Refresh grants (nominally every year) vest equally at 25% per year. Vests are monthly or quarterly, depending on the size of your grant. Since initial grants are larger (roughly 2x) than refresher grants, the equal vesting of the initial grant (old behavior) could cause a significant drop in compensation for new hires after 4 years at the company (the dreaded equity cliff). This would only happen for relatively "flat" performers, as if you're on an upwards trajectory the larger size of later grants would eventually catch up to your initial equity grant. Let's say the sign on equity was 200 shares, and refreshers were 100. With equal vesting it would look like: Year 1: 50 shares Year 2: 50 + 1 x 25 = 75 shares total Year 3: 50 + 2 x 25 = 100 shares total Year 4: 50 + 3 x 25 = 125 shares total Years 5+: 4 x 25 = 100 shares total (20% drop!) The problem has actually been worse, because grants are actually in dollars and the stock has been growing consistently year over year. Which means earlier grants are worth more in dollars in later years than new grants, despite having the same dollar value at the time of issue. Let's say 20% yoy, which is not far off from average over the last 10 years. We'll work in dollars and say the initial grant was worth $200K at sign-on time and later grants worth $100K. Year 1: $50K = $50K Year 2: $50K * 1.2 + $25K = $85K Year 3: $50K * 1.2^2 + $25K * 1.2 + $25K = $127K Year 4: $50K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $177.4K Years 5+: $25K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $134.2K (23% drop!) With the frontloading this becomes: Year 1: 66 shares Year 2: 66 + 1 x 25 = 91 shares Year 3: 44 + 2 x 25 = 94 shares Year 4: 12 + 3 x 25 = 87 shares (7% drop) Years 5+: 4 x 25 = 100 shares With stock appreciation this becomes: Year 1: $66K Year 2: $66K * 1.2 + $25K = $104K Year 3: $44K * 1.2^2 + $25K * 1.2 + $25K = $118.4K Year 4: $24k * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $132.5K Years 5+: $25K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $134.2K So the dip is entirely smoothed over. Add in natural increases do to career growth and you no longer notice it.
LatteLazy 5y ago
It's only a scam if you assume the first year you work there you are as productive as the 3rd. It takes most people at least 3 months just to get started, let alone actually contribute. Based on that, I don't think it's unreasonable to pay less for the first X months etc. That's all this is really. It's pretty standard in Finance that you're not eligible for a bonus until you have been with the company for a full year for exactly this reason.
- dymk 5y ago
  > It's only a scam if you assume the first year you work there you are as productive as the 3rd It's a scam when it's compared to how every other tech company does it. The standard is a 1 year cliff at which point you get 25%, then uniform vesting every quarter. > that you're not eligible for a bonus until you have been with the company for a full year for exactly this reason This is exactly the standard in tech as well, but we're talking about an equity grant vesting schedule, not a bonus payout.
  - discodave 5y ago
    Do you get a sign on bonus thats like 50% of TC for the first two years at other companies? Because thats what amazon does.
    - dymk 5y ago
      First sign on was ~25% of my base salary, and ~15% for every subsequent year. That does change the math if Amazon is giving $100k bonuses each year for the first two years.
    - ssfrr 5y ago
      Yeah, I wonder if that's part of the confusion. "Signing Bonus" is a weird name for what amounts to a large salary boost for the first 2 years. I think a lot of people think of a signing bonus as a lump sum you get when you are hired.
  - mrandish 5y ago
    > It's a scam when it's compared to how every other tech company does it. Often but not always. I worked as a senior exec in a near-FAANG, large public corp and at one point the board changed the equity comp of my level and up execs to a pretty complex formula that was significantly back-ended but also had possible multipliers in the event our stock metrics exceeded the avg stock metrics of a composite of several similar firms in similar markets. At the time it was started, a lot of us assumed we might get about the same at the end of the day and maybe a little more but have to wait longer for it. After four years, we actually maxed all the multipliers and ended up making >200% what we would have under the previous standard vesting. I heard that HR and the board comp committee felt they'd made a 'mistake' because we'd ended up getting so much more than the 'intended' range - however, we also worked our asses off and the companies stock was soaring, so they couldn't really complain. BTW, the net-effect of the back-loaded vesting and soaring stock was that we all ended up holding for longer than we otherwise might have which ended up adding nearly another 100%. Since we're already talking about pretty hefty comp numbers, post-multipliers plus a ~doubling of the stock price, it ended up being life-changing money. Good times, indeed. So, not every 'non-standard' equity vesting schedule is necessarily a bad thing. Sometimes they are structured as a set of trade-offs, where the downsides are balanced by upsides tied to certain things and need to be assessed on that basis.
habitue 5y ago
Scam is the wrong way to look at it. Basically, it's like airlines charging you fees for overhead baggage. If you can get into a big tech company without back-weighted vesting, of course you're going to take that. The difference is on the margin. Developers who went to tier C schools, 3.X GPA, 2-sigma IQs instead of 3, they have a shot at getting into Amazon and actually making way more and getting much better equity than they would working in IT at their local HR company (<$100K salary, negligible to 0 equity) Again though, if you are capable of getting into any other FAANG, of course do it.
- Xeronate 5y ago
  All FAANG interviews are easily studied and passable by anyone that's motivated. Ridiculous to imply FAANG only hires geniuses. And since sign on bonus offsets backloaded vesting it hardly matters unless you truly believe amazon stock growth is going to rapidly increase in the next two years (and even then you could just buy the stock yourself with your bonus).
avrionov 5y ago
The average tenure numbers are misleading when a company rapidly expands and hires many new people.
- dymk 5y ago
  I don't believe it is. My understanding is the 1.8 years average figure is how long those who already departed had stayed for. I might be wrong though, where I heard it from didn't specify.
  - avrionov 5y ago
    It will be good to know how tenure is calculated. It is not sustainable to hire 30% more each year and most of them to leave in years.
ssfrr 5y ago
The "waiting for my vesting" mindset only makes sense to me if your TC is back-loaded, but I think Amazon offers are usually pretty consistent TC over the first 4 years, it's just that the balance shifts from bonus to stock. So lets' say I start in January with 5% vesting after 1year, 15% after 2 years, and 20% every 6mo for the next 2 years. The signing bonus starts large and then shrinks proportionally to keep the TC constant. In my mind the only change is that my salary gets more "lumpy" at the end because I'm getting paid every 6mo instead of every 2wks. So right before a vest I'm thinking "it's worth it to stay for 1 more week for 20% of my stock" but right after a vest the question is "is it worth it to stay 6months for 20% of my stock and 6 months of base pay?". That latter question seems the same whether my TC is cash or stock.
- jedberg 5y ago
  Let's say Amazon stock doubles in the first two years you work there. So maybe your TC was $250K your first two years, but if you stay that third year, you'll vest in $500K in stock, and if it keeps going up, that fourth year might be $800K in stock (which up until 18 months ago was pretty common). So you'll get people who can't walk away because they can't get TC of $500K somewhere else.

by dymk 5y ago

banana-19 5y ago

For SDEs median is closer to 2.2. But that just talks about those that are still there though. It doesn't show when those that are not quit.

AitchEmArsey 5y ago

"Their equity" is the wrong way of thinking about it - the RSU schedule is fully visible up front, and in the first 2 years low RSU grants are offset by a sign-on bonus. In my case, I was told what my target TC per year was, and that is what I've received (at minimum), just made up of a varying mix of bonus and RSUs. Saying that un-vested RSUs are "mine" is like laying claim to next year's salary before having done any of the work to earn it.

bin_bash 5y ago
I'm pretty sure every other big tech company offers sign on bonuses with an evenly distributed vesting schedule.
- ldjkfkdsjnv 5y ago
  - bin_bash 5y ago
    what a poor comment. What would've been nice if you could've explained what I'm missing. For the record I work at a different big tech company and was given a massive sign-on bonus. I also have received an offer from Amazon in the past. I know how to read levels.fyi so I'm not sure what it is that I'm missing exactly.
    - MisterPea 5y ago
      If Amazon and a standard tech company both gave ~200k offers with a 100k base they would look like this: Amazon: 100k base, 250k stock over 4 years (5-15-40-40), ~175k sign-on over 2 years Other: 100k base, 400k stock over 4 years (25-25-25-25), ~25k sign-on immediately Essentially the lack of stock over the first 2 years is offset by the sign-on
      - RussianCow 5y ago
        What company is only giving $25k in signing bonuses? Everyone I know who works at a (non-Amazon) FAANG got significantly more than that.
        MisterPea 5y ago
        For what role/company? A 200k offer implies SDE 1/2 and a 25k sign-on is probably median for that, even big tech. Of course there is Meta giving insane sign-on but for the most part it's around 25k
        RussianCow 5y ago
        I assumed those numbers were made up to show scale. Is Amazon really giving $175k sign-on bonuses to SDE 1/2 positions? Are their sign-on bonuses ~7x higher than other companies' for higher level positions as well? That seems crazy.
      - potatolicious 5y ago
        I think the point is that (using your example) you can get a 100K base, 400K stock, and the 175K signon at a different company. The point is that while Amazon may offer you a higher signon in lieue of equity, at other FAANGs the choice can be both. FWIW I've seen recently (in the past year or so) non-AMZN FAANG sign-ons well north of $200K (split over 2 years), along with a top-of-line stock package that vests linearly. Overall, AMZN's backloaded vesting schedule may be "evened out" via the use of generous signing bonuses, but ultimately is still uncompetitive with other FAANGs. More generally AMZN's TC - no matter which way you cut it - tends to trend lower than competing-tier peer companies.
- ctvo 5y ago
  What are your big tech companies? Does it include Google? If so, your statement is incorrect. More correct: Of the big tech companies, only Amazon structures its RSU so it's heavily backloaded.
  - chhamilton 5y ago
    Exactly this. Google sign-on equity is actually front loaded now: 33%, 33%, 22%, 12%. Refresh grants (nominally every year) vest equally at 25% per year. Vests are monthly or quarterly, depending on the size of your grant. Since initial grants are larger (roughly 2x) than refresher grants, the equal vesting of the initial grant (old behavior) could cause a significant drop in compensation for new hires after 4 years at the company (the dreaded equity cliff). This would only happen for relatively "flat" performers, as if you're on an upwards trajectory the larger size of later grants would eventually catch up to your initial equity grant. Let's say the sign on equity was 200 shares, and refreshers were 100. With equal vesting it would look like: Year 1: 50 shares Year 2: 50 + 1 x 25 = 75 shares total Year 3: 50 + 2 x 25 = 100 shares total Year 4: 50 + 3 x 25 = 125 shares total Years 5+: 4 x 25 = 100 shares total (20% drop!) The problem has actually been worse, because grants are actually in dollars and the stock has been growing consistently year over year. Which means earlier grants are worth more in dollars in later years than new grants, despite having the same dollar value at the time of issue. Let's say 20% yoy, which is not far off from average over the last 10 years. We'll work in dollars and say the initial grant was worth $200K at sign-on time and later grants worth $100K. Year 1: $50K = $50K Year 2: $50K * 1.2 + $25K = $85K Year 3: $50K * 1.2^2 + $25K * 1.2 + $25K = $127K Year 4: $50K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $177.4K Years 5+: $25K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $134.2K (23% drop!) With the frontloading this becomes: Year 1: 66 shares Year 2: 66 + 1 x 25 = 91 shares Year 3: 44 + 2 x 25 = 94 shares Year 4: 12 + 3 x 25 = 87 shares (7% drop) Years 5+: 4 x 25 = 100 shares With stock appreciation this becomes: Year 1: $66K Year 2: $66K * 1.2 + $25K = $104K Year 3: $44K * 1.2^2 + $25K * 1.2 + $25K = $118.4K Year 4: $24k * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $132.5K Years 5+: $25K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $134.2K So the dip is entirely smoothed over. Add in natural increases do to career growth and you no longer notice it.

LatteLazy 5y ago

It's only a scam if you assume the first year you work there you are as productive as the 3rd. It takes most people at least 3 months just to get started, let alone actually contribute. Based on that, I don't think it's unreasonable to pay less for the first X months etc. That's all this is really. It's pretty standard in Finance that you're not eligible for a bonus until you have been with the company for a full year for exactly this reason.

dymk 5y ago
> It's only a scam if you assume the first year you work there you are as productive as the 3rd It's a scam when it's compared to how every other tech company does it. The standard is a 1 year cliff at which point you get 25%, then uniform vesting every quarter. > that you're not eligible for a bonus until you have been with the company for a full year for exactly this reason This is exactly the standard in tech as well, but we're talking about an equity grant vesting schedule, not a bonus payout.
- discodave 5y ago
  Do you get a sign on bonus thats like 50% of TC for the first two years at other companies? Because thats what amazon does.
  - dymk 5y ago
    First sign on was ~25% of my base salary, and ~15% for every subsequent year. That does change the math if Amazon is giving $100k bonuses each year for the first two years.
  - ssfrr 5y ago
    Yeah, I wonder if that's part of the confusion. "Signing Bonus" is a weird name for what amounts to a large salary boost for the first 2 years. I think a lot of people think of a signing bonus as a lump sum you get when you are hired.
- mrandish 5y ago
  > It's a scam when it's compared to how every other tech company does it. Often but not always. I worked as a senior exec in a near-FAANG, large public corp and at one point the board changed the equity comp of my level and up execs to a pretty complex formula that was significantly back-ended but also had possible multipliers in the event our stock metrics exceeded the avg stock metrics of a composite of several similar firms in similar markets. At the time it was started, a lot of us assumed we might get about the same at the end of the day and maybe a little more but have to wait longer for it. After four years, we actually maxed all the multipliers and ended up making >200% what we would have under the previous standard vesting. I heard that HR and the board comp committee felt they'd made a 'mistake' because we'd ended up getting so much more than the 'intended' range - however, we also worked our asses off and the companies stock was soaring, so they couldn't really complain. BTW, the net-effect of the back-loaded vesting and soaring stock was that we all ended up holding for longer than we otherwise might have which ended up adding nearly another 100%. Since we're already talking about pretty hefty comp numbers, post-multipliers plus a ~doubling of the stock price, it ended up being life-changing money. Good times, indeed. So, not every 'non-standard' equity vesting schedule is necessarily a bad thing. Sometimes they are structured as a set of trade-offs, where the downsides are balanced by upsides tied to certain things and need to be assessed on that basis.

habitue 5y ago

Scam is the wrong way to look at it. Basically, it's like airlines charging you fees for overhead baggage. If you can get into a big tech company without back-weighted vesting, of course you're going to take that. The difference is on the margin. Developers who went to tier C schools, 3.X GPA, 2-sigma IQs instead of 3, they have a shot at getting into Amazon and actually making way more and getting much better equity than they would working in IT at their local HR company (<$100K salary, negligible to 0 equity) Again though, if you are capable of getting into any other FAANG, of course do it.

Xeronate 5y ago
All FAANG interviews are easily studied and passable by anyone that's motivated. Ridiculous to imply FAANG only hires geniuses. And since sign on bonus offsets backloaded vesting it hardly matters unless you truly believe amazon stock growth is going to rapidly increase in the next two years (and even then you could just buy the stock yourself with your bonus).

avrionov 5y ago

The average tenure numbers are misleading when a company rapidly expands and hires many new people.

dymk 5y ago
I don't believe it is. My understanding is the 1.8 years average figure is how long those who already departed had stayed for. I might be wrong though, where I heard it from didn't specify.
- avrionov 5y ago
  It will be good to know how tenure is calculated. It is not sustainable to hire 30% more each year and most of them to leave in years.

ssfrr 5y ago

The "waiting for my vesting" mindset only makes sense to me if your TC is back-loaded, but I think Amazon offers are usually pretty consistent TC over the first 4 years, it's just that the balance shifts from bonus to stock. So lets' say I start in January with 5% vesting after 1year, 15% after 2 years, and 20% every 6mo for the next 2 years. The signing bonus starts large and then shrinks proportionally to keep the TC constant. In my mind the only change is that my salary gets more "lumpy" at the end because I'm getting paid every 6mo instead of every 2wks. So right before a vest I'm thinking "it's worth it to stay for 1 more week for 20% of my stock" but right after a vest the question is "is it worth it to stay 6months for 20% of my stock and 6 months of base pay?". That latter question seems the same whether my TC is cash or stock.

jedberg 5y ago
Let's say Amazon stock doubles in the first two years you work there. So maybe your TC was $250K your first two years, but if you stay that third year, you'll vest in $500K in stock, and if it keeps going up, that fourth year might be $800K in stock (which up until 18 months ago was pretty common). So you'll get people who can't walk away because they can't get TC of $500K somewhere else.