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Money does not scale linearly. It’s more of a function of the amazon stock growth. I was able to build wealth because I did the less orthodox path and held on t

Money does not scale linearly. It’s more of a function of the amazon stock growth. I was able to build wealth because I did the less orthodox path and held on to every share that ever vested for me starting from 2012. But even here, the company is not generous at all. Your stock grants vest 1-2 years out. If the stock climbs during that time, then in next year, you get no additional compensation. My initial years at amazon, I received little to no compensation increase, even with multiple promotions, because the stock had climbed significantly in value. So if they don’t give you more shares when the stock appreciates, then what happens if it doesn’t grow or declines? They try to compensate you by giving you more shares that vest over a 2 year time frame. So if the stock does good, you get screwed. If the stock performs poorly, you get screwed too.

nickjj 5y ago
> So if the stock does good, you get screwed. If the stock performs poorly, you get screwed too. Did something else bad happen at the company? I guess our definitions of screwed are slightly different. It sounds like they are giving you extra compensation in case your options happen to do poorly one year. They could have chosen to say "we can't control the market, you received 10 shares and whether they go up or down is out of our control". This way you win some and lose some based on the market. Even with having to wait for 2 years that's not too bad (it's basically free money). Holding for a year also means your stock compensation is taxed at long term capital gains instead of income. If I were working at a stable and successful public company I'd prefer stock options if you were comparing $1 in cash vs $1 in options. After taxes, etc. your options are going to be likely 20-25% more valuable due to less taxes (no risk) and it has the chance to potentially to go higher (risk involved). The only time it's worse is if the stock tanks hard (the 20-25% tax difference) but that's not going to be a common event in a company like Amazon. Combine that with you entering in 2012 when they were trading for 215 a share, that's a 15x return vs today. I guess I'm just having trouble seeing how that outcome isn't good. If you worked let's say 45 hours a week, combined with 10 years of a competitive tech salary + having options in a company that has had massive growth that's a combo where you end up being pretty much set for life (multiple millions of post-tax money available). Were you working something like 80 hours a week for 10 years straight? That would make the decision much harder but at the same time you're trading 10 years to never have to worry about money again so even then it's not a hard no, 80 probably is a hard no because but 60 hours brings it closer to "maybe, it depends".
- ozzythecat 5y ago
  >I guess our definitions of screwed are slightly different. It sounds like they are giving you extra compensation in case your options happen to do poorly one year. They could have chosen to say "we can't control the market, you received 10 shares and whether they go up or down is out of our control". This way you win some and lose some based on the market. Even with having to wait for 2 years that's not too bad (it's basically free money). I will try to explain again. Let me offer an example that captures one part of the problem. Let's say you join Amazon today (Day 1). In a year from now, let's say I promote you and give you increasing scope and responsibility. Now if the value of your previous stock grant (from Day 1) has appreciated, I will give you no additional compensation. As your manager, I can get you through multiple promotions without providing you any meaningful compensation increase since Day 1. Now because your compensation weighs heavily on stock vests, let's say Amazon's stock performs poorly, falling behind even the SP500. So, your total compensation this year will drop significantly. I will offer you additional stock grants that vest in a year from now and two years from now. So if you stay with me for at least two more years, you can "earn" the compensation that you did not receive THIS year. If the stock continues going side ways or drops next year, you can make next's years losses by staying another 2 years (3 years total). To put it bluntly, if you perform well and the company's stock increases, thank you very much. You previous stock grants have brought your compensation this year to its maximum. We won't have give you another dime. If you perform well and the company's stock doesn't increase or drops – that's too bad for you. This year, that's YOUR loss to deal with. If you stick with us two years, we'll "try" to give you back the money we "hoped" to pay you this year. >Were you working something like 80 hours a week for 10 years straight? There are few people in Amazon engineering that work 40 hours a week, and any organization that normalizes that will get either re-org'd or have their products/services completely canned. 55-60 hours is a baseline. 80 hour weeks is not unheard of, for even 6 months at a time. There is NEVER a down time. You do A and then you move on to B and then C. If you fail to do A or if you decide to take a break between B and C. We do stack ranking and drop whoever falls at the bottom of the stack, even if they're pretty dang good. Somebody HAS to be let go. No way around it.

nickjj 5y ago

> So if the stock does good, you get screwed. If the stock performs poorly, you get screwed too. Did something else bad happen at the company? I guess our definitions of screwed are slightly different. It sounds like they are giving you extra compensation in case your options happen to do poorly one year. They could have chosen to say "we can't control the market, you received 10 shares and whether they go up or down is out of our control". This way you win some and lose some based on the market. Even with having to wait for 2 years that's not too bad (it's basically free money). Holding for a year also means your stock compensation is taxed at long term capital gains instead of income. If I were working at a stable and successful public company I'd prefer stock options if you were comparing $1 in cash vs $1 in options. After taxes, etc. your options are going to be likely 20-25% more valuable due to less taxes (no risk) and it has the chance to potentially to go higher (risk involved). The only time it's worse is if the stock tanks hard (the 20-25% tax difference) but that's not going to be a common event in a company like Amazon. Combine that with you entering in 2012 when they were trading for 215 a share, that's a 15x return vs today. I guess I'm just having trouble seeing how that outcome isn't good. If you worked let's say 45 hours a week, combined with 10 years of a competitive tech salary + having options in a company that has had massive growth that's a combo where you end up being pretty much set for life (multiple millions of post-tax money available). Were you working something like 80 hours a week for 10 years straight? That would make the decision much harder but at the same time you're trading 10 years to never have to worry about money again so even then it's not a hard no, 80 probably is a hard no because but 60 hours brings it closer to "maybe, it depends".

ozzythecat 5y ago
>I guess our definitions of screwed are slightly different. It sounds like they are giving you extra compensation in case your options happen to do poorly one year. They could have chosen to say "we can't control the market, you received 10 shares and whether they go up or down is out of our control". This way you win some and lose some based on the market. Even with having to wait for 2 years that's not too bad (it's basically free money). I will try to explain again. Let me offer an example that captures one part of the problem. Let's say you join Amazon today (Day 1). In a year from now, let's say I promote you and give you increasing scope and responsibility. Now if the value of your previous stock grant (from Day 1) has appreciated, I will give you no additional compensation. As your manager, I can get you through multiple promotions without providing you any meaningful compensation increase since Day 1. Now because your compensation weighs heavily on stock vests, let's say Amazon's stock performs poorly, falling behind even the SP500. So, your total compensation this year will drop significantly. I will offer you additional stock grants that vest in a year from now and two years from now. So if you stay with me for at least two more years, you can "earn" the compensation that you did not receive THIS year. If the stock continues going side ways or drops next year, you can make next's years losses by staying another 2 years (3 years total). To put it bluntly, if you perform well and the company's stock increases, thank you very much. You previous stock grants have brought your compensation this year to its maximum. We won't have give you another dime. If you perform well and the company's stock doesn't increase or drops – that's too bad for you. This year, that's YOUR loss to deal with. If you stick with us two years, we'll "try" to give you back the money we "hoped" to pay you this year. >Were you working something like 80 hours a week for 10 years straight? There are few people in Amazon engineering that work 40 hours a week, and any organization that normalizes that will get either re-org'd or have their products/services completely canned. 55-60 hours is a baseline. 80 hour weeks is not unheard of, for even 6 months at a time. There is NEVER a down time. You do A and then you move on to B and then C. If you fail to do A or if you decide to take a break between B and C. We do stack ranking and drop whoever falls at the bottom of the stack, even if they're pretty dang good. Somebody HAS to be let go. No way around it.