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Ask HN: Has your total compensation drastically changed with the stock downturn?
I’m curious for those who receive a significant percentage of their compensation in stock or options if your total comp has drastically changed this year, and if your employer is actually doing anything to make up for it or not.
- pyuser314 4y agoThe flip - as shares increase, are they then supposed to remove compensation? The short answer is no.
- user_named 4y agoYou get the grant in the contract. New grants are adjusted based on share price.
- a10c 4y agoI would've thought retention grants were based on a total dollar figure rather than share price. That's how its worked for me at my current employer (now 8 years)
- shepherdjerred 4y agoThis is essentially how it worked at Amazon/AWS. When raise season came around you would get less of a raise because stocks increased. I told my boss I was dissatisfied with my paltry 2%, and he told me there was nothing he could do because my projected stock grants had increased so much from when I had started that he couldn’t give me any more.
- didibus 4y agoWhere I've worked they do. Finance has a target in mind, and they take into account your vesting coming up in the year and pay you less based on how much they think those vestings are going to give you. So if your salary is 100k, and they want to pay you 200k, and they see you've got 35 RSU vesting during the year and they predict that will net you 80k, then they'll top it off with an additional 20k worth of RSUs. Basically the stock increase is accounted for. Those 20k worth of RSUs will vest say next year, and if next year they're now worth 60k, they'll just give you less RSUs again, because now they'll repeat the same math, and see you're probably going to make 160k.
- muzani 4y agoThat's kind of the point of stock being part of TC isn't it?
- draw_down 4y ago
- eru 4y agoDepends a bit. It's perhaps easier to see when you compare this with a discretionary bonus paid in cash. The company can decide on the bonus depending on how well you did and how much money the company has to spare. The implied deal with employees is that they'll leave if the bonus is too low for their liking for too long. Overall a pretty decent deal for people with enough base to make ends meet and a deal with lots of flexibility for the employer. An established company like Google might have seen its share price fall recently, but still have plenty of money to spare and, importantly!, its competitors might also still have lots of money to spare. For historical and institutional reasons Google like to give out a lot of stock as part of its compensation, cash bonuses play a smaller role. So if the value of stock goes down and they want to / have to keep the value of total compensation high, they would want to make up for the recent drop in stock prices by giving employees more shares. Does that make sense? > That's kind of the point of stock being part of TC isn't it? In comparison, for a cash-strapped startup, you are exactly right, and for them the drop in total comp that comes with a drop in share price is exactly the point.
- muzani 4y agoIn this case, most of the competitors have lost stock value too, so it's a "fair" pay cut when things are going poorly for the economy as a whole. There's usually the offer of cash vs stock, and the employee gambles accordingly. If they're going to get compensated for the drop in stock too, why even ask for more cash?
- eru 4y agoAt eg Google (at least when I was there for a few years from 2014 onwards), basically everyone on the same level and in the same location got the same amount of cash. The amount of stock was variable, based on how badly they wanted you to join (or keep you) and how well you negotiated. There was never any option to ask for proportionally more cash or more stock. The stock vested over time and the grant was typically renewed every year. So that you basically could plan to receive a relatively fixed proportion of your total comp in newly vested stock every year. From a financial point of view the newly vested stock was basically as good as cash: you could sell it straight away. > In this case, most of the competitors have lost stock value too, so it's a "fair" pay cut when things are going poorly for the economy as a whole. Look at the qualifiers in my previous comment. It doesn't matter what's 'fair', what matters is what the competition is up. If Facebook is still sitting on piles of cash and eager to spend it on employees, Google can't let their total comp drop too much, even if both companies have lost total market value. If Facebook (and other competitors) spend less, Google will also have to spend less. That's not the same as the state of the economy as a whole, but it's related to it. > If they're going to get compensated for the drop in stock too, why even ask for more cash? As said earlier, at Google (at least back then) asking for more cash wasn't an option.
- freeqaz 4y agoMaybe a silly question but how are Netflix employees faring with this change? I know that Netflix is famous for paying 99% cash. How does that work when the stock crashes 80%?
- ed25519FUUU 4y agoThey automatically get 5% of their base salary as discounted non-qualified options, which are worth nothing now going back to like 2018 or 2019. Some people elect to do up to 100% or their salary as nonquals and they’re probably hurting but the expiration is 10 years.
- ununoctium87 4y agoThey get to choose what proportion of their pay is cash cash stock
- datalopers 4y agoTheir compensation is 99% cash so it doesn't change.
- deleted 4y ago[deleted]
- spidermanjones 4y agoMine's gone down to $0 (laid off yesterday).
- xbar 4y agoI'm sad to hear it. Part of a large batch of lay-offs?
- spidermanjones 4y agoIt was, yep.
- mym1990 4y agoSorry to hear about that, was it a small/medium/large company?
- spidermanjones 4y agoMedium startup.
- glitchc 4y agoTesla?
- gnicholas 4y agoI started working at Oracle nearly a decade ago, after the stock had gone up significantly. After this peak, the stock was not really expected to go up much in the next couple years. Around that time, they started giving employees a choice between options and RSUs. The thinking was that options are worthless if the strike price isn't hit, whereas RSUs can drop in value but not to zero. If they're not doing so already, I imagine other employers will start offering RSUs as well.
- Thorrez 4y agoFAMGA already offer RSUs.
- water-your-self 4y agoAMF in GA seating.
- denysvitali 4y agoNow it should be called MAMGA
- boatsie 4y agoMAMAA actually.
- denysvitali 4y agoOh right! But you still say "I work at Google", instead of "I work at Alphabet"
- zeroonetwothree 4y agoMine is down about 25% so quite a bit. That said I made 7 figures last year so it’s not as if I’m struggling.
- neal_jones 4y agoMaking one very large figure less than you, mind sharing any about what you do?
- zeroonetwothree 4y agoL7 equivalent software engineer at a big tech company
- Victerius 4y agoHow many years of experience? I assume at least 15.
- zeroonetwothree 4y ago12 years
- ZephyrBlu 4y agoL7 = Senior Staff?
- chirau 4y ago7? Nice. What do you do?
- scarface74 4y agoActually because of the vagaries of my four year offer and timing, it actually went up by $10K this calendar year. But if the stock doesn’t rebound or I don’t get a raise. It will go down next year. I started working at my current company in mid 2020. Most of my compensation for the first two years were cash (base + prorated signing bonus) and I didn’t get any real amount of stock until earlier this month and for the next two years. Yes I know, how do you say which BigTech company you work for without saying which company you work for
- q7xvh97o2pDhNrh 4y agoOh, don't worry. You said it very clearly. ;)
- Cerium 4y agoIt depends on how you count it and how you receive stock compensation? My not yet vested shares have gone down quite a bit. On that angle, I guess you can say your total compensation will drop since the shares that vest this year will be worth less. If you look at your yearly grants + cash, then I expect it to stay the same for most people. Many equity plans grant a percentage of your cash compensation as stock. Personally, I am somewhat dismayed when I see smaller numbers, but I am also looking forward to an opportunity to get many more shares at a good price.
- MikeTheRocker 4y agoMy total compensation dropped about 20%. It was definitely a meaningful motivator to switch jobs. I started a new job this month, which put me back at market rate for my level and geo, plus a modest raise. Many people advise staying put during economic downturns for stability, but I actually think switching jobs is quite advantageous because you can get more shares per dollar in your initial equity grant. My shares at the new company were granted at a price ~25% down from peak. I'm optimistic the market will turn around in the next 12-24 months, leaving me with some handsome appreciation I would not have otherwise seen.
- dasil003 4y agoIt really depends on how close you think we are to the bottom. Of course no one can say for sure, but as someone who came of age in the first dotcom bubble, and now finds himself surrounded by a generation of young engineers who has never known anything but a bull market, I think it's worth pointing out that the S&P has only fallen to Feb 2021 levels. We are still well above where the market was just prior to the pandemic, at which point we had already experienced a historic decade plus bull run on tech stocks which was then amplified by quarantine and everything needing to be done remotely. I wouldn't be surprised if we're flat or down further 12-24 months from now.
- MikeTheRocker 4y agoYeah, that's possible too. I'm certainly no economic expert, but my understanding is that bear markets typically last less than 2 years on average. But who knows? Your guess is as good as mine.
- jfim 4y ago> bear markets typically last less than 2 years on average According to a quick Google search, bull markets also last four to six years on average. The current bull market has been going on for about thirteen years now.
- 4y ago
- Mandatum 4y agoYes. Employer isn’t doing anything to correct it. Actively interviewing as I wait for RSU cliff,
- djtango 4y agoWhen I was at Amazon I asked about this but in relation to the dotcom bust and if memory serves me right, they did a one-time top up for everyone who was massively down due to "x% salary SBC" as the x while variable, formed a decent part of people's living expenses.
- allthecybers 4y agoI’m almost to my 5th anniversary at a FAANG so my base has grown a bit this year but my stock award refreshers are pretty anemic. With the stock downturn it’s barely worth much. The CEO was asked if the company planned to make up for the downturn and he fumbled through a non-answer pretty hard. I’m working on some interesting stuff in a fairly specialized niche inside a well resourced part of the company. So I’m consciously making a trade off of falling behind on total comp but working on something I enjoy and hopefully staying employed through a downturn.
- HWR_14 4y ago> he CEO was asked if the company planned to make up for the downturn Why on earth would they? If the stock price had 10x'ed would you have returned the money to the company?
- synu 4y agoIf they don’t want people to leave for places without underwater options they may need to do something.
- Gortal278 4y agoRetention is a valid reason. Why stay when a job hop will get you back at your target comp while stocks are low.
- water-your-self 4y agoWhy complain? Just job hop. Oh wait, the people who complain dont want to job hop. Now we found the root of the problem. Stay and complain is just a longer way of saying you wont leave over this.
- synu 4y agoMaybe they have friends or like parts of their current job? They’d leave for more compensation if they have to, but would prefer not to have to. Seems reasonable. Leaving any time you are dissatisfied about something without first asking if it could be improved doesn’t seem like the best strategy.
- plorkyeran 4y agoIf things have now stabilized, my TC for 2022 will be down about 25% from what it would have been if our stock price stayed flat at the Jan 1 price. It'll still be over 50% higher than what it would have been if our stock stayed flat over the last four years and my refreshes were all the same size in dollars.
- whateveracct 4y agoAround the end of 2021, I got a new job and negotiated a big salary bump for a startup on the basis of my total comp and not base. It wasn't a huge raise total comp-wise (excluding options), but it was all cash./ The company I left tanked recently (more than the market). Thank goodness I did what I did lol.
- lutorm 4y agoI work for a privately held company so, no, our valuation (if you believe it) has not dropped and so neither has the paper value of my equity compensation.
- angarg12 4y agoYes, about 15% less. On the other hand I got promoted and my promo stock was valued near the bottom from last year. When the market recovers I expect my upside will be larger than the loss, overall.
- water-your-self 4y agoWhat if the market recovery takes 10 years
- borroka 4y agoOne of my bonuses went down 40%, but TC only down 5-7%. Not so much for the stock market downturn, though (maybe 20% of that 40%). I will survive, deeply irritated, but still breathing.
- loeg 4y agoYeah, total comp down by 20-30% depending on how you define the "before" value of the stock (somewhat complicated by a refresher after the stock had lost some value but before recent lows). Still ~10% better than my other offers at the time I took this position and ~50% better than my previous employer, though.
- kodah 4y agoMy companies stock has fallen nearly 50% from it's peak this year. Leadership originally told me they wouldn't do anything when I pointed out average rent (I am single) was rising over half my paycheck and that my stocks had fallen greatly. I went all the way to HR with it, even demonstrating that under these conditions their new target software engineer was required to be married to another high income earner in both the Bay and San Diego. HR could do nothing. Eventually we had a town hall with hundreds of complaints, sometime later the CEO sent out an email saying they were raising our salaries 20% (which is still nowhere near market) across the entire company rather than addressing issues in specific markets. I'm turning in my notice after my bonus period and accepted a position with a substantial increase in base, stocks, and bonus pool. The position is also remote, which is another thing my current company told me will never happen.
- cbo100 4y agoIsn't that the gamble of choosing a position where such a large proportion of your income is based on a volatile stock price? If you want protection from the company on the downside would you accept the company setting a maximum on the upside?
- deleted 4y ago[deleted]
- WA 4y agoGoes both ways. It is also a gamble by the company. They give employees stock and let the market pay for the salary instead of paying huge salaries in cash.
- kodah 4y agoMy yearly RSUs are big, but I set my base salary up to cover all of my expenses and give me spending money. RSUs go straight into investment vehicles after they reach maturity. That's to say, I don't depend that much on stocks, but they are the critical path to getting a house in this market, which is also the critical path to lowering most of my expenses.
- 4y ago
- asd88 4y agoYes, down 30% from my original offer TC from about a year ago. Meanwhile, new hires are getting offers 15% higher than my original offer. I’ll likely leave this year unless the company does something about it.
- cricalix 4y agoI don't consider RSUs to be monetary compensation that's guaranteed; I see them more like the bonus that's written into my contract. Thus, my evaluation of pay is based pretty much on base salary. Has the bonus via RSUs taken a hit? Yes. Am I still earning well above the national average? Yes, about 2.5x. Could I find another job that would increase the base salary? Eh, maybe, maybe not. I haven't job hunted for over a decade now (which goes against the general HN view on job tenure), because I don't need to earn more than I currently do - I have a job that I'm comfortable in, and do things I enjoy with autonomy.
- mgraczyk 4y agoIf the stock is liquid when it vests, then this is not a good way to analyze your compensation. Like it or not, part of your pay is in stock and you have to deal with the increased risk associated with it. Valuing the stock at 0 is wrong. Valuing it the same as cash is wrong unless you have a very particular risk preference.
- edumucelli 4y agoAs parent commenter I value it at 0. When I go on a coffee shop and want to pay with stocks they say they don't accept it. So, if I can't even buy a coffee with stocks they have 0 value for me. Base or GTFOH.
- xboxnolifes 4y agoIf you really value your stock at $0, then I'll gladly trade you $0 for it.
- deleted 4y ago[deleted]
- mgraczyk 4y agoBut that's just wrong and you'll misunderstand offers if you compare them that way. Your coffee shop also won't accept the cash in your bank account. You have to transfer it to them somehow. There's very little different between that and selling shares, followed by a payment.
- notimetorelax 4y agoIt’s a tax benefit, in a way. I live and work in Switzerland, here the tax is paid on vesting. So, if stocks are down when vested it’s beneficial for my tax bill. I don’t mind waiting a year or more for them to go up again.
- boopboopbadoop 4y agoThat’s like saying you’d take 50k and pay 10k in tax, rather than have 100k and pay 20k in tax.
- searedsteak 4y agoIt's like paying 10k in tax over 100k, you just need to wait a year. At least, that's how I interpret the comment
- boopboopbadoop 4y agoBut then you’d owe tax on the 50k profit you made. Besides, nothing is ever guaranteed!
- notimetorelax 4y agoBasically I concur what searedsteak wrote. Would add that stock grant in the company is in number of shares and is paid out over 4 years. So, I really like low stock prices when they vest (taxable event), while capital gains is 0 for non professional investors. So, unless you intended to sell stock right out there’s no difference and only gain. I never sell shares of my company.
- Schweigi 4y agoSwitzerland doesn’t have capital gains tax except for professional stock traders. So there wouldn’t be any tax on the gain after vesting. But yeah it’s a gamble on the stock price that’s for sure.
- throwaway9231 4y agoI joined my company last year when the stock was at an all time high and at the current price my total comp has dropped about 15%. I asked whether they planned to make up for this, and the response from HR was essentially that it's tough luck. I totally understand, that's how the stock market works, but it has definitely accelerated my plans to start looking around elsewhere (which would probably have happened anyway, it's not quite the right place for me). That said, I don't know what the actual refresher amount will be so it might be that it balances out somewhat.
- airbreather 4y agoIt's never actually money until you take it off the table and bank it as dollars accepted as legal tender for the majority of goods and services - many a slip twixt the cup and the lip...
- web007 4y agoTC included RSUs this year, with a fixed-dollar conversion for the quarter after grant - $XYZ dollars, to be divided by trailing N-day stock price on $date and granted as RSUs. Roughly, grant ended up at $5 conversion rate, by the time we could sell it was $4, and now it's $2. So $100k in comp is currently selling for $40k. I haven't heard anything about an adjustment or the possibility of additional grants. For now I'm more concerned that we're approaching break-even on my ISO valuation from 2+ years ago, after a 52-week high (during trade blackout) that would've given me Dos Commas status.
- WWLink 4y agoI was never compensated in stock, but I did get a 5.6% raise. Exciting I know. WOOO!!!!! My compensation is hot garbage compared to a top tech company, but the work is really fun, so there's that! Like seriously, there are some top tech companies doing some really cool side projects, but the vast majority of their jobs aren't as cool. And the base salary is.. surprisingly comparable.
- mariojv 4y agoYes, total comp decreased by about 20%. They did try to make it right: I got a merit base salary increase of about 9%, and the company gave a top up RSU grant when they usually do stock refreshers once annually. I appreciated that, but this wasn't enough to make up for the stock crashing hard. I'm pushing hard for a promotion to try and somewhat make up for it. When I started working here I thought of RSUs as a casino and never counted on them for living expenses, but they've become such a huge part of my total comp that it still stings mentally a bit. I'm still very well paid, but we have some big expenses coming up around trying for kids. With inflation we're trying to budget a little tighter to ensure that our plans go smoothly.
- devmor 4y agoI get ~15% of my salary in vested stock as a bonus (on top of my cash bonus) and it's actually gone up almost 50% in value since Feb. My 401k has lost 25% of its value this year though, so it's hard to feel happy about the gain from my bonus.
- 6bb32646d83d 4y ago"Lost" about 70% of my TC (~1M to ~300k). High growth company with stock down 90% since the high end of 2021
- stonecharioteer 4y agoDamn. This happened to a few of my friends at Twilio. I almost joined them last year. I'm so glad I didn't
- volkk 4y agoasana?