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It looks like what happened is employees got a fixed number of RSUs. Their pay letter assigned a hypothetical value to those shares based on an incorrect stock

It looks like what happened is employees got a fixed number of RSUs. Their pay letter assigned a hypothetical value to those shares based on an incorrect stock price. So Amazon is probably not changing anything in the raise itself but rather correcting the hypothetical future value of the RSUs.

athenot 4y ago
But from the employee side, RSUs are usually communicated (and reasoned about) in dollar amount, with the undersanding that one is getting a number of shares corresponding to that amount. So even if it's an honest miscommunication, it's still a painful one.
- ineedasername 4y ago
  Then that is a misunderstanding by the employee about how their compensation works. It’s little different than owning stock. I could say “I own $5000 in Amazon stock” but I still know it actually means I own $X shares while the dollar value is variable.
  - alistairSH 4y ago
    It depends how the comp statement is written. "Salary: $180k. RSUs: $80k (100 shares)" VS "Salary: $180k. RSUs: $80k" With the former, I can easily spot check the share price and make sure it's correct. With the latter, I cannot, and take it at face value.
    - TimPC 4y ago
      They have to write the latter because at the time of the offer letter the share price on the conversion date is not known. If you get hired on September 1st and the first board meeting after is September 19th, your RSUs will get converted to shares on September 19th at the September 19th price. If your offer letter is written August 1st, there is no way to include the correct number of shares.
      - ineedasername 4y ago
        >at the time of the offer letter the share price on the conversion date is not known That's exactly why the notice should (and usually does) state both the RSU # and the present $ value while also indicating that it is the present value.
        Cederfjard 4y ago
        I think you’re assuming that it’s the value that’s variable, and not the units of stock. That already from the beginning the company has decided on how much stock to give in terms of units, not dollar value. But the point that’s being made (as I understand it) is that certain companies, including Amazon, first decide on a dollar value, notify the employee of that value, and then later grant the commensurate number of stock units based on the price at that later time.
  - KallDrexx 4y ago
    That's not a mis-communication by the employee. There are several events that happen with refreshers/bonus: 1) Notification period 2) Granting period 3) Vesting period When the notification period happens, the manager doesn't say "You are getting X units of stock". The compensation system actually at this point has zero idea how many units of stock you are getting. Instead you get told "you are getting $x worth of stock". Then there's the granting period, in which those unvested stock units are actually granted to you. This is important because there's a lag time between the notification period and the granting period. If your boss tells you you are getting $10k worth of stock and the stock price is $100 per share at the notification period, but is $105 per share at the granting period, you are granted 95-ish stock units instead of 100, because the number of stock units granted was based on the Dollar amount they communicated to you.
    - ineedasername 4y ago
      Perhaps the communication process varies a bit then. The only situations I've ever encountered or heard of come in the form of "X units". E.g., After starting you might be assigned 1000 RSUs that vest in two years. At the two year point when you receive them you're given the $ value and often (not always) the company will automatically withhold the portion necessary to cover the taxes that will come due that year. I've never heard of RSU grants that might vary with market price where the person did not know 1) That any $ amount quoted was based on the current market price of the stock; 2) The actual # of RSUs being granted; 3) That when they vested their value would be dependent on the stock value at that time. I know sometimes grants are made in the fashion of "10% of your base salary". But whenever the grant value might vary with market price I'd be very surprised if the actual # of RSU's was not information available to the employees. Even if the company dropped the ball in a compensation notice & didn't explicitly state the # of RSU's, that is still information that would almost definitely be included within the employee's compensation section in the company's HR portal.
      - KallDrexx 4y ago
        I guess it just varies by company then. For example, my company unlocked annual amounts on August 15th and I was told I was getting $56k worth of stock. The stock was granted into my account on August 31st. My stock at grant time was exactly Units * Price on August 31st = $56k. If I was granted stock when the annual amounts were announced (August 15th) the same number of stock would have been worth ~$62k
s1artibartfast 4y ago
Why would they get a fixed number of RSUs. I have always seen them assigned in dollar value, usually as a % of dollar salary
- travisjungroth 4y ago
  I’ve only seen them fixed. That part of your comp is variable, tied to the success of the company
- drstewart 4y ago
  I've never seen them assigned a dollar value (actually, in one case: SpaceX, which also had a 5 year vesting schedule instead of a standard 4 year). That would defeat the purpose of RSUs.
  - s1artibartfast 4y ago
    How would it defeat the purpose of RSUs? If you get 100k USD worth of RSUs on start date, and the stock value goes up 10X you still have a lot of skin in the game.
    - drstewart 4y ago
      Because you don't get RSUs on the start date, you get them as they vest over years. If the stock goes up 10x in 4 years, then your grant on year 4 is still 100k, not 10x that.
- ineedasername 4y ago
  In your compensation letter it may say a $ value but it’s just a formulaic presentation based on the fixed # of RSUs. You’re not compensated by “You’re getting $20,000 in however many RSUs that can buy at the time”. It’s “you’re getting 100 RSUs” and then whenever you get them your compensation letter states their current $ value.
  - s1artibartfast 4y ago
turtlebits 4y ago
I've never seen a $$ amount associated with RSUs on the offer letter, only the number of stock awarded. The recruiter may tentatively tell you how much they're currently worth to give you an estimated total comp.
- halfmatthalfcat 4y ago
  I had $x of RSUs offered at signing at FAANG-esque company. A month after joining you were allocated x RSUs at the given stock price at that moment for the offered $ amount.
  - dnissley 4y ago
    Yep, this is how it worked for me as well for my initial grant. However, my understanding is that yearly refreshers are often done as a set number of units.
__derek__ 4y ago
Apparently some people received additional cash now in lieu of RSUs because of the administrative delay involved with the latter (e.g., board approval). For them, the raise itself changed.

athenot 4y ago

But from the employee side, RSUs are usually communicated (and reasoned about) in dollar amount, with the undersanding that one is getting a number of shares corresponding to that amount. So even if it's an honest miscommunication, it's still a painful one.

ineedasername 4y ago
Then that is a misunderstanding by the employee about how their compensation works. It’s little different than owning stock. I could say “I own $5000 in Amazon stock” but I still know it actually means I own $X shares while the dollar value is variable.
- alistairSH 4y ago
  It depends how the comp statement is written. "Salary: $180k. RSUs: $80k (100 shares)" VS "Salary: $180k. RSUs: $80k" With the former, I can easily spot check the share price and make sure it's correct. With the latter, I cannot, and take it at face value.
  - TimPC 4y ago
    They have to write the latter because at the time of the offer letter the share price on the conversion date is not known. If you get hired on September 1st and the first board meeting after is September 19th, your RSUs will get converted to shares on September 19th at the September 19th price. If your offer letter is written August 1st, there is no way to include the correct number of shares.
    - ineedasername 4y ago
      >at the time of the offer letter the share price on the conversion date is not known That's exactly why the notice should (and usually does) state both the RSU # and the present $ value while also indicating that it is the present value.
      - Cederfjard 4y ago
        I think you’re assuming that it’s the value that’s variable, and not the units of stock. That already from the beginning the company has decided on how much stock to give in terms of units, not dollar value. But the point that’s being made (as I understand it) is that certain companies, including Amazon, first decide on a dollar value, notify the employee of that value, and then later grant the commensurate number of stock units based on the price at that later time.
- KallDrexx 4y ago
  That's not a mis-communication by the employee. There are several events that happen with refreshers/bonus: 1) Notification period 2) Granting period 3) Vesting period When the notification period happens, the manager doesn't say "You are getting X units of stock". The compensation system actually at this point has zero idea how many units of stock you are getting. Instead you get told "you are getting $x worth of stock". Then there's the granting period, in which those unvested stock units are actually granted to you. This is important because there's a lag time between the notification period and the granting period. If your boss tells you you are getting $10k worth of stock and the stock price is $100 per share at the notification period, but is $105 per share at the granting period, you are granted 95-ish stock units instead of 100, because the number of stock units granted was based on the Dollar amount they communicated to you.
  - ineedasername 4y ago
    Perhaps the communication process varies a bit then. The only situations I've ever encountered or heard of come in the form of "X units". E.g., After starting you might be assigned 1000 RSUs that vest in two years. At the two year point when you receive them you're given the $ value and often (not always) the company will automatically withhold the portion necessary to cover the taxes that will come due that year. I've never heard of RSU grants that might vary with market price where the person did not know 1) That any $ amount quoted was based on the current market price of the stock; 2) The actual # of RSUs being granted; 3) That when they vested their value would be dependent on the stock value at that time. I know sometimes grants are made in the fashion of "10% of your base salary". But whenever the grant value might vary with market price I'd be very surprised if the actual # of RSU's was not information available to the employees. Even if the company dropped the ball in a compensation notice & didn't explicitly state the # of RSU's, that is still information that would almost definitely be included within the employee's compensation section in the company's HR portal.
    - KallDrexx 4y ago
      I guess it just varies by company then. For example, my company unlocked annual amounts on August 15th and I was told I was getting $56k worth of stock. The stock was granted into my account on August 31st. My stock at grant time was exactly Units * Price on August 31st = $56k. If I was granted stock when the annual amounts were announced (August 15th) the same number of stock would have been worth ~$62k

s1artibartfast 4y ago

Why would they get a fixed number of RSUs. I have always seen them assigned in dollar value, usually as a % of dollar salary

travisjungroth 4y ago
I’ve only seen them fixed. That part of your comp is variable, tied to the success of the company
drstewart 4y ago
I've never seen them assigned a dollar value (actually, in one case: SpaceX, which also had a 5 year vesting schedule instead of a standard 4 year). That would defeat the purpose of RSUs.
- s1artibartfast 4y ago
  How would it defeat the purpose of RSUs? If you get 100k USD worth of RSUs on start date, and the stock value goes up 10X you still have a lot of skin in the game.
  - drstewart 4y ago
    Because you don't get RSUs on the start date, you get them as they vest over years. If the stock goes up 10x in 4 years, then your grant on year 4 is still 100k, not 10x that.
ineedasername 4y ago
In your compensation letter it may say a $ value but it’s just a formulaic presentation based on the fixed # of RSUs. You’re not compensated by “You’re getting $20,000 in however many RSUs that can buy at the time”. It’s “you’re getting 100 RSUs” and then whenever you get them your compensation letter states their current $ value.
- s1artibartfast 4y ago

turtlebits 4y ago

I've never seen a $$ amount associated with RSUs on the offer letter, only the number of stock awarded. The recruiter may tentatively tell you how much they're currently worth to give you an estimated total comp.

halfmatthalfcat 4y ago
I had $x of RSUs offered at signing at FAANG-esque company. A month after joining you were allocated x RSUs at the given stock price at that moment for the offered $ amount.
- dnissley 4y ago
  Yep, this is how it worked for me as well for my initial grant. However, my understanding is that yearly refreshers are often done as a set number of units.

__derek__ 4y ago

Apparently some people received additional cash now in lieu of RSUs because of the administrative delay involved with the latter (e.g., board approval). For them, the raise itself changed.