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The company was not giving raises when the stock was going up with the rationale that there is a compensation target that was exceeded. Now that the compensati

The company was not giving raises when the stock was going up with the rationale that there is a compensation target that was exceeded. Now that the compensation is way below the target the company is silent. So 0 risk for the company, all the risk goes to the employees. And btw the stock that AMZN was giving to the employees was coming out of thin air. Not from buybacks. So they were compensating people with dilution ?

loeg 4y ago
> And btw the stock that AMZN was giving to the employees was coming out of thin air. Not from buybacks. So they were compensating people with dilution ? All employee compensation is (minuscule) dilution. Don't worry about it too much.
- aeyes 4y ago
  > All employee compensation is (minuscule) dilution. Miniscule? Is this a joke? Last year their stock based compensation was almost $20B. As a shareholder I wouldn't be amused about this.
  - mabbo 4y ago
    Why? The alternative is to pay those people with cash, which costs the company money. That would lower the value of the stock because profits would become losses. It works out to be the exact same thing, except that Amazon doesn't record a loss on its finances.
  - loeg 4y ago
    $20B is nothing compared to the value you would destroy by not paying your employees. Stock compensation and cash compensation are equally dilutive for shareholders.
willio58 4y ago
I don’t think that’s how this works. Amazon doesn’t print money when they give employees stock. They give x% of the company as stock (where x is a really really small number). They might give less or more depending on a number of factors, but buybacks are unrelated to that.
rmk 4y ago
Companies set aside stock for option pools, can issue more stock, etc. It's like the treasury/fed rolled into one, that governs company stock. For instance, the typical SV company will put 20% of the company towards employee option pools. SV is unique in setting aside a larger portion of the company towards employee ownership; companies in other sectors of the economy do not do this. But I agree with your statement about companies putting the risk burden on employees and not much on themselves.
thunky 4y ago
> So 0 risk for the company, all the risk goes to the employees The employees made bank from the deal. And the company could have made a different deal from the start and kept it rather than offering that compensation package. If the stock compensation was meant to be a guaranteed salary then it would have been offered that way. If the company is now having a hard time hiring they can sweeten the deal. And of course the employees can go elsewhere anytime they like to get a better deal.

loeg 4y ago

> And btw the stock that AMZN was giving to the employees was coming out of thin air. Not from buybacks. So they were compensating people with dilution ? All employee compensation is (minuscule) dilution. Don't worry about it too much.

aeyes 4y ago
> All employee compensation is (minuscule) dilution. Miniscule? Is this a joke? Last year their stock based compensation was almost $20B. As a shareholder I wouldn't be amused about this.
- mabbo 4y ago
  Why? The alternative is to pay those people with cash, which costs the company money. That would lower the value of the stock because profits would become losses. It works out to be the exact same thing, except that Amazon doesn't record a loss on its finances.
- loeg 4y ago
  $20B is nothing compared to the value you would destroy by not paying your employees. Stock compensation and cash compensation are equally dilutive for shareholders.

willio58 4y ago

I don’t think that’s how this works. Amazon doesn’t print money when they give employees stock. They give x% of the company as stock (where x is a really really small number). They might give less or more depending on a number of factors, but buybacks are unrelated to that.

rmk 4y ago

Companies set aside stock for option pools, can issue more stock, etc. It's like the treasury/fed rolled into one, that governs company stock. For instance, the typical SV company will put 20% of the company towards employee option pools. SV is unique in setting aside a larger portion of the company towards employee ownership; companies in other sectors of the economy do not do this. But I agree with your statement about companies putting the risk burden on employees and not much on themselves.

thunky 4y ago

> So 0 risk for the company, all the risk goes to the employees The employees made bank from the deal. And the company could have made a different deal from the start and kept it rather than offering that compensation package. If the stock compensation was meant to be a guaranteed salary then it would have been offered that way. If the company is now having a hard time hiring they can sweeten the deal. And of course the employees can go elsewhere anytime they like to get a better deal.