With this said, from reading the article, this move seems reminiscent of Netflix's pay structure, in the sense of offering a higher cash portion but lower equity. Some people here already mentioned that this was already sort of the case with a sign on bonus compensating for the backloaded vesting structure. From my experience interacting w/ professionals outside the FANG bubble, equity tends to be a bit confusing, so I wonder if a move towards bigger cash portions is a way to try to lure people who wouldn't otherwise be looking at big tech as a prospective career choice.
What's also curious to me is that bumping up cash comp is in direct opposition to the trends from some other tech giants, where they are frontloading equity vesting. My sample size might just be small, but it feels like cash comp seems to correlate somewhat with bearish stock feeling and that frontloaded equity tends to correlate w/ bullish stock feeling. Would love to hear whether I'm off the mark here or not.
1. They give cash that is generally 20% higher than average market price.
2. If you convert your cash into options, you don't pay the income tax for the forfeited cash. It's your choice on how much cash you'd like to convert. And of course, if you joined company by 2015 or so, and consistently converts, say 40% (or whatever percentage other FAANG companies use) of your cash, you should be have enough money to to retire and focus on angel investing.
3. They give you a discount of the options. It used to be 5X. That is, if you forfeit $1 of income and the strike price of options is $1, you get to have 5 options instead of 1. That is, if the stock price increases by 25% compared to the strike price, you'll make even, roughly speaking.
4. They options expire in 10 years! I mean, 10 years!
5. Options vest every month. The strike price is the the price of stock of that month (not sure if it's average of the month or at the time of vest). Combining this and #4, employees will make money as long as Netflix stock has volatility. The only scenarios that employees will lose money is that the stock price keeps going down for 10 years or there is not enough volatility.
6. They don't give bonus. If you perform really well, you will become more important to the company, and you get a hefty raise. The raise stays.
If this is not fair, I don't know what is.
I personally view this as a strength of Netflix. They have such a wonderful culture that empowers its engineers to focus on building and being autonomous. They don't need people to drive company wide initiatives most of the time.
It was on the day of vesting (1st business day of the month) at the close that day. So we used to root for a huge single day drop on the first trading day of the month (mostly jokingly).
Does this example need another prerequisite "and the current price of NFLX is $1"? Because if the example runs with NFLX at, say $10, then each option already have an intrinsic value of $9.
And combined with #5, those options look like at-the-money call options that expire in 10 years. But in this case it won't make any sense to set the option price (the amount of income to forfeit for each option) according to either strike price or stock price -- shouldn't it be set according to the difference between the two?
It would probably be a lot cheaper to change their hiring practices to be less strict and reinvest some of that money in training.
Isn’t that what a boomerang promotion is?
I had a few friends who went 100% stock (which meant that they technically qualified for food stamps and medicare since it was pretax dollars) and some went 70%.
A company so large as to literally run out of humans.
Happened with their warehouse workers too.
https://www.essence.com/news/amazon-burning-through-workers/
It's not the size, its the attrition that's the problem. Everything would be fine if they retained employees, but stackranks for the stackrank god.
I won't read it that way. This is upper threshold, not some number a L5 SDE would hope to get.
Frugality is still frugality.
If they had too many candidates and not enough positions, it makes sense, but in the opposite scenario you just lose our on candidates that hate those tests.
As a recently posted article here said[0]: "My hunch with those companies was that it wouldn't have been a major issue if I was video-ing in from the State Penitentiary (due to murder charges) as long as I solved the algorithms correctly"
IMO it is an attempt at employee retention as well as attracting new talent.
Purely anecdotal on my part, but I've seen post after post on LinkedIn of senior/tenured Amazonians moving on to other roles after five, ten, and even fifteen years. The stock performance has been pretty flat for the last few years, so the TC growth is lagging behind the gains you could get from being a new hire.
Also a base salary cap of $160,000 is really low. Not everyone joining Amazon wants a large portion of potential comp to fluctuate with the whims of the market. This increases the choices for TC configuration. If you wanna have lots of base and a minimal RSU grant, you now have the option.
When I went through the process, it was pretty confusing to understand but the gist is that they try to hit a total compensation of whatever your target is. And when they quote the total compensation of your salary 3 or 4 years in, they assume that the stock has appreciated by 15% per year. So 15% of your potential gains (compounding per year) of getting RSUs and exposure to Amazon stock is removed.
Maybe, just maybe they can try and get rid of their crazy PIP policies to try and retain talent .
Netflix gives you 100% of your total comp in whatever form you choose: all cash, all stock, or any combination in between. Also, Netflix's stock plan vests immediately-- they don't try to lock you in with 4-year vesting. They view stock compensation as something you've earned, so there are no strings attached.
It's well known that for top roles, Amazon's pay ranges are often well below their peer companies. You can see this on https://levels.fyi. So it makes sense that Amazon is trying to catch up.
So rather than address the problems that are giving rise to this extremely poor reputation and commensurate attrition rates -- the only "fix" that Amazon can think of is to offer people more cash so that the net experience becomes somewhat more palatable.
At the end of the day, it's a job. And jobs that pay the most usually recruits the best.
If they're looking at $350k base salary plus incentives, I may give them another look, especially if I can still do WFH.
Amazon have launched more successful non-core businesses than any other big tech company. I suspect there's a belief throughout the company that qualities of the culture that lead to high attrition rates are the same qualities that breed revenue growth and success. In turn, that explains the reluctance to address those issues.
OTOH, the backloaded vesting system works. It was easy to hire people out of their first year at Amazon, but almost impossible to hire someone after a few years when the bulk of their vesting was right around the corner. I talked to a lot of people who admitted being miserable but felt they couldn’t leave until they got the equity that they had been toiling over for the past few years.
Weird situation all around. We eventually reduced our recruiting out of that particular Amazon office because so many of the people coming out of it were deeply disgruntled with the tech industry in general. Really changed my view of Amazon.
For instance I received an offer that was 160 base, 325 cash bonus and 5% of my RSUs for my first year, putting my TC at ~510k. Second year was a slightly smaller bonus, and 15% of my RSUs.
Is it possible that when folks were voluntarily disclosing comp they were just including base comp and not total comp?
Jeebus man. What is it that you FAANG developers do that is so much more complex than what regular developers do?
For reference: I do Angular and Python development. Is there like some open source project or code samples that give an idea of the complexity of code that 510k developers are writing?
Man you got me day dreaming about that kind of money: I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities.
Another thing to keep in mind is that Amazon values their stock grants as if it grows 15% every year. Obviously this is pretty optimistic and makes their offers not directly comparable to other companies that value their stock using current prices.
I don't understand the appeal of cash signing bonuses. This just seems to me like another way of saying you got hired for a $485k annual salary while giving Amazon the freedom to cut your salary a year from now by up to ~67%. Why give your future self that risk instead of looking for a higher base salary that is stickier over the long term?
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..."
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.
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.
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.
> While the stock vests in year 3 and 4, you get an equivalent amount of cash in year 1 and 2. It’s not uncommon for that cash to be 6 figures, almost doubling your salary for the first two years. I wouldn’t call that a pittance.
This was my experience ~8 years ago. There was an initial signing bonus, a retention bonus after a year, and then the RSUs start kicking in. The bonuses were prorated monthly. It was a little different than what other companies do, but it didn't feel unfair.
Get people feeling that they can't leave because of sunk cost and it's all going to be worth it soon, even though they're actively miserable.
A lot of FAANG down level you while hiring, that way they ensure you are basically at the same level even after a promotion(the next 4 - 5) years. Mandatory firing quotas, brutal performance standards(stack ranking included) and delayed vesting schedules effectively mean most won't make it to the big paydays.
OTOH, those who are there for a few years, have survived through years of political darwinism inside the company have to an extent figured out the 'secret sauce', and are gradually climbing their way up.
In these set ups, attrition is a feature for the long term employees, people who leave basically free up spaces in the ladder for others to take. No matter where you go you write software, so it doesn't really make much difference where you work at. On the other hand positions in the hierarchy no matter what the company are effectively pay grades and one must actively work on grabbing promotions.
If you observe carefully job hoppers don't really make much in life. Quitting saps energy due to context switching, by the time you arrive at a good pay day you have already hopped to the next company. For the people who quit often, good days are always in the future. And real cheddar lies in grabbing assets and looking after your health as you age. Both demand relative stability to raise debt and spend time working on your body.
That being the case the real winners are people who are doing long terms at companies, investing time learning political, investment and fitness skills.
Delayed vesting is a terrible practice. Perhaps we'll see more companies offer immediate vesting of equity comp as a way to compete for talent. This is what Netflix does.
And there are a lot of us who don't even get into FAANG and can't even dream of $160k, let alone $360k.
[0]: https://en.wikipedia.org/wiki/Big_Tech#FANG,_FAANG,_and_MAMA...
At the same time, Amazon has had to pay very high for new hires. Hiring managers used to need to get L10 approval to go out of bands on offers outside bands, but starting late 2021, they could go out of bands up to ~20% higher with no approvals.
To top all of this, Amazon has a 6% internal URA (non-regretted attrition) target: something that has been in place for close to a decade. The Amazon Music group revolted late 2021 as reported by the Big Technology publication in-depth [1] as they didn't have 6% of people to fire, at the very time when they could not hire. Yet they were forced to hit this URA target, just like all other orgs in Amazon. Apparently this “rebellion email” leaked across the company and is sparking Amazon-wide outrage, and adds fuel to the fire.
Amazon has been extremely frugal for the skillset they hire for, very demanding and have created a stressful workplace. They still force 6% of engineers to be fired, even when their own leadership opposes this (Amazon Music).
I wonder why they can’t hire. Also, why is Amazon still part of the FANG abbreviation when they have this culture across many of their organisations?
[1] https://bigtechnology.substack.com/?utm_source=substack&utm_...
This one is interesting to me, as my anecdata is the opposite. People tell me not to go to Amazon, but if I do choose to go, refuse any job with AWS on the basis that they refuse to staff it properly.
So that's where all the Microsoft stack-ranking hawks went!
https://bigtechnology.substack.com/p/standing-up-for-us-pleb...
Nut sure where you're getting this from, but IMO this is not true at all.
More 'hardcore engineering' is going on, on average, over Amazon Retail/CDO. But I would not say _at all_ that AWS is a better place to work.
From the datapoints I've gathered, it's the opposite. Oncall for an AWS product generally sucks balls, and the re:invent death march is a real thing.
But this is just like, my opinion, man.
Because the term had nothing to do with work culture. The term was coined by Jim Cramer, the television host of CNBC's Mad Money, in 2013, who praised these companies for being “totally dominant in their markets”. The original definition still holds true.
> The move promises to bring Amazon’s base pay more in line with other big tech companies, including Google, Facebook, Apple and Microsoft.
As a ~62/63 (almost senior or senior) at Microsoft my peers at Facebook, Google, and Amazon can easily make literally twice as much compensation a year in salary, stock, and cash bonuses.
Microsoft isn't even in the ballpark. If I didn't absolutely love my job there would be zero reason to stay at Microsoft.
Whereas the more "fun" companies like Google/Facebook/Amazon will chew you up and spit you out, and you just have to make as much money as possible in your 20s/early 30s before you burn out.
This could be a slightly unfair stereotyping of these companies, but from the people I've spoken to it rings true.
That obviously wasn't true in the 90s (see the famous Microserfs book), but might be true today, so I would argue against the "always" for those of us around then.
You're still working on pretty complex codebases and tough technical problems though, so while you usually do not need to pull extra hours outside of business, you really do need to concentrate intently while working.
But my org got disbanded, and I got rolled into Mobile (circa 2008/2009 when Ballmer was using the economic conditions as an excuse to shutdown orgs). I was there building the first Windows phone. I hated that org. It was all schedule chicken and politics (you could have an iPhone, but you couldn't use it during meetings in front of GM or higher). I had code reviews rejected for "You aren't going to need that". I'd point them at what was coming in the next cycle and got lectured about "you should be focused on your current tasks not future tasks" in writing. But in person (i.e. no written record), I was told to write the code how the reviewer wanted (a 64 or 65 as I recall) and just keep the changes stashed for when the real work showed up. I hated working that way. So I got blackballed for a shitty attitude (and rightfully so. My attitude was shit).
With that said, I'm still friends with some people at Microsoft. And they love it. Just gotta find the right org (just like Amazon, Google, etc.)
Source: Done both AWS L8 and MSFT Partner roles. Have hired and led teams with Principal+ in both places.
Seems like Amazon was blown through most of the labor supply and now can't find workers, not because they don't exist but because they don't want to work for Amazon. Doubt more money is going to fix this though perhaps pushing for more visas will let them get some workers who haven't been burnt by Amazon yet. Amazon simply has a bad culture which must be fixed. Even then, it'll take time to repair their reputation.
I got approached by an Amazon recruiter, and instead of just ignoring him, I decided to see "what's out there". I'm a staff SWE level at a decent company, so not exactly desperate to leave.
He proposed a hard time for a phone call later that week. I replied saying that I have conflicts at that time, how about we do it next week? Didn't hear back from him for a couple of days, and then he replied saying he's too busy next week. OK then, can you let me know when you're free?
Never heard from him again.
Sounded very unprofessional to me.
This happened to me. I got the exact same recruiting email from the exact same recruiter a week after I had already responded by declining.
Wlb is amazing. Did 5-6 hour days on last team. Coworkers were chill. Now I work more (6-7 hour days) cause I'm on a systems team, but I get to learn a lot about how EC2 servers are run. My manager cares about my learning and I get basically an hour a week with the tech lead where I can ask them questions.
Have been able to meet a couple principal engineers and they've even reviewed some of my work.
I have nothing bad to shared about my experience so far.
Did I mention I don't have deadlines?
The big issue is the developers Amazon wants to hire are not the same as the developers who want to work there, so Amazon is basically paying a huge premium to attract people. That said let's not kid ourselves, the majority of people at Amazon are happy to be there, get paid very well, and are reasonably competent.
I have probably about a dozen emails from AWS even though I've been doing mobile apps for the past >10 years and that's readily evident if you even bothered looking at my CV.
I can't think of another major company whose recruiters spend so little effort pitching a relevant role to the candidate. At this point I don't even open the emails any more - which seems like it's long-term detrimental to their recruitment efforts overall.
There's certainly some amount of money that would get me to work for them in the short term. But only if there wasn't a clawback clause that made me lose money if I found the experience unhealthy.
There's probably some engineer out there who's always wanted to live in Ireland. That said, I imagine if you're in the "hire to fire" bucket it would suck extra to be in anouther country with no job.
- Joined early early 2017 as an L5 hire (no previous FANG experience, but 10+ elsewhere) with an an offer of base $145K, sign on of $50K year 1, $38K year 2, 150 RSUs (AMZN worth ~$850 = 127500). Vesting schedule: 5% @ 1y, 15% @ 2y, 20% @ 2.5y, 20% @ 3y, 20% @ 3.5y, 20% @ 4y.
- Negotiated without competing offers a bump to $150K base, $60K / $45K cash, 162 RSUs.
- A breakdown based on Amazon's 15% stock aprecciation YOY gives you Amazon's Total Compensation Target. This is Amazon's projection assuming that you perform at the middle of the expectation of your cohort in the yearly performance review (OLR, not forte as the article states)
- year 1 (8 RSUs): $150K base + $60K cash + 8 * $850 * 1.15 = $218K
- year 2 (24 RSUs): $150K base + $46K cash + 24 * $850 * 1.15^2 = $223K
- year 3 (32 + 33 RSUs): $150K base + (32 * $850 * 1.15^2.5) + (33 * $850 * 1.15^3) = $231K
- year 4 (32 + 33 RSUs): $150K base + (32 * $850 * 1.15^3.5) + (33 * $850 * 1.15^4) = $243K
- year 1 (AMZN @ $1430) = $221K. OLR bumped base salary for next year to $157K
- year 2 (AMZN @ $1844) = $247K. OLR bumped base salary for next year to $160K. No stock grant as projected salary > comp target
- year 3 (AMZN @ $1767, $2307) = $292K. Granted 18 RSUs to vest at year 4.5 and year 5
- year 4 (AMZN @ $3338, $3379) = $378K
- year 5 (AMZN @ $3409, $3400?) = $221K
- due to manager / life reasons, didn't progress beyond L5. If I were to pursue this this year, my comp adjustment would have come about a year after starting at that level (but only to the lower end of the L6 band ~ $250K). $30K for a tonne more work seems rather stupid.
- note the golden handcuffs as well as that huge cliff
- some of the above is intentionally inaccurate (but not by a huge amount)Before last year they were seriously lagging behind in terms of comp. Even in EMEA I hear they couldn't hire due to low comp compared to other companies. Even non-FAANG were beating them easily.
What I hear from friends at Amazon (joined prior to 2020) is that their comp is well below market rates.
They probably were testing new paybands to see what stuck.
The bleeding has to be pretty bad for them to make an announcement like this though, otherwise they'd quietly bump up pay/bonuses for their top performers.
I got better offers from Bloomberg, Reddit, Stripe, and Facebook. Amazon also backloads the equity. You get barely anything if you leave after 2 years.
After finally deciding to switch jobs I got twice the salary of previous employer when I hoped Ill get 20-30%.
Market is not catching up to goverments pomping out new taxes and inflation.
> Brin and Page filled the garage with desks made of old pine doors set on sawhorses, a turquoise shag carpet, and a Ping-Pong table.
https://www.vanityfair.com/style/2014/04/sergey-brin-amanda-...
I feel like the OP was being a little too drastic, there are many reasons to dislike Amazon but one being that Bezos used a door as a table is a little out there.
https://www.growthink.com/content/story-jeff-bezos-250000-in...
Either way the door desk is an interesting piece of tech history.
The problem is that what makes that sacrifice potentially worth it at an early-stage startup is the potential for equity before hypergrowth. Amazon has virtually no chance of startup-like hypergrowth anymore; recently its stock has even started declining. So employees are being asked to provide outsized sacrifice for declining returns. Predictably, massive resignation and retention problems are the result.
BTW, a frugal startup is better any day than a startup that blows up all its cash on unimportant activities and subsequently closes shop.
I think it's well-known that Amazon doesn't provide in-house meals and haircuts and kombucha like many of the SV companies. Personally it's something I appreciate because it makes the area around the office a bit more lively with more foot traffic and private businesses catering to the office workers.
I love Amazon as a customer though
At least when I worked there in Seattle, I got 48 hours of personal time, a few days of sick time, and a month of PTO every year.
Granted, my managers never cared about what I used (personal==sick==pto, use whatever) and I rarely actually recorded vacation.
There's lots of leeway for your manager not to enforce it though.
Never thought it was an allegory for Amazon, though. Unless you mean something else?
I think "The Rainforest Bookstore" would've been cuter and clearer
I'm guessing the San Jose, pay scale for the same job was probably 3x+, the HR person who gave me the offer letter actually apologized and suggested I negotiate for more.. Which I found pretty funny, but they wouldn't budge on the PTO vesting schedule, and I'm at an age where I refuse to be in a situation where I have two weeks of PTO, which isn't even enough to take the kids on a couple trips a year during spring break, summer break, etc.
Plus, for a company with 10's of billions a year in profits, I've never seen so many red flags... From the HR department to the inexperienced parts of the team I met with (and the experienced guys who where apparently "lifers" and unaware of the outside world if you will).
It surprises me that a company will pay someone $$$$ and work them like dogs rather than paying $$$$-10% and hiring another 1/10th of a person so they don't have to work 50+ hours a week with 2 weeks vacation.
It just feels ridiculous that US salary can be 10x this, when costs of living are very similar. Apartments in my city in Sweden is about 200k$, houses 500k$.
After working here for just six years I could move back home and buy a house outright with the money I've been able to save.
I don't need a big house or a big car, but making more money means I can coastfire in the next five years, so it's absolutely worth it to me.
Discussion here is often about a bump to the right of the graph :)
1. very difficult long interview that I most likely won't pass 2. I only want to work remotely. driving every day few hours back and forth is very expensive in many ways.
When something changes about those I will think about it.
Beyond entry level, most of the compensation at Amazon and other FAANGs is in the form of stock awards (RSUs). So a senior engineer might have a $160k annual salary and $300k worth of RSUs vesting that year, making for $460k total compensation.
In an environment of rising stock prices, this is a cost-effective way for a large company to pay high salaries because the stock that's worth $300k today was only worth, say, $150k when it was originally granted, and that's the price that Amazon effectively paid in its earnings deductions at that time.
Understandably, skilled vs unskilled labor, and supply and demand, and all that, but as Jon Stewart recently recounted telling Jeff Bezos at a dinner party, “sounds like a recipe for a revolution.”
but an engineer can produce a system which generates millions of revenue a day. a warehouse worker, cannot scale this way.
To give people here an idea, my RSUs lost ~4% in value since I've been at Amazon (more than a year). This is perfectly fine if there's an expectation that the RSUs are a "bonus", it's not fine if you need it to go up 10-15% for your TC to match Microsoft.
Why do US engineers command such higher salaries?
I imagine Brazil doesn't have enough of a talent pool to draw from.
So while this might indeed result in pay bumps, I highly doubt the bumps will be very large. This is also a "simplify how we do offers" thing.
[0] https://www.foley.com/en/insights/publications/2020/08/restr...
[1] https://www.mayerbrown.com/en/perspectives-events/blogs/2020...
You can call raising pay a bribe, but isn't that what work is? I mean shit, I wouldn't do my job if I didn't get paid for it. I have way more interesting hobbies than that... In that sense, is everything a bribe? I feel like those words don't really mean anything.
The increase isn't "we're paying all of our devs 350k tomorrow", it's "we can raise your salary up to 350, whereas before it was limited to 160"
Your take home will easily exceed $1m which will help you gain a nice bump if you choose to move elsewhere in 18 months or so.
Does ANYONE in amazon see culture changes occurring at all? I'm willing to respond to the 5 recruiters contacting me BUT only if there is a huge drive to change culture as well.
I see comments about the culture a lot and I feel the need to chime in and say that it's not actually bad? At least in my team, the work life balance is fine, my manager is great and the projects are interesting.
Not saying that it's the same for every SDE, but some of the stories you read online make it seem like they shackle you to your desk and PIP you into submission.
to answer the original question, nope, I have not seen any evidence of culture change, source: a close friend joined & left in a year.
Doesn't really make much difference, unless you were hiring finance bros. The total comp is what mattered.
Assuming you're going to stay at Amazon for a long time, yes, total comp is what matters. If not then base pay matters because you don't get to keep most of the stock if you leave after a year or two. Amazon's vesting schedule is pretty bad. Just 5% at the end of year 1!
They announced the numbers, before perf season even started.
Everyone is going to be asking can I get ~350k? Base salary before was half that...
Amazon's compensation has historically been very RSU-heavy (aka, you are partly paid in stock), especially at higher levels.
It's literally the first sentence of the article
"Amazon will boost its maximum base pay to $350,000 for corporate and tech employees, from $160,000 previously, as part of an overall increase in total compensation intended to help recruit top talent and retain existing employees."