I've been reading through blind, and Amazon posts often have a TCT. I specifically asked HR what the target compensation was for my offer, and if the TCT I calculated on my own was correct. The response I got back was that there was no such thing as TCT, and that the company isn't trying to conform compensation to a specific number over 4 years. This seems strange. There must be a grant price, or they couldn't calculate a year 1 or year 2 compensation. It also doesn't align with what I've read about the potential of being given additional stock if it under performs.
Can anyone confirm if a Amazon has a specific annual TCT for each employee?
Also, does anyone know the official Amazon TCT formula?
The two that I've come up with on my own are :
Assume No Growth:
(Base(4) + Yr1 bonus + Yr2 Bonus + RSU(grant_price) )/4
Assuming 15% YoY Growth (what I've read that amazon does):
( Base(4) + Yr1 bonus + Yr2 Bonus + RSU(grant_price)( .05 + 1.15(.15) + 1.32225(.40) + 1.520875(.40) ) )/4
grant_price = (given_yr1_estimated_comp - Base - Yr1 Bonus) / ( RSU(.05) )
The second formula yields the year 2 number I was given over the phone, and confirms the grant price.
These result in significantly different TCTs. If we aren't all aligned with how we're calculating compensation, the offer evaluation threads may be slightly less useful than we all imagined.
So you don't have to ask:
Using formula 1 my TCT would be ~321k
Using formula 2 my TCT would be ~358k
Anyway, the easiest way to calculate your TCT is to find out your OLR bucket and the bands for your level and role. The 15% formula that people use is intended to reverse engineer your rating from your annual comp adjustment and/or newly granted RSUs. Odds are that you will targeted be at the bottom of the band for your first several years, so your TCT will always be below your actual projected compensation (meaning you will get a very small base adjustment and no additional RSUs). For many people who joined between 2014-2016, Amazon's TCT policy meant that most of them got no additional shares regardless of performance (even top tier) because their projected comp was always in excess of the TOP of the band, let alone whatever their actual target was.
In general, you're either targeted to the top of the band (top tier), to the bottom (most of the rest), or to 0 (least effective and likely heading for termination). For L6 SDE, the band is $252k (70% of employees) to $378k (20%, or TT).