Why stock appreciation is counted in TC at Amazon?
If I am getting paid $250K or say my TC is $250K, I sell my current company stocks and buy 100K worth of Amazon stocks that year. Then when the prices rise, I don't count it as TC or should I š¤ Why so many people count stock appreciation as part of TC! Anyone can buy stock and get those gains. Thoughts? Also genuinely curious if I am not understanding something in this calculation.
Simple, amazon doesnāt want to pay us
Don't count stock appreciation as part of TC. Always use the value at grant time. Otherwise not comparable
Yeah exactly that was my thought. But saw some posts where people posted my TC is 300K at L5 because of stock appreciation so I was curious like why is appreciation counted in TCs
Thatās bad math.
TC should always be what is your next 1 year TC. If stock has appreciated and you have the initial grant units still, then next year will take into account the stock appreciation. How else can you compare the TC of the company you are working at, and offers you have
It should only cover the part of the grant that vests, not the part that vested last year and you held on to.
Yew that's right
There are two ways to look at this: For offer comparison, non-appreciated values (grant values) are the right thing. For steady state, W-2 comparison does make some sense (easiest to compare).
Why does Amazon count it as TC? Because then they don't have to pay us as much Why should employees count it as TC? Because it shows up on your W2
At a normal company obviously but amzn penalizes for stock appreciation
Stock growth should be counted as part of ācurrentā TC. Amazon has relied on stock growth to keep people while other companies used refreshers (and stock growth). Those are all part of current TC. What matters the most is the TC you can get by jumping right now, but thatās usually portrayed in the form of offers. And so itās useful to compare those to the current TC to determine the best move. The most valuable numbers for dick measuring is indeed the highest offer one can get in the external market with their current skills but not everyone is willing to interview beyond a certain TC higher than the current TC so we go with current TC.
The thing thatās messed up at Amazon is the āOh, your current grants have appreciated enough, you donāt need a refresh grantā tactic that they use. Most other employers will keep refreshing you no matter what. Over time that delta becomes significant.
Weāre all ready to leave when they start to not fix the stocks. For now, my grants have kept up with market.
It's simple. TC is based on what the stock is today. So take the total shares vesting in the current year multiply by current stock price. That's your RSU value. Doesn't matter if you sold or not.
What if your company stock went down by the time you buy? So you end up getting only 10k instead of 100k?
If your company is blue chip chances of 90% fall are minimal. Also, lot of companies provide stock of value so even if it goes down you get more number of units or those falls are compensated in refreshers
Look at those companies stock appreciation and that of Amzn for the last few years. Only few can beat that. But again thatās from past performance.