Amazon salaries drop 15%-50% below projected pay targets
https://www.wsj.com/articles/amazon-corporate-workers-face-pay-reduction-after-shares-slip-f896e314 "The steep decline in Amazon Inc.’s stock over the past year is roiling the technology company’s stock-heavy compensation plan, resulting in employee pay coming in significantly lower than target compensation, according to people familiar with the matter. Amazon pays its corporate employees a large chunk of their annual salaries in restricted stock units, and a prolonged slump in the company’s shares is causing pay for 2023 to be between 15% and 50% lower than the projected targets Amazon gave to employees, some of the people said. “Our compensation model is intended to encourage employees to think like owners, which is why it connects total compensation to the company’s long-term performance,” an Amazon spokesman said in an emailed statement. “That model comes with some year-to-year upside and risk because the stock price can fluctuate, but historically at Amazon, it’s had a history of working out very well for people who’ve taken a long-term view.” ... When Amazon issues restricted stock units to employees, it is predicated on the longstanding assumption shared in compensation conversations that Amazon’s shares would appreciate at least 15% each year, the people said. ... Because of the decline, Amazon’s human-resources team recently sent training documents to managers about how to communicate what effectively amounts to a pay cut to its employees, according to training materials reviewed by The Wall Street Journal. According to the materials, managers should focus on employees being invested in the long-term performance of the company and hold on to the restricted stock longer until there is a recovery in the company’s stock price."
The Wall Street Journal
For the uninitiated, stock comp at Amazon is back loaded and assumes stock grows indefinitely at 15% every year. That means, at year 4 if the stocks haven't grown that much, you're not getting the sweet TC
Yeah I think it's mentioned deep in the article but that's the main point. It's quite possible folks who joined Amazon in the past 3-5 years saw a whopping high TC in first 2 years due to the cash component top-up, and their TC drop significantly in years 3-4 recently due to the stock pricing and not being aware of how Amazon calculates the 15% YoY gain.
Ultimately you have to go into Amazon with the idea that you can get the learning you need in the first 2 years, and if it works to stay after that, bonus.
Hahahahahahaha! Its big fucked up, its funny 🤣🤣🤣🤣
Yep, we must be owners, except when we are talking about policies, layoffs, where we work, access to corporate data like so called drop in innovation from WFO...
If comp is dropping up to 50% shouldn’t that make up for the overhire issue? Isn’t that ownership enough without the layoffs too?
U wish
That doesn’t generate headlines and affect share prices though
Doesn't reduce the cost to Amazon though, they still have to pay out the same amount of the "share of the company" as stock compensation to employees. Just that employees are making less money when they sell the vested stocks.
This does impact new grants. The effect will not be felt widely until 2025.
Not just new grads, it impacts all employees. I'm just saying it wouldn't help in reducing the layoff numbers. If the management has planned to layoff X number of employees, stock price dropping by 50% will not make any change in X.
The new system recommended total comp targets are lower 10-25% lower than last year. In the next couple of years, employee will still make higher than that due to combination of joining bonus for new employees and already awarded stocks for old ones. The hit will likely be after that (FY 25 and beyond, assuming moderate 10% stock growth).
Combine this “long term” BS spewed by Amazon with the average tenure being ~18 months, and what you get is fleecing of the employees. 😜
Not really, because the 2 years are cash heavy anyways. Short tenure is a function of comp structure. For a lot of people total comp goes down beyond that period (unless 15% YoY stock appreciation). That’s when people leave.
The point is that half of the employees are not invested in company’s growth and the reward(?) that comes with it.
Pay cut and back to the office? thats cute
Don’t forget to pickup tasks unfinished by your colleagues affected by layoffs!
No point in waiting for rsu, get your sign on bonus then GTFO
It might still be better than 🥜 that MS gives
Does MS = Microsoft?
True but amazon is sweat shop with slavery promoted