My first compensation discussion (Amazon SDE)
May 26, 2019
12 Comments
Hey guys, I have a compensation discussion with Amazon coming up on Tuesday and I have never done one before. What should I do to make sure I don't get lowballed? I also welcome any other advice regarding this discussion.
Details:
YoE: 2.5
Position: http://www.amazon.jobs/jobs/826010
Other offer status: HC at Google for L4, expected response by Friday, also should have a startup offer next week, but no current offers in paper.
Current position: SE II at Att TC 98k
comments
To negotiate with Amazon successfully, it helps to understand their compensation philosophy: like most other large tech companies, they have comp groups/committees that set the bands and targets. There's a "total compensation target" (TCT) that needs to be met by the sum total of ALL components of monetary/cash-equivalent compensation (base, signing, and vesting RSUs). Realistically, you'll probably get an initial offer somewhere around the midpoint of the band (~215k, for an SDE2 in Seattle), with a signing bonus and RSU grant of roughly equal size. It might be lower, though, given your relative lack of experience for an outside hire SDE2 (YoE and current employer). In any case, it's somewhat unlikely they will flat-out lowball you; there's a formal policy in effect that every outside hire should actually raise the bar and therefore be paid at or above the median for that level (hilariously absurd in practice, but that's the theory anchoring the policy).
Recruiters are trained to shift the numbers around such that no matter what you ask for, the sum total adds up to (roughly) the TCT they want to give you, just in a way that psychologically appeals to you as a candidate. For example: if you push for a higher base, they WILL increase it (unless you're already running into the cap), but then they'll offset it with an (often subtle) decrease in base or RSUs. RSUs in particular are highly valued in Amazon's comp model: they're granted upon the assumption that they will increase in value at a rate of around 15% YoY (if this doesn't happen, you will--in theory--be topped off with additional shares as the year in question rolls around). This is especially significant for the on-hire grant, which is heavily back-weighted (so, 80% of your RSUs are expected to be worth somewhere between 45-60% more by the time they actually vest--THAT is the actual comp target that you don't see).
You should also know that Amazon gives notoriously poor base adjustments and refreshers to most people, so take what you can get now, and know the stronger your upfront offer is, the weaker your annual raises will be. They'll find a way to push you towards the middle in the end.
The only way to beat this is to negotiate on (and raise) the actual TCT, and moving that needle will usually require a strong competing offer and/or an SDM who really wants you. Good luck.
I have already had a meeting with the SDM and he seemed quite interested in me overall. The team also seemed really cool so I didn't have to feign interest at all. This will probably work in my favor.
Either way, none of the companies are going to budge on their initial offer much if you donโt have other competing offers in hand.