Do you prefer sign on bonus up front or spread out?

Amazon
qDnh26

Go to company page Amazon

qDnh26
Sep 2, 2020 9 Comments

As some people know, Amazon back-loads stock awards with a weird vesting schedule. To stay competitive they offer large sign on bonuses to keep the first 2 years compensation competitive.

In my case the bonus payout is spread out over 2 years, so it just looks and acts like my salary is doubled in terms of each paycheck.

From an Econ 101 perspective I know the time-value-money computation means it's worth slightly less to me and balances out the employer's finances a little bit in their favor. But psychologically, I actually prefer seeing the nice paycheck every 2 weeks, and I don't have to stress about paying anything back if I leave.

In 2 years if I'm still around and stock starts vesting, my bi-weekly paycheck will get cut in half, and I'll start stressing about counting down to each vesting date. Even if the stock stays strong and the total comp is great, I know from past experience I'll still stress about it.

I guess this might sound silly and irrational to a lot of people but I value psychological health more than giant payouts.

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TOP 9 Comments
  • New
    hGY84a

    New

    hGY84a
    Take the lump sum today and invest it.... you can even buy amazon stock if you want
    Sep 2, 2020 3
  • Boeing
    l33tg0d

    Go to company page Boeing

    l33tg0d
    I say the lump sum so I could get a nice used car and invest the rest but realistically it’s better discipline if it is spread out
    Sep 2, 2020 0
  • New / Mktg
    MktGuru

    New Mktg

    PRE
    NVIDIA, Broadcom Inc.
    BIO
    Lead marketing org in a Series B AI startup
    MktGuru
    Lump sum is what I would prefer. I would rather have the money work for me (by investing in my portfolios) rather than working for that money (through biweekly paychecks).
    Sep 2, 2020 0
  • National Airlines
    znva25

    National Airlines

    znva25
    add a poll
    Sep 2, 2020 1
  • Speedway / Eng
    Hank Hill

    Go to company page Speedway Eng

    PRE
    Jump Trading, AIR, Amazon
    Hank Hill
    Up front. Even taking in to account taxes, there is literally no rationale for deferring any component of your compensation a single day longer than the company demands. Opportunity cost and time value of money.

    The stock vesting schedule alone makes a $250k FB offer slightly more valuable than a $250k AMZN offer, assuming other components of TC are identical. In reality they're not because of the Y1-2 bonus at AMZN, which is offered specifically because their stock vesting schedule makes a given TC worth less than a company that vests evenly over 4 years.
    Sep 2, 2020 0