r/amazonemployees • u/Sea-Piccolo-6695 • 10h ago
Engineer hitting 4 year cliff tips
I’m an L5 engineer based in the US and my 4 year anniversary is soon. Based on the latest compensation plan after the 4 years I’ll have my RSU’s cut making me have a lower salary than I’ve had like 17% less. How do folks typically handle this? Do I talk to my manager about getting an RSU refresher to make my salary ‘whole’ again?
I’m on good terms with my manager and skip. Not necessarily looking for a promotion or raise unless that path is better to do first vs asking for RSU refresher. Thanks!
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u/flashodad 9h ago edited 6h ago
Is this drop a reduction from your actual target compensation or is it a regression from overperformance of the stock during your 4 years?
If you were hired 4 years ago, the stock price was dropping toward $100. Depending on your exact hire date, your calculated price was probably less than $110/share (but let’s assume $113…). Amazon prices in 15% annual growth to that price. So by the time you hit your last vest on your 4 year anniversary, the planned stock price would be around $197. But in reality, the stock price is currently sitting at $258. So you effectively saw 23% annual growth. Obviously, this is generalizing because of fluctuations over time…if your 3.5 year vest hit in April when the price was up near $270, then that’s even higher.
So if they initially gave you 100 total RSUs for the 4th year and it was split 50/50 (trying to make math easy here..), then ballparking numbers would be:
Expected income: 50x$190 + 50x$200 = $19,500
Possible actual income, depending on vest dates: 50x$270 + 50x$260 = $26,500
That would mean that for the 4th year, your RSUs netted you ~35% more than you were intended to be paid. Or…your target compensation from RSUs was ~26% lower than your actual compensation.
So the number of RSUs they’re offering you this year is going to target closer to that $19,500 number (~75 RSUs at $258) than to $26,500.
Is it a cliff? Sure. Is it because you were effectively getting bonus growth and are now reverting back toward target? Probably. Only you have the specific numbers to be able to tell what’s going on, but that is what I’ve seen most often.
This is the risk/reward of having your pay dependent upon the stock price…sometimes it goes up faster than expected and you cash in to make bonus money and sometimes it goes down and you get stuck with either getting paid less or sitting on stock and waiting to see if it goes back up.
Edit to add: they aren’t going to give you a refresher just to make up that extra growth. You can ask…but expect them to tell you similar to what I said above (target compensation, market performance, etc.) without trying to give specific examples. If you stay with Amazon, they’ll give you another grant in April 2027 that will add some 2028 and 2029 RSUs. They always try to keep two years’ worth of potential income dangling out there…
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u/Working_Farmer9723 6h ago
This sums it up. No need to read other explanations. You need to level up to maintain this pay.
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u/saiku-san 8h ago
Asking for an RSU refresher doesn’t work at Amazon. Increasing your performance to hit TT YoY is the only way to maintain your salary right now with the way the stock grew over the last few years.
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u/charleefter 9h ago
There's literally nothing you can do besides get a promotion or switch companies. It's how back loading Amazon stock works and why the cliff happens.
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u/KostekMan 8h ago
You can also get better performance ratings that result in better band penetration
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u/warrior5715 6h ago
This doesn’t always work. For some people.. even if they get promoted the comp is lower.
Curse of negotiating and stock going up
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u/Sorry_Cheesecake_382 5h ago edited 3h ago
Quit. Start a business, go on COBRA (you get your full Amazon insurance in the US for 18 months). If you fail come back in 18 months at L6 top of band or L5 top of band. If you’re too cheap or can't afford to pay $1k a month for COBRA kiss the ring and continue working.
Did this a few years back business did 2M after 12 months of grind. I learned more in a few months than years of Amazon. I to this day still get recruiter emails every Friday to return, during layoffs too. It's a nice insurance policy if I ever need it.
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u/roflfalafel 3h ago
Here’s the fun part… you don’t. Amazon has overperformed the 15% YoY growth the last 4 years. This is upside to getting RSU comp, but you are likely out of band, and unless you’re hitting TT, your comp is going to adjust down. This is one of the many reasons I left Amazon, much better options for less nonsense like this.
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u/Tasty-Finding4574 8h ago
https://giphy.com/gifs/5NbbVJeSLs1etZYjpT