arathald t1_j9g7lnw wrote on February 21, 2023 at 6:18 PM

Reply to comment by GothicToast in Amazon Corporate Workers Face Pay Reduction After Shares Slip by brooklynlad

I agree with you in general, and it’s difficult to feel like it’s worth complaining about making somewhat less than the insane amounts many folks in tech do.

The real issue here is that Amazon already assumes a 15% year-over-year appreciation of the stock when it calculates pay. This means that the threshold for employees doing better or worse than target is 15%, not 0%. If the stock goes up by 10% YOY, employees get paid less than the target. It effectively offloads an enormous amount of risk from the company to the employees.

I don’t see this as “you should feel bad for Amazon employees” but rather “Amazon is in a very bad position for attracting and retaining talent”. Competent Amazon employees can and will go elsewhere and be just fine.

GothicToast t1_j9gjsut wrote on February 21, 2023 at 8:09 PM

I think the amount of money they make is irrelevant and shouldn't prohibit them from complaining. My issue is complaining about a specific compensation variable that everyone knows can go up or down based on company performance and/or market conditions. People accept compensation in a myriad of ways. I had a contractor accept 2 jet skis once. He doesn't get to come back to me 2 years later when the jet skis depreciate asking for more compensation because the original compensation is no longer worth the original amount.

I, myself, am a compensation consultant in "big tech"... and while I don't have direct insight into how Amazon's compensation philosophy works, I would highly doubt they set their total comp targets with an assumption of 15% YoY appreciation on the stock. That just is not how the compensation industry sets benchmarks -- and we all use the same data to set our strategies.

If you're a comp consultant for Amazon, we should connect IRL and I'd love to learn more about how you guys roll that strategy out.

arathald t1_j9gmzb4 wrote on February 21, 2023 at 8:42 PM

I'm not in comp, but I'm in a tech role adjacent to it, and I've been at the company nearly a decade. I'm not going to go into details as to how I'm so sure, but I know without a doubt that the 15% I quoted is correct, unless it has changed recently. I'm not at all surprised that this isn't standard because yeah, it's weird.

Regardless of that, this news is making clear that Amazon isn't as attractive an employer as it used to be, and I think that's the real takeaway here. Yes, people knew what they were getting into, but what they're getting into continues to get worse, and the days of soaring stock prices are over. Add on top of this that Amazon announced pay increases early last year then HR quickly walked that back and told current employees it didn't apply to us*, only new hires, and there's a huge amount of dissatisfaction at Amazon's compensation.

Yes, if people are dissatisfied and can find better elsewhere, they can leave (inertia and personal costs aside), but that's the whole point, that people *are* dissatisfied and so Amazon has a pretty significant and increasing retention risk.

*Base pay caps did apply to current employees, and base pay is now increasing above old caps, but there were no significant overall pay scale increases for current employees, only the usual incremental ones

GothicToast t1_j9hybf4 wrote on February 22, 2023 at 2:30 AM

> *Base pay caps did apply to current employees, and base pay is now increasing above old caps, but there were no significant overall pay scale increases for current employees, only the usual incremental ones

This is pretty interesting to me. So you're saying when they lifted the cap, existing employees' comp was not changed, but I'm guessing new hires are being brought in within the new range (meaning way larger base salaries than their incumbent peers)? Are they given smaller new hire stock packages to balance out total comp? I can't imagine trying to measure internal pay equity between two people in the same role/grade/location and are on two entirely different comp strategies. And then keeping those two distinct strategies up-to-date against current market data. Sounds like a nightmare.

They should have moved everyone over at the same time and incurred a one-time expense, while simultaneously dropping their stock refresh budgets.

arathald t1_j9ld58b wrote on February 22, 2023 at 8:33 PM

There’s some details I’m not privy to or shouldn’t share, but I can freely talk about my own pay as well as what people have told me about their pay.

When they announced the changes, my next pay statement looked like a typical year except that there was now room for the small bump to my base pay (a couple of %) brought it above the old cap. I don’t yet know the details of my comp for the next year (comp year is April-April) but I do know it’s also incremental. Obviously due to them previously publicly announcing pay scale changes, HR and management had to have conversations with current employees clarifying that our pay wouldn’t be changed more than the typical incremental bumps. We were led to believe that our pay would be increasing more significantly this year, which isn’t happening.

I also know, secondhand, that many new hires at my same level with far less experience are getting offers that are easily 1.5x or more what I’m making.

I don’t know if they have two scales like you suggested or if they just broadened the band significantly, or if they were regularly getting exceptions for new hire comp above the band for the position.