Yes it is legal to walk them back if it was a mistake: https://www.wikipedia.org/wiki/Unjust_enrichment
Amazon walking back raises after internal bug miscalculated compensation
61–70 of 175 posts
Re: Amazon walking back raises after internal bug miscalculated compensation
#62Earlier quoted context omitted.
Since there are comments saying things like "I've never seen them based on dollar value": My well known company has always granted stocks based on dollar value. Many employees incorrectly thought it was "number of shares", but if anyone actually asked the manager who decided how many shares they would get, the answer was always "We're given a dollar budget in shares to allocate amongst our reports - the system then c…
Yes, a place I'm familiar with gives you a dollar amount. At RSU distribution time (i.e. when you actually receive them, not at offer-time), you will receive that dollar amount of shares, regardless of each share's value. TBH I'm not sure why they structure it this way (maybe fewer taxes than payroll? or looks better on a balance sheet, somehow?).
One possible reason is that they can pretend it’s not costing them anything when they report “adjusted” earnings.
Re: Amazon walking back raises after internal bug miscalculated compensation
#63Two things going on here: 1. First, I'm a bit baffled by some of the responses along the lines of "Amazon should just own their mistake". Sorry, but in the real world, "finders keepers" rarely applies (unless you're talking about crypto, but I digress...). I would certainly want a bug corrected if it were in my favor, and if a bug went the other way, I might need to re-evaluate my company satisfaction based on my new…
This is not finders keepers.
The article is slightly vague, but my takeaway is that employee got raises. Those numbers went through a bunch of people. The pay went out for months. Then, they realized they miscalculated the raises. “Whoops, we didn’t mean to offer you $150k, but really $140k.”
1. I think they have no chance at getting back the pay from before. This isn’t a banking error, this is regret. As an employee could you be like, “whoops I messed up my budget. I wouldn’t have taken this job at $150k. Please backpay me to bring it up to $180k”.
2. It’s well studied that losses hurt more than gains feel good. People hate having their comp lowered and the stock has already fallen. May be better to leave the comp where it’s at. I mean, it’s not like it was 10x or something. The numbers were reasonable enough for this to be super wide spread and people to not notice for months.
Re: Amazon walking back raises after internal bug miscalculated compensation
#64I don't get it (I never worked for Amazon!). I've never worked anywhere, where a change in my employer's stock price means my pay has to be recalculated. If you're promoted and given a raise, isn't that a deal? Suppose I'm a happy coder on $X, and you promote me to the miserable job of Project Manager on $X+10, how's it legal to call me into the office and explain that it's actually $X+2? Is compensation at Amazon st…
They are paid a number of shares and given an estimate of the value of those shares based on some share price. Amazon used an old share price, so the estimate was too high. The only thing being recalculated is the estimate. The number of shares does not change.
Re: Amazon walking back raises after internal bug miscalculated compensation
#65Two things going on here: 1. First, I'm a bit baffled by some of the responses along the lines of "Amazon should just own their mistake". Sorry, but in the real world, "finders keepers" rarely applies (unless you're talking about crypto, but I digress...). I would certainly want a bug corrected if it were in my favor, and if a bug went the other way, I might need to re-evaluate my company satisfaction based on my new…
Regarding 1, I have seen this happen. I used to work for a govt agency that made a mistake and overpaid a number of employees, who were allowed to keep the extra payment. I'm not saying that's the norm, but it affected a number of people and I have heard of it happening other times as well.
Re: Amazon walking back raises after internal bug miscalculated compensation
#66Earlier quoted context omitted.
There’s a difference between variable and a new hire at my current level would get literally double my current comp as a person at the company for five years
a new hire at my current level would get literally double my current comp as a person at the company for five years That's not unusual. Well, 2x salary might be, but it's well established that job hopping is the only way to guarantee your salary stays close to market.
To add a data point to this, I recently interviewed at a large tech company. As part of investigating the comp, I ran a linear regression on data from levels and the results indicated that you should deduct a few grand for every year of tenure.
Re: Amazon walking back raises after internal bug miscalculated compensation
#67Two things going on here: 1. First, I'm a bit baffled by some of the responses along the lines of "Amazon should just own their mistake". Sorry, but in the real world, "finders keepers" rarely applies (unless you're talking about crypto, but I digress...). I would certainly want a bug corrected if it were in my favor, and if a bug went the other way, I might need to re-evaluate my company satisfaction based on my new…
The web is littered with people telling their stories of getting overpaid in comp, frequently around bonuses, and having the company ask for their money back. They're always disappointed to find out that they do, legally, owe the company the extra pay back. Good companies will work with the employees on this. Other's can be a bit shitty about it.
Big caveat that this is a US-centric view.
Re: Amazon walking back raises after internal bug miscalculated compensation
#68Earlier quoted context omitted.
In your compensation letter it may say a $ value but it’s just a formulaic presentation based on the fixed # of RSUs. You’re not compensated by “You’re getting $20,000 in however many RSUs that can buy at the time”. It’s “you’re getting 100 RSUs” and then whenever you get them your compensation letter states their current $ value.
Not Amazon, but when I receive RSUs it is denominated in the dollar amount. In a year when the first part vests the dollars are converted to stock units based on the price at that moment. Thus I do not know how many units of stock I am receiving until the first vesting event, because I don't know what the price will be in a year.
That... is truly bizarre. I've literally never heard of that before.
The entire point of RSU's (or stock options) is that if the company increases in value over time, e.g. over your first year, so does the cash value of your RSU's. That employees benefit as the company benefits.
What you're describing is zero benefit at all. It's no different from just being granted cash that vests. It's such a strange and seemingly pointless thing to do, that I have to ask -- are you sure that's how it works? And if so, has someone from the company ever explained why they do that?
Re: Amazon walking back raises after internal bug miscalculated compensation
#69Earlier quoted context omitted.
>You’re not compensated by “You’re getting $20,000 in however many RSUs that can buy at the time” In my company this is exactly how it works. Bonus is X% of salary and the exact number of RSUs and SARs is floating until the time they are granted. Everyone hopes the market has a bad day when the bonus is granted. I assumed this is how it works at all large companies.
Given a certain dollar amount (e.g. X% of salary), the number of RSUs to grant is calculated by dividing the dollar amount by the market price of the stock. There are two common ways to calculate the market price of the stock, and the difference comes down to this: 1. The market price of the stock is determined at the time of the grant, and; 2. The market price of the stock is determined at the time the RSUs vest. If…
In my company there are multiple important days:
1) Find out RSU bonus value: "you get 20% of your salary worth of RSUs"
2) Grant Date: Company Calculates the number of RSUs, issues them, and starts Vesting schedule.
3) Vesting days: Some of the RSUs become vested and can be sold by the employee.
>The market price of the stock is determined at the time the RSUs vest.
What is the point of giving stock priced on the vesting day? It has no chance to go up or down between the grant and vesting date when it is sellable.
It would be the same as a cash bonus with an X year delay.
Re: Amazon walking back raises after internal bug miscalculated compensation
#70Two things going on here: 1. First, I'm a bit baffled by some of the responses along the lines of "Amazon should just own their mistake". Sorry, but in the real world, "finders keepers" rarely applies (unless you're talking about crypto, but I digress...). I would certainly want a bug corrected if it were in my favor, and if a bug went the other way, I might need to re-evaluate my company satisfaction based on my new…
When I was 20 something, I had an extra zero added to a severance payment. I randomly called some law firm asking if I should just keep that. The lawyer dude plunged his arm into the telephone line and slapped me silly.