Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Microsoft Freezes Salaries for 2023

twitter.com

Post reply on HN
Print view View original

281–290 of 597 posts

Re: Microsoft Freezes Salaries for 2023

#281

Post by pb7 »

CapsAdmin wrote: post #255
pb7 wrote: post #230

Earlier quoted context omitted.

Thanks for explaining it but I know how it works better than most here, hence the comment. If you get $100K in stock options at a certain price and the price doubles, you make $100K. If it stays the same, you make nothing. If you leave, you have a certain period of time to exercise or you lose your options. If you get $100K in stock and the prices doubles you make $200K. If it stays the same, you make $100K. If you l…

I know almost nothing about this, so as far as I understand stock options are like stock except they start from "0" and you can only cash out the positive difference? Like you can only earn from the company's future growth.

A (call) stock option is the option to buy X shares at Y price by Z date (a put option is the same thing but to sell instead). You can go on any brokerage and buy a call option on Apple, for example, which would be the option (but not the obligation) to buy 100 shares of Apple at some strike price, say $200, by some date, let's say August 31, 2023. This privilege of having this option will cost you: let's say $2,000 (the real price is calculated via complex formulas). When August 31 comes around, you can either buy or not buy, but your $2,000 is gone either way. If Apple goes up to $300 on August 31, that option will now be worth $8,000 (($300 spot price - $200 strike price) * 100 shares - the original $2,000 it cost you to buy this option). If Apple went to anything below $220 ($220 - $200 * 100 - original $2,000), it wouldn't make sense to exercise your option since you would lose money. This is the basics of it.

It's generally not interesting for an employee to receive options because if the company doesn't perform well by the time your exercise date comes around or you leave the company then you get little or nothing. You would rather get stock grants which are shares that have value. If you get some shares when Apple is $200 and it goes to $100, you still have half the value of your shares.

Generally, in public companies (with extreme exceptions), options are issued to executives whose compensation is dependent on how much they can increase the company's share price. If they fail, they get little to nothing. If they succeed, they make a lot.

Thanks for asking. Let me know if you have any questions, I'd be happy to explain more.

Re: Microsoft Freezes Salaries for 2023

#282

Post by nradov »

alwayslikethis wrote: post #273
bruce511 wrote: post #268

Earlier quoted context omitted.

Generally speaking, holding (significant to you) stock in your employer is a bad strategy. Because if the company goes under you lose your job, and your savings at the same time. In other words it consolidates risk rather than diversifies it. But honestly the idea that you don't need a raise but rather invest and wait for a dividend return is bonkers. Those are to completely unrelated things. By all means invest. The…

Theoretically you can short the stock to offset the risks, though this creates a conflict of interest and can be considered insider trading. Alternatively maybe invest in a fund that invests in a competitor and other industries.

VTSAX has all your bases covered there.

Re: Microsoft Freezes Salaries for 2023

#283

Post by danaris »

TensorPoint wrote: post #156
oh_sigh wrote: post #140

Earlier quoted context omitted.

The company and its income is for the benefit of the shareholders, not the employees. Maybe the argument can be made that they should pay more money to certain people to improve their future income, but that has nothing to do with how much money they make.

Freezing salaries for all employees doesn't seem like a sustainable way to save money in the long run and the second order effects would probably destroy shareholder value not create it

Ah, but in the long run, they'll have already cashed out the shares or options they wanted to juice the value of, so who cares?

Re: Microsoft Freezes Salaries for 2023

#284

Post by jameshart »

alwayslikethis wrote: post #273
bruce511 wrote: post #268

Earlier quoted context omitted.

Generally speaking, holding (significant to you) stock in your employer is a bad strategy. Because if the company goes under you lose your job, and your savings at the same time. In other words it consolidates risk rather than diversifies it. But honestly the idea that you don't need a raise but rather invest and wait for a dividend return is bonkers. Those are to completely unrelated things. By all means invest. The…

Theoretically you can short the stock to offset the risks, though this creates a conflict of interest and can be considered insider trading. Alternatively maybe invest in a fund that invests in a competitor and other industries.

Most companies forbid their employees from holding derivative or short positions in the company’s stock.

Re: Microsoft Freezes Salaries for 2023

#285

Post by ladberg »

Infinitesimus wrote: post #229
ladberg wrote: post #220

Earlier quoted context omitted.

FWIW I switched from FAANG to trading last year and got a pretty big comp increase. I was entertaining an offer from another FAANG at the same time and it was still nothing compared to my offers in trading.

Wanna share some ballpark numbers? It'll bolster your statement a bit and grounds the claim from others with similar experiences

Won't give my current salary because this isn't anonymous, but my 2021 TC was ~150. Another FAANG offered ~200, and trading firms all offered numbers way higher.

Re: Microsoft Freezes Salaries for 2023

#286

Post by foogazi »

bruce511 wrote: post #268
paulpauper wrote: post #248

just buy the stock, which keeps going up....this is effectively the same as a raise. Profit that would go to employees goes to shareholders. It's like a conservation law.

Generally speaking, holding (significant to you) stock in your employer is a bad strategy. Because if the company goes under you lose your job, and your savings at the same time. In other words it consolidates risk rather than diversifies it. But honestly the idea that you don't need a raise but rather invest and wait for a dividend return is bonkers. Those are to completely unrelated things. By all means invest. The…

> Because if the company goes under

Microsoft is not going under

Re: Microsoft Freezes Salaries for 2023

#287

Post by abhorrence »

jhp123 wrote: post #182
DiggyJohnson wrote: post #154

Earlier quoted context omitted.

Or the pattern is due to a common cause between the high tech firms, and we know what that common cause is: they overhired 2020-2022.

Come on. If Google broke ranks and started aggressively poaching people for GCP and going after market share, Amazon would realize in about 5 seconds that it hadn't "overhired" for absurdly-profitable AWS after all. These firms have colluded to drive down wages before (the "Techtopus" case), a fact that we know because they were stupid enough to put it in writing. This time there's no proof and may be no explicit agr…

The way most of these companies are colluding now is by using third party firms that "aggregate industry salary information". So basically company X provides their data, pays some dollars, and get access to what other companies in their "peer set" are paying for different types of levels/experience. Reminds me a lot of the schemes companies will sometimes use to do bribes in other countries -- paying a third party consultancy who they had "no possible way of knowing that they were actually just bribing people".

Re: Microsoft Freezes Salaries for 2023

#288

Post by foogazi »

astrange wrote: post #278
charcircuit wrote: post #266

Earlier quoted context omitted.

And with Microsoft's stock purchase plan you are incentivized to buy stock anyways.

ESPP isn't exactly like buying stock, it's more like lending the company your paycheck for a few months in return for a free 10-15% return. Which is pretty good!

It’s the best deal in the world

Re: Microsoft Freezes Salaries for 2023

#289

Post by danaris »

WalterBright wrote: post #47
dig1 wrote: post #10

Yet CEO's bonus in 2022 was 20x bigger than his salary. I don't think it will be less this year either; with all-time high stock price and these "cost cuts", he will be wholesomely rewarded.

Anyone can buy MSFT and get their share. As for the employees, they have stock options and are getting a piece of the all-time high stock price. Although MSFT's all time high stock price was in 2021. This goes for all public corporations. Anyone can get a piece of the action by buying some stock in them. As for the size of Nadella's compensation package, speaking as a long term MSFT shareholder Nadella has earned it.…

"Anyone" who has disposable income.

So, y'know. Not the 58% of Americans who are living paycheck-to-paycheck.

And, um...you know what you call people who buy a stock at its all-time high?

Suckers.

Re: Microsoft Freezes Salaries for 2023

#290

Post by danaris »

SoftTalker wrote: post #162
status_quo69 wrote: post #52

Earlier quoted context omitted.

It's not secretly a salary cut, it's an explicit salary cut relative to the cost of living and everything else. After all, your money is worth less now than it was a year ago if there's no cost of living increase? I'm sure the initial circumstances of salary negotiations for a position took into account current economic factors. I'm much less likely to want to stick around at a company that cannot compete with living…

But the company itself faces all those challenges too. Customers are cutting back because inflation is forcing them to reallocate their own spending. Supplies cost more. Raising prices isn't always possible in the face of competition, at least not enough to offset inflation. Inflation is basically a correction for a previous period where money was too cheap. It hurts everyone (at least everyone who didn't prepare for…

The company can dry its tears with the several billion in profit they make.

There's no non-greed-related reason they can't share that profit with their employees, rather than stiffing them just when they need help.

Post reply on HN