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Amazon walking back raises after internal bug miscalculated compensation

businessinsider.com

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Re: Amazon walking back raises after internal bug miscalculated compensation

#71

Post by [deleted] »

s1artibartfast wrote: post #35
ineedasername wrote: post #12

Earlier 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.

>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.

[deleted]

Re: Amazon walking back raises after internal bug miscalculated compensation

#72

Post by zwily »

Scea91 wrote: post #36
ineedasername wrote: post #12

Earlier 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 sounds absolutely bizarre. Why do stock the first year at all? I have never heard of anyone trying that before.

edit: That setup is basically saying "you don't benefit from the increase in share value for the first year of employement", which is pretty employee-hostile. I bet a company that was doing this before stopped doing it this year, when their stock value fell by a lot. :)

Re: Amazon walking back raises after internal bug miscalculated compensation

#73

Post by jonfw »

staticautomatic wrote: post #66
alistairSH wrote: post #60

Earlier quoted context omitted.

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.

Worth considering the biased data. Levels will only have data from job seekers- which would imply that they either have A) recent offer or B) salaries from employees who are considering jumping ship (biased towards employees who are underperforming or in underperforming business units)

There is probably a missing category of employees who have been successful, gotten raises, and aren't shopping for jobs

Re: Amazon walking back raises after internal bug miscalculated compensation

#74

Post by zwily »

BeetleB wrote: post #26
a-priori wrote: post #15

Earlier quoted context omitted.

RSUs are always granted as a number of shares. It's kind of the point of them, so the employee benefits from stock appreciation since their hire date. However, in offer paperwork, it will sometimes be stated as a dollar value. This is for two reasons: the first is that RSUs need to be approved by the board at a meeting, which can happen some time after the hire date, at which time the dollar value is converted into s…

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…

I think some of the confusion is from somebody claiming they are granted RSU's based on dollar value, and then that dollar value is converted to shares at the 1-year vesting cliff. That is incredibly weird.

Offer letters having dollar values for the share grant at the time is normalish.

Re: Amazon walking back raises after internal bug miscalculated compensation

#75

Post by tomrod »

Closi wrote: post #55
hn_throwaway_99 wrote: post #45

Two 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…

Yes, absolutely number 1! There is a huge precedent for companies not paying for compensation calculation mistakes, which is also supported by law (in the UK at least where I am from - but assume it would be the same in the US). Amazing how many comments in this thread are acting like this standard practice is a completely new thing with zero precedence.

PAYWALLED, else I would RTFA.

You'd be surprised how many people follow the adage: "what is right is not always popular, and what is popular is not always right."

In this case, a verified compensation item given to an employee should be respected on principle, as this isn't a one-time "whoops we overpaid you," it's a months-long process that affected many people. AMZ should write it off as a bonus and move on.

Re: Amazon walking back raises after internal bug miscalculated compensation

#76

Post by __derek__ »

travisjungroth wrote: post #63
hn_throwaway_99 wrote: post #45

Two 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…

From what I've heard, this timeline is incorrect. People with approved Q3 promotions received Personal Compensation Statements (PCS) telling them that they would get a raise starting in October. They were never actually paid the increased amount, and the time between erroneous PCS and correction was on the order of days, not months. Some folks didn't even get their erroneous PCS because their manager was slow to share it.

Re: Amazon walking back raises after internal bug miscalculated compensation

#77

Post by __derek__ »

thakoppno wrote: post #22
jonhohle wrote: post #20

Earlier quoted context omitted.

When I was last there (albeit 6 years ago), following reviews managers determined what your new “total yearly comp” would be. Base pay was pretty low compared to industry, but RSUs were used to make up the difference based on the price on a certain date with a 4-year vesting period, distributed quarterly (16 distributions). For example, if your total comp required 20k extra per year and the stock price was $100, you’…

> We always wanted the stock price to have a temporary low around review season because that would benefit our RSU grant. What a perverse incentive. I would love to know if any high-profile outages are clustered around those dates.

It's a trailing 30-day window. That would be a potentially company-destroying outage.

Re: Amazon walking back raises after internal bug miscalculated compensation

#78

Post by __derek__ »

presto8 wrote: post #4

It looks like what happened is employees got a fixed number of RSUs. Their pay letter assigned a hypothetical value to those shares based on an incorrect stock price. So Amazon is probably not changing anything in the raise itself but rather correcting the hypothetical future value of the RSUs.

Apparently some people received additional cash now in lieu of RSUs because of the administrative delay involved with the latter (e.g., board approval). For them, the raise itself changed.

Re: Amazon walking back raises after internal bug miscalculated compensation

#79

Post by [deleted] »

jonfw wrote: post #73
staticautomatic wrote: post #66

Earlier quoted context omitted.

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.

Worth considering the biased data. Levels will only have data from job seekers- which would imply that they either have A) recent offer or B) salaries from employees who are considering jumping ship (biased towards employees who are underperforming or in underperforming business units) There is probably a missing category of employees who have been successful, gotten raises, and aren't shopping for jobs

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