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Comment by product50 | Hacker News Reader

This is why the 10/20/30/40 vesting schedule which companies like Snap have is so problematic. Snap is laying people off and are saying that they expect to save a large amount of costs related to stock based compensation because of it (given they are a business I don't blame them for this line of thinking). However, from the laid off employee perspective this is pretty bad: 1) they worked hard to get Snap to this point but didn't get an equitable share of the rewards given backvested stocks 2) some of them might have just ended year 2 or year 3 of their tenure at snap and the big pay off was about to come and just like that they were laid off. Worse, being laid off destroys your negotiating position as you are trying to get a compensation package from your next company. An equitable 25/25/25/25 vesting schedule would have dealt with this much more fairly from the employee's standpoint.

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If I was a prospective employee, I would probably write off ever working for Snap due to this story combined with the vesting schedule.

Last thing you want as a software engineer is coworkers under artificial pressure from worries of not performing enough to the point that they will get laid off & lose the upside of working for a public company offering stock - there are enough real world pressure situations I would rather save that for.

> the 10/20/30/40 vesting schedule which companies like Snap have is so problematic.

What?! I've never heard of this, other companies follow this madness? Who are they so I can stay away?

Amazon, actually. It's something like 5/15/40/40, maybe a current/former employee can chime in.

That's correct.

Source: Current AMZN employee

Correct, however they also give 2 signing bonuses, that bring you to an "equivalent" total compensation, so at least you are getting straight cash, not hoping for a stock payout that may not come.

Other top companies also give signing bonuses as well as the usual vesting schedule, so I'm not sure this really evens it out.

Yeah but they don't give 2 signing bonuses right? That seems downright weird from a terminology perspective... how can you legally have 2 signing bonuses if you sign only once? :)

They mean that the signing bonus is divided into two yearly payouts instead of one. It's a single bonus.

I personally don't see what's wrong with a N/2N/3N... vesting schedule for post-IPO companies. You're buying in long term, that's the deal. Is it sided to favor employee retention for the employer? Sure. The overall comp at AMZN is pretty competitive though. That's the deal.

It makes more sense for a fiscally stable company like Amazon, which actually sees reliable stock growth and a real business model as compared to snap with neither of those things-- but that's not a criticism of the vesting schedule, it's a criticism of snap's true value. That's the thing that would keep me from a company like that, not the length of my RSU vesting periods.

Source: ex AMZN employee

That is not really true. It depends on how much you get in stocks. Fkr example, it is not typical for these companies to give out $200k stock/yr and then the backvested schedule is really packed against you. It is very unlikely they will give you $200k sign on bonus and make it up during year 2 as well.

Holy hell. Are the grants massive?

My offer was competitive. With the 2yr cash bonus and the stock taking over in year 3 my total comp is projected to evenly ramp up 5-15% per year. Who knows where the stock will be until we get to the vest dates, but so far it's tracking well ahead of the 15% yearly growth that the company plans on.

Yep, it's still that, even for acquired companies that are owned by Amazon.

> 10/20/30/40 vesting schedule

What does this mean?

I suspect (and somebody else please correct me if I'm wrong) that it refers to how much of your options vest over a period of time.

So you'd get 10 percent of your options after one year, another 20 percent at the end of your second year, another 30 percent at the end of your third, and the remaining 40 percent at the end of your fourth year.

Note that in order to collect even half of your options, you need to work there for three years.

This is correct. Snap has this structure in place before their ipo.

Source: I had an offer from Snap 3yrs back which I rejected because of this.

If I am correct, it means you can make use of 10% of stock options that you are given as compensation after the first year of employment, 30% after the second year, 60% after the third, and all of it after the fourth.

It means that you have barely more than a quarter even after two years, and barely more than half after three.

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