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Comment by kpwags | Hacker News Reader

I can understand some of the frustration, especially for those making just shy of $15 before the raise, but even if the raise is only from $14 to $15, that still is around $2,000/yr (assuming 40 hour work week) that is guaranteed the way a bonus generally isn't.

I would almost always prefer a raise over a one-time bonus for that exact reason. In my experiences, I can't always count on my company giving me a yearly bonus.

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It was on a curve. If you were already making over $15, you still got a raise.

edit: If you were making under $15, you could still be bumped higher than $15 as well. They raised the base rate and then there are still modifiers on top of that.

Not to mention, if next year they get let's say a 3% bump in salary, a bonus wouldn't be included into the calculation to determine their larger salary. Salaries are better than a bonus.

That's all well and good, but Amazon replaced their bonuses for raises and then pretended like they were giving everyone an actual raise when in fact, some people could end up getting a pay cut.

Their claim is that everyone affected by this is getting a net raise. Do you have evidence to the contrary?

According to the article:

"Those making, say, $14 an hour prior to the increase may only receive a $1 raise, which fails to make up for the loss of benefits."

And the Amazon statement in the article says "more than compensates for the phase out of incentive pay and future RSU grants."

The conflict is probably due to the fact that RSU grants were very lucrative over the last few years. If you assume that the stock is going to quadruple in the next 3 years, then yes, a RSU bonus is probably better than a raise, but I don't think Amazon will be a 4 trillion dollar company in 3 years time...

> The conflict is probably due to the fact that RSU grants were very lucrative over the last few years.

The conflict is probably due to the fact that Amazon publicly and loudly announced the raises alone in response to political pressure, to pretend they were giving people the same deal but with higher hourly wage, and the the benefit cuts became known later and separately. It would be a conflict even if there was no question that everyone was getting at least a small net raise, because even if that is true everyone is also getting a smaller net raise than Amazon tried to get public credit for. Being caught in a lie, including a lie of omission, by people concerned with the issue about which you are being deceptive, produces (or exacerbates) conflict.

correct. For companies with heavy RSU based compensation they assume a certain % of growth every year. Say 10%. Let's say Amazon did 50% year over year. You did better than you expected. However, next year you will get less RSUs since you made a lot more than planned in the previous year.

Having a very good year, as I imagine most Amazon employees did, does not mean you should get the same windfall money next year. I'm sure that is not properly understood.

Not properly understood? No, the bonuses were taken away and the pay rate was raised instead. However, Amazon said people were just getting a raise because of the poor pay they've been getting. They weren't promised a different way of getting paid. They were promised a raise

I read an article that said a lot of employee's look at their RSU as a bonus of when it vets. But in reality, it's part of their compensation. Not sure what Amazon told employees vs what was in the press "starting wage of $15". I can understand the frustration if they said "everyone is getting a raise" and then the math doesn't check out. We need more math.

I've been in a situation where I worked for a company where a large portion of my comp was RSUs. We had a really good year and I probably made $30,000K more than they were estimating (assuming the stock grew at x%). The next year and two, I got a ~5% raise. I took home less money those two years since I had a windfall the the first year and then our stock leveled out. So despite performing well, and getting healthy raises, I took home less money.

I would imagine the hourly workers might have just a few RSUs at best at Amazon's share price of $1500-$2000 per stock. Since that is such a large percentage of their annual income and if Amazon was trying to level it out to make it less spikey, people probably thought money was being taken away because Amazon's stock did so well the previous couple years.

Basically, Amazon Employee's got really lucky with RSUs and got paid more than Amazon was planning for. So now Amazon wants to bump them up in "planned/target" compensation -- which may be less than they made previously because the stock did wildly good.

I think the article misunderstood how the raise works. It's an increase in base pay plus existing multipliers. So if your base was 10 and you worked nights, for example, bringing you up to 15, your base will now be 15 and your multiplier brings your pay up to 22.5.

I don't think they said "everyone".

They repeatedly said that nobody was getting a pay cut

From the article:

> “Again, all hourly operations and customer service employees will see an increase in their base pay, as well as in their total compensation,” Amazon SVP Jay Carney said in the letter, obtained by the Jeff Bezos-owned Washington Post.

Yes, a bird in the hand is worth two in the bush. But if it's really the case that some people are coming out with less money in the end then they've misrepresented themselves publicly.

The problem is this was announced as giving them a massive raise. It turns out it was really just a wash and mostly a PR stunt. They aren't actually giving the employees more money than before.

People were comparing this to Henry Ford's livable wage.

This is also good for workers in that most compensation conversations in my experience (professional agency recruiter for 2 years now), start with the employer asking "how much did you make in your last role"

Anyone answering that question would be including bonuses. Or maybe you use a question like that to determine who the suckers are? How does one’s compensation at their previous company have any bearing whatsoever on how much value they can provide to a new employer, other than trying to low-ball them?

And for those few with a Defined benefit pension as a bonus is not pensionable.

This makes plenty sense but, still, why not keep both when they can clearly afford to? It really doesn't look good. They say the new setup more than compensates for the removal of the old. But how much more? Does it cost amazon 5% more, 20%?

I think even from a PR perspective it might be the right move. In prior news cycles about Amazon's compensation, I don't think we heard about all the people who apparently were already making $15/hr after expected bonuses.

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