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Comment by paulintrognon | Hacker News Reader

It's one thing to refuse interviews, and another thing to quit a job you love and invested 5 years of your life and that paysvery well.

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The latter it's much easier: the stocks are vested after 5 years, the unspent disposable income is saved somewhere and now and you are ready to leave.

Also the turnover of engineers in Amazon is among the highest in the industry and only a few stay beyond 5 years.

In comparison, refusing to work for some FAANG takes 10 times more courage for someone out of college and without saving.

Tim himself acknowledged in his message that he’s leaving over a million dollars in unvested RSUs on the table by leaving.

It's a little silly to talk about unvested RSUs as "leaving money on the table" when they are analogous to future unearned salary, which everyone by definition gives up when they quit a job. If you don't have any RSUs but you make $100k a year, and an actuarial table says you can expect to live for 50 more years, then you're theoretically "leaving $5 million on the table" when you quit your job, but no one describes it that way.

They aren't analogous to unearned salary in this context.

The RSUs are essentially going to show up as long as you stay employed. The same is not true of your salary (as a lot of people are learning first hand during this economic downturn). The value of RSUs changes with the value of the company, which is also not true with salary. While you could argue that RSUs granted at hiring might just be part of your comp, refreshers are generally seen as having been earned based on past performance, with income deferred to encourage retention.

As a consequence, when you leave a job and go work somewhere else, it's far more likely that you will find a commensurate salary somewhere else than something commensurate with unvested RSUs; even if you get something to match the RSUs, it's likely not going to "vest" on the schedule you once had.

>The RSUs are essentially going to show up as long as you stay employed. The same is not true of your salary.

Huh? I'm pretty sure they have to pay you a salary to keep you employed.

> refreshers are generally seen as having been earned based on past performance, with income deferred to encourage retention.

If they won't pay you money until you do X, then the money is payment for X, not payment for previous work, even if they try to market it as "deferred" payment for previous work. Gotta be clever enough to see through the doublespeak.

Future salary: you will get this only if you keep working, if you quit you will not get it.

Unvested RSUs: you will get this only if you keep working, if you quit you will not get it.

See the similarity? If it walks like a duck and quacks like a duck etc.

The whole concept of unvested RSUs is basically a clever psychological trick to exploit the endowment effect to make quitting seem more punitive than it actually is. People react more negatively to losing money that is "already theirs" than losing future income. If you trick people into thinking their $1 million of unvested RSUs is "already theirs" then they are more averse to quitting and losing that $1 million then they would be to quitting and losing the same $1 million in future salary.

> As a consequence, when you leave a job and go work somewhere else, it's far more likely that you will find a commensurate salary somewhere else than something commensurate with unvested RSUs; even if you get something to match the RSUs, it's likely not going to "vest" on the schedule you once had.

That's obviously not true, since people in RSU-ville switch jobs all the time, which they wouldn't do if the new job weren't at least matching their old RSUs.

> Huh? I'm pretty sure they have to pay you a salary to keep you employed.

That is pretty much in the definition of employment. However, what is not in the definition of employment is how much salary they pay you.

> If they won't pay you money until you do X, then the money is payment for X, not payment for previous work, even if they try to market it as "deferred" payment for previous work. Gotta be clever enough to see through the doublespeak.

Right, but the "gotta do X" in this case is, "still come in to work".

> Future salary: you will get this only if you keep working, if you quit you will not get it.

So that part isn't true, as many people have recently discovered. Your salary can be cut, either explicitly or implicitly by inflation.

> The whole concept of unvested RSUs is basically a clever psychological trick to exploit the endowment effect to make quitting seem more punitive than it actually is.

I think you misunderstand the value of RSUs. The trick you are listing above could be handled just as simply with "bonus cash payments". RSUs have other attributes beyond the simple endowment effect.

> If you trick people into thinking their $1 million of unvested RSUs is "already theirs" then they are more averse to quitting and losing that $1 million then they would be to quitting and losing the same $1 million in future salary.

I've never seen that play out. If anything, I've seen, relative to their value, people pay more attention to their future salary than their future unvested RSUs. Pay someone more than their market rate in salary, and it becomes amazingly psychologically difficult for them to step away from the job.

> That's obviously not true, since people in RSU-ville switch jobs all the time, which they wouldn't do if the new job weren't at least matching their old RSUs.

You may not have seen it, but I certainly have... first hand.

There's this reality that as you get farther away from the time of issuance, if the company is growing and doing well, the value of the RSUs go up. It can consequently become very difficult for a prospective new employer to match the value of the RSUs, as they effectively become worth more than the market value of the employee's skills. The employee might hope that new employer RSUs can similarly grow in value like the ones they have from their current employer, but the same growth could happen with their extant RSUs. This is a key aspect of how RSUs can be different from "future salary".

The key to golden handcuffs is that they get tighter as time goes on.

> So that part isn't true, as many people have recently discovered. Your salary can be cut, either explicitly or implicitly by inflation.

RSU values will also go down if shares prices go down. In practice they are much more volatile than salary, people's RSUs fall in value by >50% all the time, but it's pretty rare for people to get a >50% cut in salary.

Very true, but the allocations remain fixed. Their value doesn't really change based on individual performance, which is part of why they see them as "lost" when they walk away. On average though, they tend to at least track inflation. In practice, you'll find their effectiveness for retention trends to track a company's prospects. If you work at a company whose stock has done well over you've been there, you could see why it'd be hard to go somewhere else and be as well compensated as you'd be staying where you are.

I think there's an implicit assumption being made that when a person quits a job, they're likely to get another one shortly that pays about the same or maybe a bit more, so the loss should be negligible in the grand scheme of things. But if the cost of switching would be very high -- as it might be in Tim's case, depending on what his next role pays, or if he retires altogether -- then it's worthy of mention.

Stock refreshes are relatively common at FAANGs, the quantity of which depends on your performance.

Tim, being a distinguished engineer, likely got a lot of RSUs. So while true his initial sign-on RSUs likely vested already, a sizable chunk did not fully vest yet.

So yeah I'd wager he still walked from ~1 million.

Indeed, at a steady state of annual refreshers, only something like 25 percent of your grant vests annually. My preferred approach here is to ignore the gross grant total and focus on the annual vesting portion. On that front you're not really walking away from 1 million only 250k? Still a lot for most folks but no different than engineers considering retirement. Presumably at age 64, as a distinguished engineer, Tim has enough cash to skip out on work in perpetuity if he so desires.

I think you dramatically underestimate how hard change is for people.

Sure, rationally it's easier to quit. But humans are not perfectly rational spherical volumes. Quitting means not having a place to go every day, not seeing the tribe you're used to spending most of your day with, not knowing what "normal" will look like tomorrow, and signing yourself up for making a series of very difficult, stressful executive decisions around what to do next.

> I think you dramatically underestimate how hard change is for people.

That's a bit patronizing. I quit Amazon myself.

Erm... yeah it is a different thing, it takes a much stronger conviction to refuse the interviews in the first place. To follow your morals when you haven't first spent years looking the other way while saving up likely millions of dollars that allow you the option to never work again.

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