The way Amazon does vesting is a scam for any engineer willing to work there, IMO. Big shiny number that they can dangle in front of engineers, and everybody thinks "Oh, sure I can do 4 years for that..."
More correct:
Of the big tech companies, only Amazon structures its RSU so it's heavily backloaded.
Since initial grants are larger (roughly 2x) than refresher grants, the equal vesting of the initial grant (old behavior) could cause a significant drop in compensation for new hires after 4 years at the company (the dreaded equity cliff). This would only happen for relatively "flat" performers, as if you're on an upwards trajectory the larger size of later grants would eventually catch up to your initial equity grant.
Let's say the sign on equity was 200 shares, and refreshers were 100. With equal vesting it would look like:
Year 1: 50 shares
Year 2: 50 + 1 x 25 = 75 shares total
Year 3: 50 + 2 x 25 = 100 shares total
Year 4: 50 + 3 x 25 = 125 shares total
Years 5+: 4 x 25 = 100 shares total (20% drop!)
The problem has actually been worse, because grants are actually in dollars and the stock has been growing consistently year over year. Which means earlier grants are worth more in dollars in later years than new grants, despite having the same dollar value at the time of issue. Let's say 20% yoy, which is not far off from average over the last 10 years. We'll work in dollars and say the initial grant was worth $200K at sign-on time and later grants worth $100K.
Year 1: $50K = $50K
Year 2: $50K * 1.2 + $25K = $85K
Year 3: $50K * 1.2^2 + $25K * 1.2 + $25K = $127K
Year 4: $50K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $177.4K
Years 5+: $25K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $134.2K (23% drop!)
With the frontloading this becomes:
Year 1: 66 shares
Year 2: 66 + 1 x 25 = 91 shares
Year 3: 44 + 2 x 25 = 94 shares
Year 4: 12 + 3 x 25 = 87 shares (7% drop)
Years 5+: 4 x 25 = 100 shares
With stock appreciation this becomes:
Year 1: $66K
Year 2: $66K * 1.2 + $25K = $104K
Year 3: $44K * 1.2^2 + $25K * 1.2 + $25K = $118.4K
Year 4: $24k * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $132.5K
Years 5+: $25K * 1.2^3 + $25K * 1.2^2 + $25K * 1.2 + $25K = $134.2K
So the dip is entirely smoothed over. Add in natural increases do to career growth and you no longer notice it.
So lets' say I start in January with 5% vesting after 1year, 15% after 2 years, and 20% every 6mo for the next 2 years. The signing bonus starts large and then shrinks proportionally to keep the TC constant. In my mind the only change is that my salary gets more "lumpy" at the end because I'm getting paid every 6mo instead of every 2wks.
So right before a vest I'm thinking "it's worth it to stay for 1 more week for 20% of my stock" but right after a vest the question is "is it worth it to stay 6months for 20% of my stock and 6 months of base pay?". That latter question seems the same whether my TC is cash or stock.
So you'll get people who can't walk away because they can't get TC of $500K somewhere else.
Developers who went to tier C schools, 3.X GPA, 2-sigma IQs instead of 3, they have a shot at getting into Amazon and actually making way more and getting much better equity than they would working in IT at their local HR company (<$100K salary, negligible to 0 equity)
Again though, if you are capable of getting into any other FAANG, of course do it.
It's pretty standard in Finance that you're not eligible for a bonus until you have been with the company for a full year for exactly this reason.
It's a scam when it's compared to how every other tech company does it. The standard is a 1 year cliff at which point you get 25%, then uniform vesting every quarter.
> that you're not eligible for a bonus until you have been with the company for a full year for exactly this reason
This is exactly the standard in tech as well, but we're talking about an equity grant vesting schedule, not a bonus payout.
That does change the math if Amazon is giving $100k bonuses each year for the first two years.
Often but not always. I worked as a senior exec in a near-FAANG, large public corp and at one point the board changed the equity comp of my level and up execs to a pretty complex formula that was significantly back-ended but also had possible multipliers in the event our stock metrics exceeded the avg stock metrics of a composite of several similar firms in similar markets. At the time it was started, a lot of us assumed we might get about the same at the end of the day and maybe a little more but have to wait longer for it.
After four years, we actually maxed all the multipliers and ended up making >200% what we would have under the previous standard vesting. I heard that HR and the board comp committee felt they'd made a 'mistake' because we'd ended up getting so much more than the 'intended' range - however, we also worked our asses off and the companies stock was soaring, so they couldn't really complain. BTW, the net-effect of the back-loaded vesting and soaring stock was that we all ended up holding for longer than we otherwise might have which ended up adding nearly another 100%. Since we're already talking about pretty hefty comp numbers, post-multipliers plus a ~doubling of the stock price, it ended up being life-changing money. Good times, indeed.
So, not every 'non-standard' equity vesting schedule is necessarily a bad thing. Sometimes they are structured as a set of trade-offs, where the downsides are balanced by upsides tied to certain things and need to be assessed on that basis.
+1. Every amazonian i know who stayed at the company a while had crazy good equity because of the holding and stock growth. The historically stable growth really encouraged people to stay longer, and internally people always talked about how much the stock was when they joined. I know plenty of people who cashed out their equity and got houses in seattle area, in cash. Hearing these stories as a young engineer, and old alike really makes you feel compelled to stay and see where it goes for you. If you're young, you want to get in for when it goes up (FOMO), and if you've been there, you want to stay because you've been so well rewarded, and waiting a little longer will get you a bit more money because of refreshes and growth.
I don't think I've ever heard of this? I started at a bank in Q4 and got a pro-rated bonus.
And to put it another way, if you're moving jobs in financial services without negotiating a make whole, you're not getting the best deal.
"I'm very interested, but unfortunately I can't make any moves until February, when I get my bonus. Sucks, but what can you do?"