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AMAZON EMPLOYEE COMPENSATION 2020 - HOW EMPLOYEES AT AMAZON ARE PAID (SALARY, BONUS, & RSU's) - YouTube
Channel: Avier Wealth Advisors
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- Let's talk about new
Amazon employee compensation.
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First, if you're watching this,
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I suppose either congratulations
on your new job at Amazon
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or perhaps you're considering
getting a job at Amazon
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and maybe you find this
beneficial in some way.
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There's a couple of ways in which
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new Amazon employees are compensated.
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The first, general base salary
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really, really straightforward.
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The second is a year-one and
a year-two on hire bonus.
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And then the third is
restricted stock units.
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Let's talk a little bit about
how each of these plays out
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and look at a timeline.
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Base salary really,
really straight forward.
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You're paid each and every month.
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Not a lot to talk about there.
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The year one and year two sign on bonuses.
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They're really not that complicated.
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Think of them for all intents and purposes
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as just additional salary
that you're receiving,
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additional cash, you receive
it with every paycheck.
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So if you were entitled to a
$60,000 a year-one sign on bonus,
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you're just gonna get $5,000 per paycheck.
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So think of it as additional cash.
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And then those restricted stock units
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you're gonna receive,
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you're gonna receive those
at the end of year one,
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the end of year two, and
then two and a half months in
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three, sorry, two and a half
years in, three years in,
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three and a half years
in and four years in.
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You're probably also receiving
additional shares as an
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Amazon employee over time.
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But those are the ways
in which you get paid and
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the timeline for what you get paid.
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Now, I think it's helpful
to actually put some
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numbers to this and look
at what this actually means
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and what do these percentage
breakdowns look like?
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Obviously, this is going to
vary a lot depending on whether
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you're a new hire coming in
at level four, or maybe you're
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a new hire coming in at
level six, or seven or eight.
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Obviously, these numbers are
going to be substantially
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different but important to at least
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think about the big picture here.
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So Amazon's maximum salary
that they're going to
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provide you at least in 2020 is $160,000.
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Now, if you come in
and your base salary is
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not $160,000, and you're
at a higher level,
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don't be surprised, because you might,
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they might start you at
essentially $150,000, $155,000.
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That gives the manager a little
bit of flexibility to give
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you a raise down the road,
rather than being capped out
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and them saying, "Well, hey,
sorry, we can't give you
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a raise because you are,
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you're already at the maximum salary."
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So it might be the case
that you come in at,
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let's just say $150,000.
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And then perhaps the next year
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you get bumped up to $155,000.
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And then the following year,
you get bumped up to, again,
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let's just say that $160,000 max.
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Maybe that's changed between now and then.
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But I think as an example sake it works.
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Then you're going to receive
these restricted stock units.
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And we're gonna assume in this example,
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that somebody is entitled
to $600,000 worth of
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restricted stock at their initial hire.
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Now the way that this gets paid out is
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at the end of the first year,
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you receive only 5% of that initial grant.
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So again, if you were entitled to $600,000
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you're only going to receive $30,000
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at the end of that first year.
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At the end of the second year,
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you're gonna receive 15%.
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So in this case, that would be $90,000.
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And then each six month time period,
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you're gonna be entitled to 20%.
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So, after six months, you're gonna get,
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again, assuming the stock
price hasn't changed
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$120,000, after another six months,
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so at the end of the third
year, another $120,000.
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At the end of six more months,
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this is three and a
half years in, $120,000.
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At the end of the fourth
year, another $120,000.
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So years three and year
four, in aggregate,
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you're gonna get 40%.
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And that's gonna add
up to in this scenario
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$240,000 of vesting grants.
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You'll notice now that there's
a pretty big difference
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between those first two years
and those second two years
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if we just take base salary
and grants into account.
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And that's why we see this
on hire bonus being awarded,
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essentially to make up that
difference to make up that gap
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in the first couple of years
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while you're an Amazon employee.
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Typically you're gonna see
that first on hire stock
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award that first year is
gonna be a bit bigger than the
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second year, again because
in that second year you have
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10% more of your stock vesting.
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And so you'll also notice that,
right off the bat, more of
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your Amazon compensation is fixed.
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So more of it's gonna be
based on just that base salary
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and that on hire stock award.
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And then the longer you're at
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Amazon, particularly in
year three, and year four,
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it's gonna be a lot more variable,
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and it's gonna be a lot more tied
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to the stock price of Amazon.
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So if Amazon does really, really well,
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then you're gonna be feeling really,
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really good about yourself,
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particularly in those
third and fourth years.
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And if Amazon stock price
doesn't do as well, well
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then you might see your total
compensation remain relatively
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flat or even if the stock price drops,
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you can actually see your
total compensation go down so
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you're highly incentivized to, you know,
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see the stock price of Amazon
go up, to say the least.
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If you have any questions,
please feel free to reach out.
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We work with a lot of Amazon employees,
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a lot of Microsoft employees,
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a lot of Pacific Northwest tech employees.
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If you're interested, feel
free to follow me on LinkedIn.
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I post a lot of information
about this and a lot of
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other information related to Amazon.
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Particularly, I know that
there's a lot of people who do
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this on their own. I feel, I'm
happy for you. That's great.
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If you're overwhelmed by
the sheer number of choices,
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this is just the tip of the
iceberg in terms of things
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that we do with Pacific
Northwest tech employees.
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One of the coolest benefits
that just now started with
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Amazon employees in 2020 is the
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Mega Backdoor Roth Conversion.
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Highly recommend that
you watch that video,
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if you haven't had a chance to already.
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It's just a incredible benefit now
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finally available to Amazon employees.
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Again, feel free to follow me on LinkedIn.
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If you have any questions,
please feel free
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to reach out, we're a resource.
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We wanna provide great
education for Amazon employees
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and do whatever we can to help you out.
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Hope that helps.
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We'll talk to you soon. Cheers.
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