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Amazon staff might get paid 50% less because shares have fallen so much

(fortune.com)
66 points colanderman | 3 comments | 21 Feb 23 23:29 UTC | HN request time: 0.609s | source
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WalterBright ◴[22 Feb 23 00:51 UTC] No.34889995[source]▶
In the various companies I worked for, my stock options were always underwater, if I recall correctly.

That's the risk with stock options.

I also know several Amazon millionaires who got that way via stock options.

That's the reward with stock options.

Remember when Boeing stock tanked after the 737MAX crisis? The employees complained that Boeing management still got their performance bonuses - because the shareholders demanded that those bonuses be based on multi-year returns, not just short-term previous quarter results. The employees complained that their quarterly bonus disappeared - because the union demanded it be based on the previous quarterly results.

1. be careful what you ask for

2. accept with grace when you get what you asked for

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anonuser123456 ◴[22 Feb 23 00:59 UTC] No.34890059[source]▶
Most FAANG comp is RSU, not options.
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adam_arthur ◴[22 Feb 23 01:23 UTC] No.34890256[source]▶
The distinction is not meaningful in this context. Both are deferred compensation that's subject to gaining/losing value along with the underlying company valuation
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1. anonuser123456 ◴[22 Feb 23 03:53 UTC] No.34891428[source]▶
The distinction is super meaningful in this context.

- RSU compensation is used to prevent wage stickiness. It lets a firm pay really high wages when times are good and claw back that comp when times are bad.

- Stock options are a way to bait the gullible into working for low wages. Options cost non-hypergrowth companies nothing. As such, it doesn’t stop them from getting over the tips of their skis via labor costs. There is nothing to claw back / reduce.

So when the economy hits a snag, RSU heavy companies have a built in cost moderator whereas options based companies have to layoff.

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2. adam_arthur ◴[22 Feb 23 05:24 UTC] No.34891962[source]▶
RSUs cost the issuing company nothing from a cash perspective too. They simply create the stock out of thin air, diluting existing shareholders, e.g. stock based compensation expense.

While no affect on cash on hand, it does negatively impact GAAP earnings.

3. hamster77 ◴[24 Feb 23 05:03 UTC] No.34921005[source]▶
Grating RSUs results in fixed accounting for companies - stock-based comp expense doesn’t fluctuate with stock price unless there are features that result in variable accounting instead (which most companies avoid)