Ask HN: FAANG employees, how are the recent stock declines impacting you?
The past decade has been very good for tech stocks, in particular for FAANGs where constantly rising prices bolstered generous compensation packages. Very strong stock performance has helped recruitment, morale, and retention in FAANGs.
However, now the RSU-heavy compensation policy is being tested, with Facebook and Netflix down over 33%, Amazon declining over 25%, and Google declining 20%.
For many employees, and especially engineers, these declines translate to severe compensation cuts.
What is the impact of these declines on you and your co-workers?
Is your employer responding in any way to the fact that your compensation is suffering deep cuts?
Are there any observed or expected impacts on recruiting, retention, and morale, particularly as RSU-heavy compensation packages lose some of the fairy-dust they carried for so long?
21 comments
[ 2.8 ms ] story [ 66.9 ms ] threadTo answer your question, simply switch FAANG's when the market is down so you enter at a low price. That's what I've seen so far...
The two FAANGs I have personal experience with aren't very flexible when it comes to base salary, though. In both cases, during offer negotiations, I was told the base salary is strictly tied to levels of seniority in the organizational hierarchy, so there's effectively no room for maneuvering there.
RSUs were much more flexible, especially after the first couple of years.
RSUs were also a more important part of the compensation. My initial package in one FAANG was about 55% RSUs, 45% cash, and I was told that going forward my RSU component will increase even further, and in particular most bonuses and raises will be granted in RSUs.
So I'm not sure "negotiating hard" is a viable strategy in FAANG compensation discussions. They can be quite generous with RSUs, but cash policy is often strict and inflexible.
(Your current grants are only "cheap" and valuable if you expect the stock price to not only bounce back, but also go higher in the foreseeable future.)
Since Amazon is currently trading at 1.5k, if I get granted 30k in stock, I get 20 shares instead of 15, which when the stock returns to it's correct price, will now be worth 40k. I make 10k, just due to the bounce.
Now this is impacted by a lot of specifics about how your are granted stock, options, or rsus, but that's the idea.
My comment was just to the effect that GP's comment implies that belief, i.e. that their employer's current stock price is undervalued (like how AMZN is currently trading for $1.5k but is actually worth $2k).
Had they believed the stock is currently fairly priced, there's no reason to call these RSUs "cheap" or expect much excess return on them at vesting.
Worst case scenario: if they're still overvalued, then further declines can be expected, and any grant denominated by RSUs is actually worth less than its nominal cash value.
This seems to be the implicit assumption in GP, for example.
However, there's no certainty that will be the case. The next few years could be a sustained bear market, in which stock prices appreciate very modestly.
And while I wouldn't worry about stocks "going to 0" at a big corporation like Amazon, it's certainly possible for the smaller tech companies.
If they go to 0, we probably have an immediate global crisis on our hands. We're not talking about hyped startups here, we're talking about mature, global organizations that have fueled society's growth for the past 2 decades.
I'm not relying on stock sales to fund general living expenses, rather the stock tends to be more about savings, since the base is pretty generous as well. So it's not really top of mind for me
It generally doesn't come up on our team tbh.
However, I am wondering about issues like morale, and especially recruiting and retention.
As you know, competition for talent is quite intense right now, especially for the kind of talent FAANG employees have. You see it both in attempts to recruit new and current employees.
I'm wondering if there's any increase in poaching, or tougher competition on new talent against employers offering more of a cash component.
Of course, some of these effects may only be apparent in a few months, once year-end bonuses are paid.
P/E ratios are too high, particularly for tech stocks, and the entire US equity market will eventually have to go through a bear market.
Netflix doesn't give stock so the stock price does not really effect them. All the rest will give you extra stocks if the stock price drops enough that it brings you below your target compensation.