The raises had to be approved though, right? It seems like an excuse to blame software for this. And it seems really off-putting that they wouldn’t just own the error, but instead try to revert it.
It looks like what happened is employees got a fixed number of RSUs. Their pay letter assigned a hypothetical value to those shares based on an incorrect stock price. So Amazon is probably not changing anything in the raise itself but rather correcting the hypothetical future value of the RSUs.
But from the employee side, RSUs are usually communicated (and reasoned about) in dollar amount, with the undersanding that one is getting a number of shares corresponding to that amount.
So even if it's an honest miscommunication, it's still a painful one.
Then that is a misunderstanding by the employee about how their compensation works. It’s little different than owning stock. I could say “I own $5000 in Amazon stock” but I still know it actually means I own $X shares while the dollar value is variable.
They have to write the latter because at the time of the offer letter the share price on the conversion date is not known. If you get hired on September 1st and the first board meeting after is September 19th, your RSUs will get converted to shares on September 19th at the September 19th price. If your offer letter is written August 1st, there is no way to include the correct number of shares.
>at the time of the offer letter the share price on the conversion date is not known
That's exactly why the notice should (and usually does) state both the RSU # and the present $ value while also indicating that it is the present value.
I think you’re assuming that it’s the value that’s variable, and not the units of stock. That already from the beginning the company has decided on how much stock to give in terms of units, not dollar value.
But the point that’s being made (as I understand it) is that certain companies, including Amazon, first decide on a dollar value, notify the employee of that value, and then later grant the commensurate number of stock units based on the price at that later time.
There are several events that happen with refreshers/bonus:
1) Notification period
2) Granting period
3) Vesting period
When the notification period happens, the manager doesn't say "You are getting X units of stock". The compensation system actually at this point has zero idea how many units of stock you are getting. Instead you get told "you are getting $x worth of stock".
Then there's the granting period, in which those unvested stock units are actually granted to you.
This is important because there's a lag time between the notification period and the granting period. If your boss tells you you are getting $10k worth of stock and the stock price is $100 per share at the notification period, but is $105 per share at the granting period, you are granted 95-ish stock units instead of 100, because the number of stock units granted was based on the Dollar amount they communicated to you.
Perhaps the communication process varies a bit then. The only situations I've ever encountered or heard of come in the form of "X units". E.g., After starting you might be assigned 1000 RSUs that vest in two years. At the two year point when you receive them you're given the $ value and often (not always) the company will automatically withhold the portion necessary to cover the taxes that will come due that year.
I've never heard of RSU grants that might vary with market price where the person did not know 1) That any $ amount quoted was based on the current market price of the stock; 2) The actual # of RSUs being granted; 3) That when they vested their value would be dependent on the stock value at that time.
I know sometimes grants are made in the fashion of "10% of your base salary". But whenever the grant value might vary with market price I'd be very surprised if the actual # of RSU's was not information available to the employees. Even if the company dropped the ball in a compensation notice & didn't explicitly state the # of RSU's, that is still information that would almost definitely be included within the employee's compensation section in the company's HR portal.
For example, my company unlocked annual amounts on August 15th and I was told I was getting $56k worth of stock. The stock was granted into my account on August 31st.
My stock at grant time was exactly Units * Price on August 31st = $56k. If I was granted stock when the annual amounts were announced (August 15th) the same number of stock would have been worth ~$62k
I've never seen them assigned a dollar value (actually, in one case: SpaceX, which also had a 5 year vesting schedule instead of a standard 4 year). That would defeat the purpose of RSUs.
In your compensation letter it may say a $ value but it’s just a formulaic presentation based on the fixed # of RSUs.
You’re not compensated by “You’re getting $20,000 in however many RSUs that can buy at the time”. It’s “you’re getting 100 RSUs” and then whenever you get them your compensation letter states their current $ value.
Given a certain dollar amount (e.g. X% of salary), the number of RSUs to grant is calculated by dividing the dollar amount by the market price of the stock. There are two common ways to calculate the market price of the stock, and the difference comes down to this:
1. The market price of the stock is determined at the time of the grant, and;
2. The market price of the stock is determined at the time the RSUs vest.
If there’s a one-time grant that is given immediately, the two values are usually going to be very close. But if the grant vests over some number of years (e.g. four year schedule, 25% vests after one year, remaining 75% vests monthly), the difference between the two methods can differ greatly.
When the price is determined at grant time, employees benefit from the stock rising, and are penalized if the stock falls. When the price is determined at vesting time, employees end up with the same compensation no matter what the stock does, they only benefit from appreciation if they hold the stock and it appreciates after vesting.
In your company, do the bonus RSUs have a vesting schedule? Or are they granted and distributed shortly thereafter?
> What is the point of giving stock priced on the vesting day? It has no chance to go up or down between the grant and vesting date when it is sellable. It would be the same as a cash bonus with an X year delay.
An excellent question, somewhat epitomized by the late Mitch Hedberg’s joke: “I think a gift certificate is a bad gift. You take money that is good everywhere…” Same here, it’s no better than cash, only it’s a PITA to convert it to cash if you want cash.
That being said, there are a few scenarios I have seen that fit the pattern:
1. Some companies have an ESPP program where some cash is deducted from each pay and placed in escrow. At regular intervals, the accumulated money is turned into shares at market value, and the employee receives the shares. There is usually a modest discount involved, e.g. 15%. If the employee sells the day the shares vest, they harvest 15% of the value less taxes. Or the employee can HODL, as they see fit.
Even without a discount, some employees may prefer an ESPP to making their own investments in the company stock. There is the convenience of having the money deducted at source, many people find that an easier way to save than relying on discipline.
2. The company is cash-poor and pays some comp in stock because they have shares in their treasury. One can understand why some companies would want to do this, without agreeing that employees would prefer this to cash.
I think RSUs are better than cash. In the UK I have a choice, take my bonus as cash and pay a hefty amount for of tax, or take the same pre tax amount as RSUs hold it for a minimum 5 years so that it’s tax free.
I don't think that's correct -- everything I can find online says that in the UK you pay income tax on RSU's no matter how long you hold them.
The only technicality is whether they're "subject to forfeiture" in which case you pay the tax after 5 years, or not, in which case you pay the tax upon vesting.
But no matter what you're always paying income tax. You may not be as aware of it though, since the company that grants you the RSU's will generally sell a portion of them in order to cover your taxes before you even receive them. (That is standard in the US too -- e.g. 50 units vest but only ~32 show up in your brokerage account.)
Not Amazon, but when I receive RSUs it is denominated in the dollar amount. In a year when the first part vests the dollars are converted to stock units based on the price at that moment. Thus I do not know how many units of stock I am receiving until the first vesting event, because I don't know what the price will be in a year.
That... is truly bizarre. I've literally never heard of that before.
The entire point of RSU's (or stock options) is that if the company increases in value over time, e.g. over your first year, so does the cash value of your RSU's. That employees benefit as the company benefits.
What you're describing is zero benefit at all. It's no different from just being granted cash that vests. It's such a strange and seemingly pointless thing to do, that I have to ask -- are you sure that's how it works? And if so, has someone from the company ever explained why they do that?
That sounds absolutely bizarre. Why do stock the first year at all? I have never heard of anyone trying that before.
edit: That setup is basically saying "you don't benefit from the increase in share value for the first year of employement", which is pretty employee-hostile. I bet a company that was doing this before stopped doing it this year, when their stock value fell by a lot. :)
I've not heard that either, but maybe they do it because it's cheaper? Stock reserved for RSU grants doesn't cost companies cash in the same way that a direct monetary bonus would.
RSUs are always granted as a number of shares. It's kind of the point of them, so the employee benefits from stock appreciation since their hire date.
However, in offer paperwork, it will sometimes be stated as a dollar value. This is for two reasons: the first is that RSUs need to be approved by the board at a meeting, which can happen some time after the hire date, at which time the dollar value is converted into shares.
But the main reason is that it makes it easier for the candidate to understand the value of the RSUs, and lets the company then talk about the total compensation and try to treat RSUs like cash in that discussion.
Since there are comments saying things like "I've never seen them based on dollar value":
My well known company has always granted stocks based on dollar value. Many employees incorrectly thought it was "number of shares", but if anyone actually asked the manager who decided how many shares they would get, the answer was always "We're given a dollar budget in shares to allocate amongst our reports - the system then converts that dollar amount into shares based on the stock price at the time."
So if our company has always done it this way, I suspect many others also do it this way.
Yes, a place I'm familiar with gives you a dollar amount. At RSU distribution time (i.e. when you actually receive them, not at offer-time), you will receive that dollar amount of shares, regardless of each share's value. TBH I'm not sure why they structure it this way (maybe fewer taxes than payroll? or looks better on a balance sheet, somehow?).
I think people in this thread might be talking past each other.
I get a manager could be told “you have $500k of 4 year grants to give out this year”. He tells an employee “you’re getting a $100k 4 year grant.” Stock is $100 today, so that’s 1,000 shares, or 250 per year.
A year passes. Stock goes to $50. Here’s my big question: Are they still getting 250 shares this year from that grant (now with a value of $12,500) or are they getting $25,000 which is now 500 shares?
The first one is what I mean by it being set in stock and it’s the only thing I’ve seen. I get that it was calculated in dollars at the beginning, for budgeting purposes.
Something in between is what I think Coinbase and Stripe are doing, which is 1 year grants. I think they’re still frozen to number of shares at the beginning of the year (even if it’s calculated in dollars).
I think some of the confusion is from somebody claiming they are granted RSU's based on dollar value, and then that dollar value is converted to shares at the 1-year vesting cliff. That is incredibly weird.
Offer letters having dollar values for the share grant at the time is normalish.
I've never seen a $$ amount associated with RSUs on the offer letter, only the number of stock awarded. The recruiter may tentatively tell you how much they're currently worth to give you an estimated total comp.
I had $x of RSUs offered at signing at FAANG-esque company. A month after joining you were allocated x RSUs at the given stock price at that moment for the offered $ amount.
Yep, this is how it worked for me as well for my initial grant. However, my understanding is that yearly refreshers are often done as a set number of units.
Apparently some people received additional cash now in lieu of RSUs because of the administrative delay involved with the latter (e.g., board approval). For them, the raise itself changed.
So it's likely that previous bonuses/raises were also based on 'old' stock prices. But since Amazon stock was (pretty much) always increasing, this means that those bonuses were consistently lower than what they should've been.
Of course it's only an issue now when the opposite is true, and is costing Amazon rather than the employees.
Ha ha, back in the late 90's, Apple took away profit sharing as soon as there was a profit. Specifically, I should say, Steve Jobs took away profit sharing.
I’ll make that argument: Steve Jobs doesn't deserve 100% of the credit for Apple's success.
I think that’s trivially true. AFAIK, it wasn’t him alone who put 100+ million iPhones in boxes every year, and without that, Apple’s success would have been smaller. He also didn’t do hardware design without help, and I’m fairly sure he didn’t write much of Apple’s software, etc. etc.
Even if you think all others involved were replaceable, many of them still contributed.
> But hey, maybe some $ will trickle down to the people who make the money for the company...
It doesn't trickle down. Some (most) people agree to work for someone in exchange for money, rather than go off and be CEOs and have people work for them.
When I was last there (albeit 6 years ago), following reviews managers determined what your new “total yearly comp” would be. Base pay was pretty low compared to industry, but RSUs were used to make up the difference based on the price on a certain date with a 4-year vesting period, distributed quarterly (16 distributions).
For example, if your total comp required 20k extra per year and the stock price was $100, you’d be granted 800 shares. If the stock price had fallen to $80, you’d be granted 1,000.
We always wanted the stock price to have a temporary low around review season because that would benefit our RSU grant.
Any dollar amount assigned to the grant on the given review date was understood to be based on the current stock price, subject to change, and as a way to communicate total comp. If the stock dropped over the course of the year, there was occasionally corrections, either in base pay or RSUs. This was also complicated by the fact that you could have up to four years of grants stacked on top of one another, all vesting on the same schedule. Obviously, that was taken into total comp calculations, so if you got lucky with a low price and big grant in the past four years, your yearly grant might end up low as a result.
> so if you got lucky with a low price and big grant in the past four years, your yearly grant might end up low as a result.
Yep, luck is only for the capitalists, not for the plebes. Shouldn't it be the case that if a worker was part of a major turnaround they should reap the rewards? Instead this would just make sure they didn't really benefit. If this were sr mgmt they would claim the increase should justify _extra_ comp as they did such a good job to make the stock go up.
Amazon should just own this mistake. They are already finding it incredibly hard to recruit and attract top talent. Perhaps the situation is slightly improved with the recent cooldown in the economy. I wonder how much this negative PR costs their recruiting efforts when compared to the cost of paying up the erroneous bonuses.
It’s a solid summary of the most commonly known complaints and confirmed condition, and the commenter’s opinion is clear.
If someone values working for a firm that doesn’t have a questionable relationship with their employees, the comment provides value. It’s up to the reader to determine if the good outweighs this list; or at least enough to work there.
Indeed. And being a cloud/systems engineer well versed in Azure -and- AWS, along with networks, DCops, FedRAMP, and more, I'm in the ideal target group to get hired in to Amazon and spend a few years there.
But I see how they treat their employees from lowest to highest. I don't want any part of that.
Amazon gets and deserves a lot of bad press, but to me it’s no different than any other huge company with lots of blue collar workers. Apple, google, meta, and many more tech companies manufacture hardware products in overseas factories with awful working conditions, but I don’t see people boycotting working for those companies nearly as often as Amazon.
The article is kinda useless without amounts… if I got a 4% raise and it got walked back to 2% I’d be pissed, but if I got a 40% raise, I’d expect it to have been a mistake.
I agree, but I'm assuming it's an amount that's big enough that Amazon cares enough to piss off every affected employee. If it was a 2.99% raise instead of 3%, they'd be better off just letting the employees have the money.
I'm also assuming that the proper amount is what the employee would have expected and been happy with if the mistake hadn't happened, which softens the blow considerably. So if they expected 5% and got 6%, going back to 5% is a morale-dampener, but not fatal.
OTOH, tech employees don't really need much excuse to change jobs any more, so literally any amount is a huge risk for your best employees.
Imagine if this wasn’t a bug, but a way to pull the wool over people’s eyes to walk back legitimate raises and stop the hemorrhaging from poor business choices.
Is there anything you can do in either scenario? It seem like one scenario invites legal scrutiny, whereas the other is just an an unfortunate accident, we’re so sorry about the bug…
I've never worked anywhere, where a change in my employer's stock price means my pay has to be recalculated.
If you're promoted and given a raise, isn't that a deal? Suppose I'm a happy coder on $X, and you promote me to the miserable job of Project Manager on $X+10, how's it legal to call me into the office and explain that it's actually $X+2?
Is compensation at Amazon stated in virtual shares or something?
They are paid a number of shares and given an estimate of the value of those shares based on some share price. Amazon used an old share price, so the estimate was too high. The only thing being recalculated is the estimate. The number of shares does not change.
1. First, I'm a bit baffled by some of the responses along the lines of "Amazon should just own their mistake". Sorry, but in the real world, "finders keepers" rarely applies (unless you're talking about crypto, but I digress...). I would certainly want a bug corrected if it were in my favor, and if a bug went the other way, I might need to re-evaluate my company satisfaction based on my new comp, but I have literally never seen a case of "sorry, payroll system made an error, but never mind you can keep it". It literally never works like that in any case, e.g. I work in fintech and if a bank accidentally deposits money into your account and you spend it, you can go to jail [1] - the bank doesn't say "whoops, our bad".
2. Many people who joined the workforce after the Great Recession have never had to deal with falling stock prices, and basically have just come to expect that the equity portion of their compensation should be like cash. The whole point of equity compensation is for it to be variable based on the success of the company. I get it, I wouldn't be happy with my compensation falling either (and I've certainly been there, in the .com bust), but I don't have much sympathy for folks who are just discovering that the variable component of their compensation can, in fact, be variable in the negative.
There is a huge precedent for companies not paying for compensation calculation mistakes, which is also supported by law (in the UK at least where I am from - but assume it would be the same in the US).
Amazing how many comments in this thread are acting like this standard practice is a completely new thing with zero precedence.
You'd be surprised how many people follow the adage: "what is right is not always popular, and what is popular is not always right."
In this case, a verified compensation item given to an employee should be respected on principle, as this isn't a one-time "whoops we overpaid you," it's a months-long process that affected many people. AMZ should write it off as a bonus and move on.
There’s a difference between variable and a new hire at my current level would get literally double my current comp as a person at the company for five years
a new hire at my current level would get literally double my current comp as a person at the company for five years
That's not unusual. Well, 2x salary might be, but it's well established that job hopping is the only way to guarantee your salary stays close to market.
To add a data point to this, I recently interviewed at a large tech company. As part of investigating the comp, I ran a linear regression on data from levels and the results indicated that you should deduct a few grand for every year of tenure.
Worth considering the biased data. Levels will only have data from job seekers- which would imply that they either have A) recent offer or B) salaries from employees who are considering jumping ship (biased towards employees who are underperforming or in underperforming business units)
There is probably a missing category of employees who have been successful, gotten raises, and aren't shopping for jobs
One reason it’s not obvious is that several findings of my analysis aligned neatly with things the recruiter told me about the company’s comp structure.
I know there is bias in who enters data on levels, but is there something else that makes it garbage data? Can you elaborate? Because I have never seen it as 'garbage data' and would like to know more.
I wish it were easier to compare that against other considerations. Comp isn't everything (though not judging those for whom it is) and it can be challenging to weigh the benefits of being somewhere for multiple years. Especially for places with steep learning curves and very large orgs where getting established is a very different day to day type of stress than continuing on and growing in something familiar.
Right, like the company raised bands for new hires but didn’t raise current employees commensurately, that is in line with needing to job hop, and tracks with the other comment of a couple thousand. But the difference in pay now is so drastic now basically everyone with 1+ years is looking or left
i know thats the common refrain, im sure its true most of the time, but aside from this last year or so ive gotten more increases from promos/equity than from job hopping(which have mostly been flat)
The article is slightly vague, but my takeaway is that employee got raises. Those numbers went through a bunch of people. The pay went out for months. Then, they realized they miscalculated the raises. “Whoops, we didn’t mean to offer you $150k, but really $140k.”
1. I think they have no chance at getting back the pay from before. This isn’t a banking error, this is regret. As an employee could you be like, “whoops I messed up my budget. I wouldn’t have taken this job at $150k. Please backpay me to bring it up to $180k”.
2. It’s well studied that losses hurt more than gains feel good. People hate having their comp lowered and the stock has already fallen. May be better to leave the comp where it’s at. I mean, it’s not like it was 10x or something. The numbers were reasonable enough for this to be super wide spread and people to not notice for months.
From what I've heard, this timeline is incorrect. People with approved Q3 promotions received Personal Compensation Statements (PCS) telling them that they would get a raise starting in October. They were never actually paid the increased amount, and the time between erroneous PCS and correction was on the order of days, not months. Some folks didn't even get their erroneous PCS because their manager was slow to share it.
Regarding 1, I have seen this happen. I used to work for a govt agency that made a mistake and overpaid a number of employees, who were allowed to keep the extra payment. I'm not saying that's the norm, but it affected a number of people and I have heard of it happening other times as well.
The web is littered with people telling their stories of getting overpaid in comp, frequently around bonuses, and having the company ask for their money back. They're always disappointed to find out that they do, legally, owe the company the extra pay back. Good companies will work with the employees on this. Other's can be a bit shitty about it.
Practically, clawing back overpaid compensation from an uncooperative former employee requires a lawsuit with a chance of the employee winning, and has the potential to be more expensive anyway than however much could be recovered.
But, continued employment is easily dependent on recovering the overpayment one way or another. Usually by taking it out of future paychecks.
When I was in gradschool, this happened to me all the time. I had the university ask for a couple hundred dollars back probably 6 times in 5 years. Whoever ran their payroll must have been woefully incompetent.
When I was 20 something, I had an extra zero added to a severance payment. I randomly called some law firm asking if I should just keep that. The lawyer dude plunged his arm into the telephone line and slapped me silly.
I wonder if you'd be safe just sticking it in a savings account until they asked for it back. I mean, is it your responsibility to point out their mistake? And after how much time might they lose their right to demand it back?
The general consensus seems to be either leave it in the checking account until it is pulled back (and it almost always will be unless the amount is "small or reasonable" and therefor not caught in an audit) or directly contact the company immediately.
Moving it to a savings account is tricky because the automatic clawback will pull from whatever account it was sent into.
Once the company issues a W2 or 1099 the next year that covers it, I would consider it relatively safe to keep.
There's a third option for when the sum is really huge, like more money than you'll ever see in your life: find a good lawyer who can arrange transferring the money into some kind of trust fund, perhaps in a different country, that benefits your children, then wait for the knock on the door, expect to go to prison for a bit, but your children may be allowed to keep the money, and they might support you when you come out of jail. I think I read about a woman in New York successfully doing something like that with an accidental transfer from the United Nations, though I might be misremembering.
If it's a company or other body at that point you're trying to figure out what will let them settle their books - perhaps prison time for you will do so.
But other groups I'd be a bit more worried about them being willing to go to extra-judicial means to if not get the money back, at least get "revenge".
> Sorry, but in the real world, "finders keepers" rarely applies
If Bob signs a contract for Alice to paint a fence for $800 and a copy-paste error transfers her $1000 instead, yes.
But if the copy-paste error happened before the contract was signed? Leading to Bob promising Alice $1000 and signing a contract promising it? Then in all probability, Bob will end up paying the contract amount.
Compensation for at-will employees does not constitute a contract. That's what "at-will" means, basically. In the breakdown of good faith interaction, the remedy (for both sides) is largely limited to the ability to walk away.
But yes: if these were contractors Amazon had hired it would be very different.
This is nonsense, possibly triggered by a misunderstanding of what the word "contract" denotes.
An at-will employee and their employer contract that for each hour of work (or each ~week salaried) performed by employee on instructions from employer, employer will pay to employee $X.
Just because such a contract doesn't contain any term indicating the length of time an employee will work doesn't make it less of a contract.
As further evidence, if at-will employment were not a contractual agreement there'd be no recourse for the employee to recover unpaid wages. And yet unpaid wages are recoverable.
That's getting needless sticky about definitions, and harming understanding of the point, potentially leading people to think that these Amazon workers are going to get their raises, which they clearly won't.
Let me be more concrete: am employer presenting you with a plan for future compensation[1] in an existing employment relationship does not constitute a contract. They can pay you what they want to pay you.
[1] Your back wages argument doesn't apply here. These people never got paid at all.
None of which has anything to do with at-will employment. Since you do appear to have a good understanding of the situation, this leads me to the only possible conclusion that you were deliberately spreading disinformation about at will employment for some purpose.
So frustrating to see this interpretation repeated here. No, that's not correct, because it if were correct these Amazon folks would have an open and shut case to keep their raises, and they don't. That's not the way compensation works. It might be the way one side or the other wants it to work in some situation, but it's not. You get paid what your employer offers. Your employer gets to keep the employees that want to stay. Period.
Work done for contract is a real thing, it's just not applicable here. When you hire a plumber or a caterer or a security consultancy, you write up a contract ahead of time describing exactly the work to be done and the bill to be paid, and then get the courts to enforce that when needed. That is simply not the way that salaried employment works in the USA. It's not.
You’re wrong. “Work for contract” is irrelevant to there being contracts used for salaried jobs. There was a contract involved, but it sounds like it was covering the period starting in October - so Amazon just has to cancel it and say “actually this is how much we will be paying you” and employees have the same option to reject the new contract terms as they do the existing contract: quitting before the new terms become active.
No, no, no. That's not a "contract", it's just a document. Go google "seven elements of a contract" (the basic definition in common law) and note that at-will employment simply lacks several (the big one being "certainty"). In particular a "contract" that says "you can do whatever" is clearly not a contract under common law.
Now, sure, it's true that some elements of an employment agreement may constitute contracts and may have been enforced by courts. Back wages are a big one, obviously. Likewise promised benefits being denied, etc... But at-will compensation and termination just don't qualify. They don't. The Amazon workers can't sue for their mistake raises under contract law becuase those raises don't constitute contracts. Period.
> I'm pretty sure if you do work, as contractually agreed, the contract requires you be paid for that work.
Yes it does (and I even said so in the comment you replied to), but compensation plans, raises, offer letters, etc... are not payment for work done, and are not contracts for work for the reason stated. These Amazon folks aren't getting a penny, and it absolutely stuns me that people want to argue otherwise.
They get paid for the previous work they have done (two weeks, half month, one month, depending on pay period).
That’s theirs.
But going forward, they don’t have any right to any level of pay above minimum wage.
I’ve personally dealt with this. I had an employer run out of money and be acquired by a new company. The new company owes paychecks for last pay period, but wants to pay everyone lower salaries.
Going forward the new company could pay whatever (above minimum wage). But they owned all the debts of the previous company including that last months wage.
We only had at will hiring agreements, but that didnt matter.
>note that at-will employment simply lacks several (the big one being "certainty"). In particular a "contract" that says "you can do whatever" is clearly not a contract under common law.
Which was in reply to a comment about every job having a contract.
Further your other examples could be contractually enforced.
If you accepted an employment contract based on the compensation plan, that forms part of the contract. Raises are updates to the contract, unless you're saying it's potentially ok to claw back 40 years of pay raises when some one retires.
Offer letters are probably more questionable but if there's a specific start date and pay has already been discussed, it seems to me that that would form a contract.
The key thing in this particular situation seems to be that there was an error, and the error was rectified quickly.
Contracts include unbounded variables all the time.
Banks offer accounts with “whatever we feel like” interest rates. Bonds can have “whatever we feel like” interest rates. Stocks can have “whatever we feel like” dividends. Short term rentals have “whatever we feel like” rental prices.
In practice, the payer offers a very short term guarantee: “for the next pay period, you will get $50 an hour”, but after that pay period they change it.
There are contracts behind all these things.
One party offers something on a continuous basis: labor, money, etc. The other party walks away when they don’t like what they’re getting.
This area of law is usually a bit more nuanced than "what you wrote is the contract". If both parties thought the contract said $800 when it was signed (and if that could be proven...) then that might well be enough for a court to either read the contract as if it said $800, or to void it entirely.
To save all the bickering here, the final answer is that the corporation always wins. No matter what the mistake.
Let the lawyers get together and do a retroactive class-action lawsuit to solve it. But Amazon will do whatever it wants until that suit comes through.
Actually the most apt comparison here is if Bob sends over a contract for $1000, but then goes "oh no I'm sorry, I really meant $800"
There are not takebacks here.
Actually, I know there legally could be, as these situations aren't always black and white, however the company, being such a position of power compared to the employee, loses all goodwill in this situation. If I were in this situation, I would already be sending out feelers.
>basically have just come to expect that the equity portion of their compensation should be like cash.
Not just like cash. Like cash that may be worth 50% or more money by the time it vests.
Hopefully, it won't get that bad for large public companies but there are probably people out there today who are banking on their total comp being $400K (and making decisions on that basis) when it's actually more like $200K or less.
I’m out of the loop here and too lazy to check, but let’s say those people were to apply for a mortgage, would the bank only look at the “fixed” part of their income when considering one’s application? Or it will also look at the “variable” part? (i.e. the part of the comp that will vest at some point in the future). If the answer to this last question is “yes”, how does the bank “compute” that future/expected income?
Normally, they will look at two years of stable(typically W2) income (Salary + RSUs) from one company before they make decisions. However, in bay area, some mortgage lenders have started excusing people who jump companies, because, well jumping companies in bay area is common. They now have to tweak their models.
This depends, if we sign a contract saying saying compensation is £X, i cant later lower your compensatuon claiming I made a mostake. It would be my responsebility to check befire signing.
Why all these hypotheticals that aren't relevant? That (signing of a binding contract where work was done and then the employer reneged on payment) manifestly did not happen in this case.
The proof is if, due to a bug, a person was undercompensated or money disappeared from their bank account, the person would absolutely expect to be made whole.
BTW, I've had stock options that were never above water.
> I work in fintech and if a bank accidentally deposits money into your account and you spend it, you can go to jail
So do I, and it depends. There was a whole case recently where chase (iirc) accidentally sent tens/hundreds of millions of dollars to a lender, and the lender chose to interpret it is an early loan repayment, and was allowed by the courts to keep the money.
> the lender chose to interpret it is an early loan repayment, and was allowed by the courts to keep the money.
No. The appeals court smacked them silly in a unanimous opinion and the money was returned to Citi [1]. From the appellate judge:
> In a separate opinion, Circuit Judge Michael Park called the lawsuit a “straightforward case that many smart people have grossly overcomplicated and that we should have decided many months ago.”
> “Put simply, you don’t get to keep money sent to you by mistake unless you’re entitled to it anyway,” Park wrote
Your second item is so unbelievably on point, it hurts. The failure of so many to look at even a cursory sense of history would know that this industry has always had volatility baked in, and that affects not only "disruption" of business verticals, but disruption of vesting cycles :)
Amazon recently added “being the best place to work” as one of their core values.
If the “best place to work” made an error like this, they would figure out a way to let the employee keep it.
Most places wouldn’t. But if I was in charge of a FAANG, an error like this happened, and I was committed to making the FAANG the “best place to work”, I’d cough up the change.
Does Amazon want to be the best place to work, or not?
I'd say, Banque Worms ruling as we've found out can always be at play. Cough $900,000,000.00 accidentally transferred a couple years ago from a large bank to lenders.
Didn't something similar happen at Intel recently? IIRC in their case they are cutting in other areas to make up for the "excess" raises and telling folks not to expect raises for a period of time.
None of this surprises me. I was at that company for over 10 years. Quitting was the best thing I did for myself, and I should have left long ago.
Amazon’s real innovation isn’t a cloud service company or a logistics business. The innovation is on how to squeeze every once of labor and value out of a human being, and how to do this legally, without damaging customers’ or public opinion of the company, at massive scale.
As a leader, I was coached on how to motivate my employees by selling promotions as a carrot, even though my leadership had no interest in seeing through that person gets promoted. It was lies and gaslighting.
I was coached on detaching myself from employees and their well being, so it would make it easier to do the right thing for the company.
I was pressured to get onto specific managers who weren’t meeting their attrition targets.
The idea that amazon would walk back compensation targets is no surprise to me.
Have you worked in any big company afterward (or before) that was not toxic? The reason of my question: I work in a very big company, and I found it very toxic. I wonder if all big companies are the same.
I need to know if I would switch. But I do not want to go to smaller company.
One of the most toxic things of the company, is the possibility of being sued for virtually anything. So I prefer not even name them. It is a automotive supplier in the EU.
I prefer small start-ups to big companies but I have worked at a fair number of the latter. I enjoyed my time at Microsoft, Intel, Sun Microsystems, and Epson. I did not care much for Novell, Corel, Amazon, Rakuten, and WordPerfect.
If a company is going to give some employees a bad taste in their mouth, I would think the very last group to do that to would be those recently promoted. Those are people that just got the seal of approval from Amazon and are in the best position to jump to another company.
Honestly, I started Amazon with some kick ass managers and a great leadership team. However, that changed after a year or two and I ended up with some of the shittiest leaders I've had in the industry. I couldn't bail quick enough.
Any article about Amazon is guaranteed to inspire a grave post like this from a former employee. And as a former employee, I agree with the sentiment in nearly all of them.
>Amazon’s real innovation isn’t a cloud service company or a logistics business. The innovation is on how to squeeze every once of labor and value out of a human being, and how to do this legally, without damaging customers’ or public opinion of the company, at massive scale.
I think this is bang on. Their hiring process for engineers every single time I've been contacted by them is an immediate (before you could possibly have a clue if you want the job or not) is a tech challenge.
It's industrialized hiring that puts 100% of the burden immediately on the candidate at virtually no cost to amazon.
This is a huge red flag and I halt the process with any employer that uses it.
Resigned some time back. After joining I realized what a sh*thole I fell into and decided to brave it out for some time to get the FAANG stamp. I usually journal interesting work instances and my thoughts on them. Here are some from Amazon:
1. Teammates are out for blood. They go out of the way to ruin their teammates metrics. So much so that manager has to intervene because overall team metrics are declining due to this. Additionally, the metrics tracked are insanely stupid such as no of comments, revisions on a PR. This makes sure no healthy discussion/debate can happen on a piece of code.
2. Manager asks to crunch for no apparent reason. The problem with greedy and selfish managers is that everything looks critical to them. They only want to appease the upper management without any thought to people who will actually work with the deadlines.
3. People expect u to sacrifice weekends for "learning" internal tools. They quote everything as "learning experience".
4. Hell is an agile sprint system that has been optimized to require 10 hour days. We were required to estimate tasks for up to minutes and even then manager questions and pushes to reduce timelines.
5. Some great words from my manager - " Leaders never sit quiet. If u hv nothing to say, then speak anything or just say i agree". One guy follows this religiously. Another say - "Work on ownership aspect. If the guy reviewing ur work is not approving, its ur problem." I really wanted to quit right after this line.
6. If someone gives low Connections score, the whole team is reprimanded and huge "discussions" of pointing fingers happens.
7. All senior engineers and management give different advice on paper and verbally. This is because if the actions succeeds, they'll be lauded for "good management" and on failure, they can point towards their messages of concerns. They've mastered the politics of "gather all credit, divert all blame".
8. Deadlines are very top down where management promises castle in the sky and then asks the people below to achieve it no matter what. We've designed a whole cluster of services in a few hours and got some rubber stamp approvals as well. Most folks then get promoted and jump onto other greenfield projects not dealing with the aftermath.
9. People here are insanely subservient and those who aren't are generally kicked or they themselves jump to other teams.
These are very contrarion to my previous jobs where most points were very normal stuff between coworkers.
It sounds like you had a bad manager and possibly team, and you made the right decision for yourself. I'd like to offer a few counterpoints from having landed on what I consider to be a good team/manager.
The first point is that things are manager and team dependent. Amazon is a lot more hierarchical than other companies when it comes to SDE levels, so I'd assume this also happens with managerial levels. There's probably a leadership disconnect that allows bad managers to thrive, but this is not a company-wide issue.
> Teammates are out for blood [...] metrics tracked are insanely stupid such as no of comments, revisions on a PR
I do agree with this to an extent. Some people at Amazon are more cut-throat and it can get annoying when you have to deal with them if you don't like playing those games. The metrics you're talking about are a mechanism for identifying outliers and are merely a data point; they aren't used to judge performance by themselves. I.e. if the rest of your team sends out 100 PRs a year on average but you sent out only 20, all it means is that it should be taken into account why your work style or output is different. If you've added 10 comments in the past year but your teammates have added 100 on average, that's also an indication that maybe you aren't pulling your weight in reviews. Managers don't have infinite time so they should be using these metrics as an indication of when to look into the details. Blindly using these metrics to evaluate performance is the sign of a bad manager. I'm sure there are bad managers, and people also try to game the system.
> Manager asks to crunch for no apparent reason
Could be the sign of a new manager (hasn't learned to say no to their leadership chain yet), or a bad manager. There are hard deadlines and soft deadlines, though even the hard deadlines can be softened up. Always pushing to meet every single deadline will lead to burnout and terrible output/operations in the long run. Prioritization is important, and that includes your team's mental health.
> People expect u to sacrifice weekends for "learning" internal tools
I won't lie, I definitely worked a lot my first year. There's a large ecosystem of internal tools, systems, and processes, and there's no other way to keep up unless you have prior experience or have someone helping you. The thing is that after about a year, I stopped having to do this. In the past year I haven't worked weekends or late into the night, except for a few operations-related high-severity issues (which is part of being on-call). My first year I definitely pulled 70 hour weeks on average, but I learned how to be self-sufficient. Now I pull 30 hour weeks, and I spend a lot of my time helping other developers on the team.
> Hell is an agile sprint system that has been optimized to require 10 hour days
Completely team dependent, we don't do any estimation for example and our sprints are more kanban.
> Leaders never sit quiet. If u hv nothing to say, then speak anything or just say i agree
We have some people on our team (newer hires in the past 1-2 years) that do not provide any feedback during design reviews or most meetings. Forcing people to say anything is a mechanism to get them to start talking so they get comfortable with providing feedback even when they aren't confident, so it builds up their confidence. Part of the issue here is the virtual environment, as it's a lot easier to get people contributing in person.
> If the guy reviewing ur work is not approving, its ur problem
This ownership aspect is definitely true and it's something that took me a while to get used to. There's no skating by on "I'm blocked by person X or thing Y". You have to figure it out, even if that means pinging them or their team or escalating to their manager (through yours). Typically you try to follow the reviewal process, make your PRs as good as possible, etc fi...
Amazon has enough cash on hand to just own this "mistake" and pay the raises. Just baffling that a multitrillion dollar company can get away with this. Just pay people their worth! I don't care if this makes Jeff's net worth drop by .0001%, he can go dry his tears with his hundreds of billions.
I had this happen at a different FAANG. I was sent a letter with a 25% raise when I got promoted. I then had a meeting with my assigned HR person & manager suddenly added to my calendar where they told me that I was actually getting a 6% raise.
It was still competitive with market rates, so shit happens. Sucks to be on the bad side of this.
My first job. The pay roll guy was absolutely useless.
once I had done 30+ hours and been paid <£30 and both these figures were on the payslip (in the 00s).
Anyway once they paid us all twice, and sent us all a letter with the payslip basically saying we wouldn't be paid the next week. The one time they actually caught their own error.
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[ 3.0 ms ] story [ 206 ms ] threadpeople work in banks and sometimes people make mistakes.
So even if it's an honest miscommunication, it's still a painful one.
"Salary: $180k. RSUs: $80k (100 shares)"
VS
"Salary: $180k. RSUs: $80k"
With the former, I can easily spot check the share price and make sure it's correct. With the latter, I cannot, and take it at face value.
That's exactly why the notice should (and usually does) state both the RSU # and the present $ value while also indicating that it is the present value.
But the point that’s being made (as I understand it) is that certain companies, including Amazon, first decide on a dollar value, notify the employee of that value, and then later grant the commensurate number of stock units based on the price at that later time.
There are several events that happen with refreshers/bonus:
1) Notification period 2) Granting period 3) Vesting period
When the notification period happens, the manager doesn't say "You are getting X units of stock". The compensation system actually at this point has zero idea how many units of stock you are getting. Instead you get told "you are getting $x worth of stock".
Then there's the granting period, in which those unvested stock units are actually granted to you.
This is important because there's a lag time between the notification period and the granting period. If your boss tells you you are getting $10k worth of stock and the stock price is $100 per share at the notification period, but is $105 per share at the granting period, you are granted 95-ish stock units instead of 100, because the number of stock units granted was based on the Dollar amount they communicated to you.
I've never heard of RSU grants that might vary with market price where the person did not know 1) That any $ amount quoted was based on the current market price of the stock; 2) The actual # of RSUs being granted; 3) That when they vested their value would be dependent on the stock value at that time.
I know sometimes grants are made in the fashion of "10% of your base salary". But whenever the grant value might vary with market price I'd be very surprised if the actual # of RSU's was not information available to the employees. Even if the company dropped the ball in a compensation notice & didn't explicitly state the # of RSU's, that is still information that would almost definitely be included within the employee's compensation section in the company's HR portal.
For example, my company unlocked annual amounts on August 15th and I was told I was getting $56k worth of stock. The stock was granted into my account on August 31st.
My stock at grant time was exactly Units * Price on August 31st = $56k. If I was granted stock when the annual amounts were announced (August 15th) the same number of stock would have been worth ~$62k
If you get 100k USD worth of RSUs on start date, and the stock value goes up 10X you still have a lot of skin in the game.
If the stock goes up 10x in 4 years, then your grant on year 4 is still 100k, not 10x that.
You’re not compensated by “You’re getting $20,000 in however many RSUs that can buy at the time”. It’s “you’re getting 100 RSUs” and then whenever you get them your compensation letter states their current $ value.
In my company this is exactly how it works.
Bonus is X% of salary and the exact number of RSUs and SARs is floating until the time they are granted.
Everyone hopes the market has a bad day when the bonus is granted.
I assumed this is how it works at all large companies.
1. The market price of the stock is determined at the time of the grant, and; 2. The market price of the stock is determined at the time the RSUs vest.
If there’s a one-time grant that is given immediately, the two values are usually going to be very close. But if the grant vests over some number of years (e.g. four year schedule, 25% vests after one year, remaining 75% vests monthly), the difference between the two methods can differ greatly.
When the price is determined at grant time, employees benefit from the stock rising, and are penalized if the stock falls. When the price is determined at vesting time, employees end up with the same compensation no matter what the stock does, they only benefit from appreciation if they hold the stock and it appreciates after vesting.
In your company, do the bonus RSUs have a vesting schedule? Or are they granted and distributed shortly thereafter?
1) Find out RSU bonus value: "you get 20% of your salary worth of RSUs"
2) Grant Date: Company Calculates the number of RSUs, issues them, and starts Vesting schedule.
3) Vesting days: Some of the RSUs become vested and can be sold by the employee.
>The market price of the stock is determined at the time the RSUs vest.
What is the point of giving stock priced on the vesting day? It has no chance to go up or down between the grant and vesting date when it is sellable.
It would be the same as a cash bonus with an X year delay.
An excellent question, somewhat epitomized by the late Mitch Hedberg’s joke: “I think a gift certificate is a bad gift. You take money that is good everywhere…” Same here, it’s no better than cash, only it’s a PITA to convert it to cash if you want cash.
That being said, there are a few scenarios I have seen that fit the pattern:
1. Some companies have an ESPP program where some cash is deducted from each pay and placed in escrow. At regular intervals, the accumulated money is turned into shares at market value, and the employee receives the shares. There is usually a modest discount involved, e.g. 15%. If the employee sells the day the shares vest, they harvest 15% of the value less taxes. Or the employee can HODL, as they see fit.
Even without a discount, some employees may prefer an ESPP to making their own investments in the company stock. There is the convenience of having the money deducted at source, many people find that an easier way to save than relying on discipline.
2. The company is cash-poor and pays some comp in stock because they have shares in their treasury. One can understand why some companies would want to do this, without agreeing that employees would prefer this to cash.
The only technicality is whether they're "subject to forfeiture" in which case you pay the tax after 5 years, or not, in which case you pay the tax upon vesting.
But no matter what you're always paying income tax. You may not be as aware of it though, since the company that grants you the RSU's will generally sell a portion of them in order to cover your taxes before you even receive them. (That is standard in the US too -- e.g. 50 units vest but only ~32 show up in your brokerage account.)
I think the advantage for company is somewhat better predictability?
The entire point of RSU's (or stock options) is that if the company increases in value over time, e.g. over your first year, so does the cash value of your RSU's. That employees benefit as the company benefits.
What you're describing is zero benefit at all. It's no different from just being granted cash that vests. It's such a strange and seemingly pointless thing to do, that I have to ask -- are you sure that's how it works? And if so, has someone from the company ever explained why they do that?
edit: That setup is basically saying "you don't benefit from the increase in share value for the first year of employement", which is pretty employee-hostile. I bet a company that was doing this before stopped doing it this year, when their stock value fell by a lot. :)
However, in offer paperwork, it will sometimes be stated as a dollar value. This is for two reasons: the first is that RSUs need to be approved by the board at a meeting, which can happen some time after the hire date, at which time the dollar value is converted into shares.
But the main reason is that it makes it easier for the candidate to understand the value of the RSUs, and lets the company then talk about the total compensation and try to treat RSUs like cash in that discussion.
My well known company has always granted stocks based on dollar value. Many employees incorrectly thought it was "number of shares", but if anyone actually asked the manager who decided how many shares they would get, the answer was always "We're given a dollar budget in shares to allocate amongst our reports - the system then converts that dollar amount into shares based on the stock price at the time."
So if our company has always done it this way, I suspect many others also do it this way.
I get a manager could be told “you have $500k of 4 year grants to give out this year”. He tells an employee “you’re getting a $100k 4 year grant.” Stock is $100 today, so that’s 1,000 shares, or 250 per year.
A year passes. Stock goes to $50. Here’s my big question: Are they still getting 250 shares this year from that grant (now with a value of $12,500) or are they getting $25,000 which is now 500 shares?
The first one is what I mean by it being set in stock and it’s the only thing I’ve seen. I get that it was calculated in dollars at the beginning, for budgeting purposes.
Something in between is what I think Coinbase and Stripe are doing, which is 1 year grants. I think they’re still frozen to number of shares at the beginning of the year (even if it’s calculated in dollars).
Offer letters having dollar values for the share grant at the time is normalish.
Of course it's only an issue now when the opposite is true, and is costing Amazon rather than the employees.
Many people enable punitive & regressive decisions like that.
Things go bad? Ship is too big to steer, the failure is on the whole company, the CEO didn't even know, they swear!
Things go right? Obviously it was all the hard work of the CEO they definitely deserve millions in bonuses!
It was Steve Jobs, so was the wage-fixing. They were all so stupid about it they literally got busted doing it.
Doesn't matter what the company makes, only the C-Suite will reap the rewards.
But hey, maybe some $ will trickle down to the people who make the money for the company...
I think that’s trivially true. AFAIK, it wasn’t him alone who put 100+ million iPhones in boxes every year, and without that, Apple’s success would have been smaller. He also didn’t do hardware design without help, and I’m fairly sure he didn’t write much of Apple’s software, etc. etc.
Even if you think all others involved were replaceable, many of them still contributed.
It doesn't trickle down. Some (most) people agree to work for someone in exchange for money, rather than go off and be CEOs and have people work for them.
For example, if your total comp required 20k extra per year and the stock price was $100, you’d be granted 800 shares. If the stock price had fallen to $80, you’d be granted 1,000.
We always wanted the stock price to have a temporary low around review season because that would benefit our RSU grant.
Any dollar amount assigned to the grant on the given review date was understood to be based on the current stock price, subject to change, and as a way to communicate total comp. If the stock dropped over the course of the year, there was occasionally corrections, either in base pay or RSUs. This was also complicated by the fact that you could have up to four years of grants stacked on top of one another, all vesting on the same schedule. Obviously, that was taken into total comp calculations, so if you got lucky with a low price and big grant in the past four years, your yearly grant might end up low as a result.
What a perverse incentive. I would love to know if any high-profile outages are clustered around those dates.
Yep, luck is only for the capitalists, not for the plebes. Shouldn't it be the case that if a worker was part of a major turnaround they should reap the rewards? Instead this would just make sure they didn't really benefit. If this were sr mgmt they would claim the increase should justify _extra_ comp as they did such a good job to make the stock go up.
If someone values working for a firm that doesn’t have a questionable relationship with their employees, the comment provides value. It’s up to the reader to determine if the good outweighs this list; or at least enough to work there.
But I see how they treat their employees from lowest to highest. I don't want any part of that.
I'm also assuming that the proper amount is what the employee would have expected and been happy with if the mistake hadn't happened, which softens the blow considerably. So if they expected 5% and got 6%, going back to 5% is a morale-dampener, but not fatal.
OTOH, tech employees don't really need much excuse to change jobs any more, so literally any amount is a huge risk for your best employees.
Is there anything you can do in either scenario? It seem like one scenario invites legal scrutiny, whereas the other is just an an unfortunate accident, we’re so sorry about the bug…
Amazon has been and continues making money hand over fist. At this stage Amazon is a money minting machine, at a scale like we've not seen before.
"Don't attribute to malice that which can be explained by stupidity or incompetence."
This headline reads as though it came straight out of a newspaper in SimCity 2000.
https://66.media.tumblr.com/b102240b1a68b839c4c38b883f85e437...
Sometimes reality is stranger than fiction, or enmeshes uncannily with it.
Related references:
SimCity 2000 Newspapers ProcGen detailed inspection: https://procedural-generation.tumblr.com/post/134086657418/s...
Thread from Sep 2019 about the SimCity2K in-game article generator (first search result for "sc2k newspaper": https://news.ycombinator.com/item?id=20971526
Edit: SimCity2K ProcGen deserves it's own submission, no? https://news.ycombinator.com/item?id=32984133
Stock price changing in a direction that costs Amazon money? Nope, nuh-uh, not a chance.
I've never worked anywhere, where a change in my employer's stock price means my pay has to be recalculated.
If you're promoted and given a raise, isn't that a deal? Suppose I'm a happy coder on $X, and you promote me to the miserable job of Project Manager on $X+10, how's it legal to call me into the office and explain that it's actually $X+2?
Is compensation at Amazon stated in virtual shares or something?
So AMZ made a mistake and changed the employee agreement. Seems unethical to walk that back, despite it potentially being legal.
1. First, I'm a bit baffled by some of the responses along the lines of "Amazon should just own their mistake". Sorry, but in the real world, "finders keepers" rarely applies (unless you're talking about crypto, but I digress...). I would certainly want a bug corrected if it were in my favor, and if a bug went the other way, I might need to re-evaluate my company satisfaction based on my new comp, but I have literally never seen a case of "sorry, payroll system made an error, but never mind you can keep it". It literally never works like that in any case, e.g. I work in fintech and if a bank accidentally deposits money into your account and you spend it, you can go to jail [1] - the bank doesn't say "whoops, our bad".
2. Many people who joined the workforce after the Great Recession have never had to deal with falling stock prices, and basically have just come to expect that the equity portion of their compensation should be like cash. The whole point of equity compensation is for it to be variable based on the success of the company. I get it, I wouldn't be happy with my compensation falling either (and I've certainly been there, in the .com bust), but I don't have much sympathy for folks who are just discovering that the variable component of their compensation can, in fact, be variable in the negative.
[1] https://abc13.com/spending-cash-bank-error-teller-error-can-...
There is a huge precedent for companies not paying for compensation calculation mistakes, which is also supported by law (in the UK at least where I am from - but assume it would be the same in the US).
Amazing how many comments in this thread are acting like this standard practice is a completely new thing with zero precedence.
You'd be surprised how many people follow the adage: "what is right is not always popular, and what is popular is not always right."
In this case, a verified compensation item given to an employee should be respected on principle, as this isn't a one-time "whoops we overpaid you," it's a months-long process that affected many people. AMZ should write it off as a bonus and move on.
That's not unusual. Well, 2x salary might be, but it's well established that job hopping is the only way to guarantee your salary stays close to market.
There is probably a missing category of employees who have been successful, gotten raises, and aren't shopping for jobs
A lateral job hop comes with a >10% raise, while an annual raise is 3-6%.
The article is slightly vague, but my takeaway is that employee got raises. Those numbers went through a bunch of people. The pay went out for months. Then, they realized they miscalculated the raises. “Whoops, we didn’t mean to offer you $150k, but really $140k.”
1. I think they have no chance at getting back the pay from before. This isn’t a banking error, this is regret. As an employee could you be like, “whoops I messed up my budget. I wouldn’t have taken this job at $150k. Please backpay me to bring it up to $180k”.
2. It’s well studied that losses hurt more than gains feel good. People hate having their comp lowered and the stock has already fallen. May be better to leave the comp where it’s at. I mean, it’s not like it was 10x or something. The numbers were reasonable enough for this to be super wide spread and people to not notice for months.
Big caveat that this is a US-centric view.
But, continued employment is easily dependent on recovering the overpayment one way or another. Usually by taking it out of future paychecks.
Moving it to a savings account is tricky because the automatic clawback will pull from whatever account it was sent into.
Once the company issues a W2 or 1099 the next year that covers it, I would consider it relatively safe to keep.
But other groups I'd be a bit more worried about them being willing to go to extra-judicial means to if not get the money back, at least get "revenge".
As a non American this seems... Flawed.
If Bob signs a contract for Alice to paint a fence for $800 and a copy-paste error transfers her $1000 instead, yes.
But if the copy-paste error happened before the contract was signed? Leading to Bob promising Alice $1000 and signing a contract promising it? Then in all probability, Bob will end up paying the contract amount.
But yes: if these were contractors Amazon had hired it would be very different.
An at-will employee and their employer contract that for each hour of work (or each ~week salaried) performed by employee on instructions from employer, employer will pay to employee $X.
Just because such a contract doesn't contain any term indicating the length of time an employee will work doesn't make it less of a contract.
As further evidence, if at-will employment were not a contractual agreement there'd be no recourse for the employee to recover unpaid wages. And yet unpaid wages are recoverable.
Let me be more concrete: am employer presenting you with a plan for future compensation[1] in an existing employment relationship does not constitute a contract. They can pay you what they want to pay you.
[1] Your back wages argument doesn't apply here. These people never got paid at all.
Every raise I’ve ever received has been accompanied by a “contract” hr puts in my folder.
Work done for contract is a real thing, it's just not applicable here. When you hire a plumber or a caterer or a security consultancy, you write up a contract ahead of time describing exactly the work to be done and the bill to be paid, and then get the courts to enforce that when needed. That is simply not the way that salaried employment works in the USA. It's not.
Every job I’ve had has had a contract, and it’s usually “we pay what we want, we terminate you when we want, and you quit when you want.”
Now, sure, it's true that some elements of an employment agreement may constitute contracts and may have been enforced by courts. Back wages are a big one, obviously. Likewise promised benefits being denied, etc... But at-will compensation and termination just don't qualify. They don't. The Amazon workers can't sue for their mistake raises under contract law becuase those raises don't constitute contracts. Period.
I'm pretty sure if you do work, as contractually agreed, the contract requires you be paid for that work.
It's just a contract agreeing rates for work done, not a contract guaranteeing work will be done.
Yes it does (and I even said so in the comment you replied to), but compensation plans, raises, offer letters, etc... are not payment for work done, and are not contracts for work for the reason stated. These Amazon folks aren't getting a penny, and it absolutely stuns me that people want to argue otherwise.
That’s theirs.
But going forward, they don’t have any right to any level of pay above minimum wage.
I’ve personally dealt with this. I had an employer run out of money and be acquired by a new company. The new company owes paychecks for last pay period, but wants to pay everyone lower salaries.
Going forward the new company could pay whatever (above minimum wage). But they owned all the debts of the previous company including that last months wage.
We only had at will hiring agreements, but that didnt matter.
>note that at-will employment simply lacks several (the big one being "certainty"). In particular a "contract" that says "you can do whatever" is clearly not a contract under common law.
Which was in reply to a comment about every job having a contract.
Further your other examples could be contractually enforced.
If you accepted an employment contract based on the compensation plan, that forms part of the contract. Raises are updates to the contract, unless you're saying it's potentially ok to claw back 40 years of pay raises when some one retires. Offer letters are probably more questionable but if there's a specific start date and pay has already been discussed, it seems to me that that would form a contract.
The key thing in this particular situation seems to be that there was an error, and the error was rectified quickly.
Banks offer accounts with “whatever we feel like” interest rates. Bonds can have “whatever we feel like” interest rates. Stocks can have “whatever we feel like” dividends. Short term rentals have “whatever we feel like” rental prices.
In practice, the payer offers a very short term guarantee: “for the next pay period, you will get $50 an hour”, but after that pay period they change it.
There are contracts behind all these things.
One party offers something on a continuous basis: labor, money, etc. The other party walks away when they don’t like what they’re getting.
This has zero to do with the actual matter at hand, given that the people getting the raises 100% believed they were getting raises.
A contract is an agreement between parties. Parties are free to agree to changes to the contract.
* Both parties (AMZ & Employer) signed up to a bonus % in the contract
* There was a document that stated % was equivalent to $ which was miscalculated
* Employer agreed to pay whatever the % in the contract was, employee believed they were getting the $ in the estimate.
Let the lawyers get together and do a retroactive class-action lawsuit to solve it. But Amazon will do whatever it wants until that suit comes through.
There are not takebacks here.
Actually, I know there legally could be, as these situations aren't always black and white, however the company, being such a position of power compared to the employee, loses all goodwill in this situation. If I were in this situation, I would already be sending out feelers.
Not just like cash. Like cash that may be worth 50% or more money by the time it vests.
Hopefully, it won't get that bad for large public companies but there are probably people out there today who are banking on their total comp being $400K (and making decisions on that basis) when it's actually more like $200K or less.
Should be both. To the latter, it depends how it’s structured. But typically by looking at a few years’ compensation.
Source: Recently went through the mortgage
BTW, I've had stock options that were never above water.
That'd be most stock options in private companies, though.
So do I, and it depends. There was a whole case recently where chase (iirc) accidentally sent tens/hundreds of millions of dollars to a lender, and the lender chose to interpret it is an early loan repayment, and was allowed by the courts to keep the money.
No. The appeals court smacked them silly in a unanimous opinion and the money was returned to Citi [1]. From the appellate judge:
> In a separate opinion, Circuit Judge Michael Park called the lawsuit a “straightforward case that many smart people have grossly overcomplicated and that we should have decided many months ago.”
> “Put simply, you don’t get to keep money sent to you by mistake unless you’re entitled to it anyway,” Park wrote
1. https://www.bankingdive.com/news/citi-wins-appeal-500-millio...
If the “best place to work” made an error like this, they would figure out a way to let the employee keep it.
Most places wouldn’t. But if I was in charge of a FAANG, an error like this happened, and I was committed to making the FAANG the “best place to work”, I’d cough up the change.
Does Amazon want to be the best place to work, or not?
[1]: https://www.theregister.com/2021/07/28/amazon_canned_workday...
Amazon’s real innovation isn’t a cloud service company or a logistics business. The innovation is on how to squeeze every once of labor and value out of a human being, and how to do this legally, without damaging customers’ or public opinion of the company, at massive scale.
As a leader, I was coached on how to motivate my employees by selling promotions as a carrot, even though my leadership had no interest in seeing through that person gets promoted. It was lies and gaslighting.
I was coached on detaching myself from employees and their well being, so it would make it easier to do the right thing for the company.
I was pressured to get onto specific managers who weren’t meeting their attrition targets.
The idea that amazon would walk back compensation targets is no surprise to me.
I need to know if I would switch. But I do not want to go to smaller company.
I think this is bang on. Their hiring process for engineers every single time I've been contacted by them is an immediate (before you could possibly have a clue if you want the job or not) is a tech challenge.
It's industrialized hiring that puts 100% of the burden immediately on the candidate at virtually no cost to amazon.
This is a huge red flag and I halt the process with any employer that uses it.
1. Teammates are out for blood. They go out of the way to ruin their teammates metrics. So much so that manager has to intervene because overall team metrics are declining due to this. Additionally, the metrics tracked are insanely stupid such as no of comments, revisions on a PR. This makes sure no healthy discussion/debate can happen on a piece of code.
2. Manager asks to crunch for no apparent reason. The problem with greedy and selfish managers is that everything looks critical to them. They only want to appease the upper management without any thought to people who will actually work with the deadlines.
3. People expect u to sacrifice weekends for "learning" internal tools. They quote everything as "learning experience".
4. Hell is an agile sprint system that has been optimized to require 10 hour days. We were required to estimate tasks for up to minutes and even then manager questions and pushes to reduce timelines.
5. Some great words from my manager - " Leaders never sit quiet. If u hv nothing to say, then speak anything or just say i agree". One guy follows this religiously. Another say - "Work on ownership aspect. If the guy reviewing ur work is not approving, its ur problem." I really wanted to quit right after this line.
6. If someone gives low Connections score, the whole team is reprimanded and huge "discussions" of pointing fingers happens.
7. All senior engineers and management give different advice on paper and verbally. This is because if the actions succeeds, they'll be lauded for "good management" and on failure, they can point towards their messages of concerns. They've mastered the politics of "gather all credit, divert all blame".
8. Deadlines are very top down where management promises castle in the sky and then asks the people below to achieve it no matter what. We've designed a whole cluster of services in a few hours and got some rubber stamp approvals as well. Most folks then get promoted and jump onto other greenfield projects not dealing with the aftermath.
9. People here are insanely subservient and those who aren't are generally kicked or they themselves jump to other teams.
These are very contrarion to my previous jobs where most points were very normal stuff between coworkers.
The first point is that things are manager and team dependent. Amazon is a lot more hierarchical than other companies when it comes to SDE levels, so I'd assume this also happens with managerial levels. There's probably a leadership disconnect that allows bad managers to thrive, but this is not a company-wide issue.
> Teammates are out for blood [...] metrics tracked are insanely stupid such as no of comments, revisions on a PR
I do agree with this to an extent. Some people at Amazon are more cut-throat and it can get annoying when you have to deal with them if you don't like playing those games. The metrics you're talking about are a mechanism for identifying outliers and are merely a data point; they aren't used to judge performance by themselves. I.e. if the rest of your team sends out 100 PRs a year on average but you sent out only 20, all it means is that it should be taken into account why your work style or output is different. If you've added 10 comments in the past year but your teammates have added 100 on average, that's also an indication that maybe you aren't pulling your weight in reviews. Managers don't have infinite time so they should be using these metrics as an indication of when to look into the details. Blindly using these metrics to evaluate performance is the sign of a bad manager. I'm sure there are bad managers, and people also try to game the system.
> Manager asks to crunch for no apparent reason
Could be the sign of a new manager (hasn't learned to say no to their leadership chain yet), or a bad manager. There are hard deadlines and soft deadlines, though even the hard deadlines can be softened up. Always pushing to meet every single deadline will lead to burnout and terrible output/operations in the long run. Prioritization is important, and that includes your team's mental health.
> People expect u to sacrifice weekends for "learning" internal tools
I won't lie, I definitely worked a lot my first year. There's a large ecosystem of internal tools, systems, and processes, and there's no other way to keep up unless you have prior experience or have someone helping you. The thing is that after about a year, I stopped having to do this. In the past year I haven't worked weekends or late into the night, except for a few operations-related high-severity issues (which is part of being on-call). My first year I definitely pulled 70 hour weeks on average, but I learned how to be self-sufficient. Now I pull 30 hour weeks, and I spend a lot of my time helping other developers on the team.
> Hell is an agile sprint system that has been optimized to require 10 hour days
Completely team dependent, we don't do any estimation for example and our sprints are more kanban.
> Leaders never sit quiet. If u hv nothing to say, then speak anything or just say i agree
We have some people on our team (newer hires in the past 1-2 years) that do not provide any feedback during design reviews or most meetings. Forcing people to say anything is a mechanism to get them to start talking so they get comfortable with providing feedback even when they aren't confident, so it builds up their confidence. Part of the issue here is the virtual environment, as it's a lot easier to get people contributing in person.
> If the guy reviewing ur work is not approving, its ur problem
This ownership aspect is definitely true and it's something that took me a while to get used to. There's no skating by on "I'm blocked by person X or thing Y". You have to figure it out, even if that means pinging them or their team or escalating to their manager (through yours). Typically you try to follow the reviewal process, make your PRs as good as possible, etc fi...
It was still competitive with market rates, so shit happens. Sucks to be on the bad side of this.
once I had done 30+ hours and been paid <£30 and both these figures were on the payslip (in the 00s).
Anyway once they paid us all twice, and sent us all a letter with the payslip basically saying we wouldn't be paid the next week. The one time they actually caught their own error.