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by jedberg
2201 days ago
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> Wow! So do high level employees have to sell shares to pay their mortgages and credit cards? They give new employees a bonus in their first two years to make up the difference before they start vesting. After that, yes, they need to sell stock if their expenses exceed the cap. Which is fine as long as Amazon stock keeps going up. Another side effect of this is that if Amazon's revenue drops, they don't have to move to layoffs so quickly. Everyone's salary will naturally go down, since the shares they get each month are worth less, but it will feel better because "no layoffs and no pay cuts are necessary". |
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Leaving aside share buybacks, they're still paying the same salary and are still distributing shares from the same allocated pool.
On the other hand, if there is a big share price drop, a lot of your employees have suddenly taken a big compensation hit. (And they may have already paid taxes based on a higher share price at the time of vesting if they didn't immediately sell which is another argument not to hold onto a lot of RSU shares after vesting.)