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Comment by School-Cotton | Hacker News Reader

This is a misunderstanding because it doesn't take into account the asymmetry of the situation: you have more to gain by RSUs going up than you have to lose by them going down.

Imagine my yearly pay will be 150K at Amazon or 200K somewhere else.

Amazon stock could go up, and my pay in my second year could be 250K, in which case I am making more by being at Amazon.

Or it could stay the same or go down, in which case my pay in my second year would be <= 200K, but in that case I can just ditch Amazon for another company to bring my comp back to market levels.

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You can buy call options covering the entire vesting amount of RSUs with less than the 50k that would give you the potential upside that you would have as an employee.

Remember, predicting that a stock goes up is just as lucrative for an outsider as it is an insider. Never make a stock prediction part of your evaluation of a job offer because there are plenty of financial instruments to allow you the same upside as an outsider.

Can you explain exactly how to do what you describe? with Amazon's vesting schedule of let's say $200k RSU over 4 years? how much would it actually cost to "invest" like that?

You can always tell the people blowing smoke about stock options because they are speaking in the hypothetical instead of the past tense :)

As I used to tell people about why I was selling my options at [some other name brand company] as fast as they vested, choosing to work for the company is an investment. A huge one. And since I was far more likely to be laid off if the stock tanks, owning shares and working there was not diversifying my assets.

It’s the only time I made money on stock options and most of what I earned I earned by... profit taking on shares of a different company that enjoyed two stock splits before our stock started to crater.

Here's past tense: My grants have tripled in value since I started, and as a result my total comp over that period of time has been considerably higher than the offer I received at Google, which was in Mountain View. The higher COL of the Mountain View offer PLUS the outperforming stock put my comp way above what Google would have paid.

When that behavior ends, if Amazon doesn't adjust my comp, I can go to some other tech company, while still having one of the best names you can have on a resume (although, Google would have been arguably better in that case). Furthermore, if we consider my stock gains as part of my annual comp, it gives me a vastly better bargaining position.

Still blowing smoke?

>Still blowing smoke?

Yes, you're not correctly understanding that you depended on a gamble to outperform the Google offer. That same gamble you could have explicitly made in the stock market while taking the Google offer and capturing the upside of the Amazon stock.

Not at Amazon.

They take stock performance into account and it effects your future raises.

So yeah stock can go up, but if it does, you are never getting a raise.

That's not quite accurate. They take it into account for future stock grants. If the stock does well, you won't get more for the given year, but you will still get a raise.

Also, if the stock doesn't perform well, Amazon will grant you more to keep you in the expected band; but it won't take any away if you are making "more than you should".

They will only grant extra if the poor stock performance isn't a result of real problems in the company or economy.

They won’t take away terms of your existing grant, but they will nerf future annual grants when they see that you’re “already making plenty” with the shares that are yet to vest.

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