Clearly in the US. I have the idea that in at least some European countries, it's less prevalent and definitely less public / blatant. Not entirely sure though, eg we Dutch like to think our country isn't very corrupt but somehow we just don't seem to notice when our ex ministers get cushy jobs at the bigcos they helped to deregulate.
I think the US is kind of unique in how obscenely public the corruption is. Elected judges who fund their campaings with money from companies they help win trials, super PACs, the list seems endless. No wonder y'all are libertarians.
I don't think that's necessarily an indication of corruption. Being a minister (or other high-level official) gives you a lot of fairly unique experience and knowledge that could be quite valuable to a corporation.
Of course it absolutely can be corruption, I just don't think that ministers moving to industry can be taken as evidence on its own.
I now believe that the best way to reduce government corruption is to reduce government. I also feel that government support for corporations should also be limited, and corporations should be carved out as a "non-living entity" class separate from personhood.
I'm more pragmatic that the more an-cap side of things, I feel that the government should at least orchestrate essential infrastructure, and that should include internet, telecom and roads/highways. Most of that PoV is rooted in domestic security.
However, it's a bit of a sticky, dividing part for a lot of libertarians - especially the more dedicated believers. You get the ones that are just so driven to "gub'mint don't tread on me!", and you get the ones that understand that any mindset or belief is not bulletproof in theory and/or in practice and need to build safeguards in place.
In an ideal, perfect world to a lot of libertarians (again, this is subjective) - there wouldn't be a need for any government ran programs. That will never, EVER happen in my opinion. There will always still be people who just are not educated, intelligent, lucky, skillful, advantageous (whatever qualifier anyone picks to use) enough to succeed or to be able to have an acceptable standard of living independently. We need to have some sort of safety net in place. What that net is, I'm not educated enough to offer an opinion or thoughts on specifically.
Rest assured that there's a LOT of libertarians that understand that "shit happens" and there should be systems in place to handle these edge cases.
As I've commented before, people regularly oversimplify this problem as socialized vs private healthcare without considering why American healthcare is so broken. If you look carefully at the problems, you see that they won't go away if the government replaces private insurance and expands Medicare for everyone. These problems include a tremendous shortage of doctors [0]. Even Canada and the UK have more doctors per capita, and they are known for extremely high wait times (the jokes of the socialized medicine countries, so to speak). There are a number of possible reasons for this, most notably the hassle of occupational licensing (12-14 years of expensive college + 'indentured servitude' residency in the US).
Nonetheless, American healthcare science is still ahead of the curve and subsidizes socialized countries -- ~60% of all new drugs between 2001-2010 were invented in the US, and foreign dignitaries of socialized medicine countries often still get important procedures done in the US [1]. It would be interesting to see how the R&D dynamic plays out if America loses its market incentive to innovate in the space, and no other developed countries have the financial incentive left.
[0] https://data.worldbank.org/indicator/SH.MED.PHYS.ZS?end=2018....
[1] https://xconomy.com/seattle/2014/09/02/which-countries-excel....
1. I would like to see the spending the government currently does regarding healthcare (govt employees, elected officials, medicare, medicaid, va, etc) rolled into a non-profit healthcare corporation. It's important to include the government officials and staffing here, as they get the same as everyone else to discourage tiered services.
2. From there, I would make it a requirement that Insurance Corporations act and negotiate as a fiduciary on behalf of their clients. One of the serious lapses in the Obamacare legislation that has let insurance companies largely not try to negotiate prices down in order to raise the oceans in terms of costs/profits.
3. I would seriously reform/eliminate extension patents. (competition)
4. I would make dual-sourcing a licensing requirement from the FDA. (security + competition)
5. I would make 50% US production for all medications a requirement for FDA approved use (security).
6. Any company can purchase coverage policies from the Non-profit insurance corp that covers govt employees and current welfare coverage programs.
7. Require no more than a 20% pricing variance between customers in a 15 month window for a given procedure by a medical provider. (no dual-books for insurance covered and private pay)
While there are other steps that can be done... part of it is to merge and adjust spending directly based on current spending, but having a non-profit corp that also covers govt employees is a baseline. By breaking it off, you can allow for a stronger level of competition of services.
Reducing patent protections, and making dual sourcing and partial domestic production requirements you again encourage competition. The requirement for dual-sourcing is partly security and partly to ensure competition.
Now, this is emphatically not a Libertarian ideal, and would not cover everyone, but what it would do is expand competition and reduce incentives for poor behavior. It should have the side effect of lowered costs over time. From there, individual states could create their own expansions or services beyond this, as could specific cities.
Over time, I'd prefer to see the FDA shrunk and sane guidelines in their place... Allowing for input based on relatively trusted testing to allow/disallow certain medications and reduce the incentives to produce less-good drugs only to expand patent exclusivity.
It would take a groundswell of support for such actions.
Senators are people though and they have to eat, so maybe having a lunch meeting with the senator would be okay? Paying for a reasonably priced lunch for the senator? Say $50? Each? How about a $300 lunch? At the country club? with a round of golf after? Dinner? After dinner entertainment? And what if that entertainment "happens" to be strippers and cocaine?
The senator needs to get re-elected though. So in addition to political donations to their campaign directly, donations could be made to "totally definitely not coordinated" SuperPACs supporting them.
That's before getting into the fact that lobbyists have no obligation to present a fair and balanced picture of the situation. It's easy to sell a narrative that doesn't reflect reality if there's no one to challenge you; you can just leave out any and all inconvenient facts. Additionally, huge corporations are able to threaten layoffs of the senator's constituents.
To be clear, some of this stuff is highly regulated. Eg we couldn't bring doughnuts to a morning meeting with NASA because they're government officials and that could amount to bribery. Lobbying just has a very complex set of laws to skirt - and if you're a professional lobbyist, figuring out how to skirt those laws in order to buy influence is literally your job.
Were you a government employee? If so were you in a different agency? Can NASA employees bring doughnuts for other NASA employees?
Of course, because we're talking about money and people and relationships, there's inherently some corruption that seeps through, but most of the laws (and lobbying) is pretty boring stuff. Without lobbying most lawmakers would have no clue about some issues. How could they?
I guess they could spend all their time researching random problems, but lobbying helps vet important issues. They are representing a constituency, after all.
And, in reality, good politicians do do their own research, and many even write bills and promote policy that they genuinely believe in (even when it agrees with lobbyists).
The difference is money. Lobbying is effective for groups that have a lot to spend. So for almost any pro-business issue lobbying can have a strong effect. That might be ok, but there's no similarly effective mechanism to push issues that don't result in direct profits to the people that care about them.
There are countless issues that are very important and should be addressed, but that don't have any direct financial beneficiaries and so are often ignored in US politics.
(Disclaimer: I work for AWS but my opinion is my own and does not necessarily reflect the views of my employer.)
Everyone I know pins their lifestyle to base and saves near 100% of equity. Some don’t sell at all. I’m guessing that would change with a hard cap on base.
That’s a different kind of exposure, not just to long term performance, but day to day volatility, and specifically during open trading windows.
Employees at this level tend to have a pretty high level of financial management services to manage scenarios like this. I have two associates, not close enough to call them friends but close enough to have some insights, on the edges of this world. What they do:
- Other investments provide so-called passive income and that cash flow plus base salary is used for minimum expenses.
- Spending on larger-ticket items and services is budgeted out and is drawn from a variety of lines of credit secured against things like stock or the underlying holdings of those earlier investments.
- Most spending is planned in advance, either annually or quarterly, based on past income and future expected income. How much is added on the "future" side is financed by (often very inexpensive) leveraged debt and is calculated based on the risk tolerance of the individual.
Securing the debt with assets makes that debt screamingly inexpensive. Paying a handful of percent on debt that will only be borrowed for a few months at a time is, of course, seen as a reasonable cost to smooth out cash flow and leave the other money invested at a much higher return.
One other person I know who is not a higher-level employee but structures his spend very rigidly goes one step further and prepays all of his non-housing bills out of his annual bonus and one of the stock awards during the year. His annual salary and any other stock awards pay for housing, food, and savings.
I think you're seriously overestimating how sophisticated the financial management is of your typical software engineer, who could very well be spending beyond the cap with none of those things you mentioned.
In my experience, most Amazon employees just put everything on a credit card, and then they sell stock to cover the credit card payments if their salary doesn't cut it.
That's pretty much the extent of their financial planning.
As a case in point, we had to spend a lot of time educating people at Netflix how stock compensation worked, including a lot of VPs. They just didn't care, it was of no interest to them.
Money goes into bank, money comes out. ETrade account has a big number, yay! That was about it.
Of course some of them were much better than that, but just because they are engineering executives doesn't make them good with money.
I see from your profile that you work there. Curious if you agree with me or not.
I assume my colleagues are capable of managing their finances wisely. I could be wrong.
In any event, I'm not sure a tax strategy discussion is enough to make an overarching conclusion from about someone's financial competency (or, for that matter, an entire group of people's). You can suck at tax optimization strategies without being a reckless overspender.
We discuss salaries and total compensation too, so we are better prepared for our own negotiations.
And also, spending on the credit card and then selling stock to pay it off isn’t necessarily reckless or overspending. Imagine if it were all cash. Would you say they’re overspending because they pay out half their paycheck each month saving the other half? Given that for many amazonians their stock is more than half their compensation, selling some stock isn’t really overspending.
I don't intend to sell my stock except to diversify my portfolio. I intend to live long beyond retirement, and I'll need it.
The median home in the US is 2,300 sq ft. To get that in the Bay Area in a good school district will run you about $2.3M. Assuming you put 20% down, you'll need to mortgage $1.84M. At today's rates, that's about $7,360/mo in mortgage, and about $2,100 in property tax.
So we're already at $113,520 a year just for housing.
You'll also need to pay taxes on your total comp, including the RSUs that you vest in, whether you sell them or not. Assuming you make $250K a year in total comp, and let's say you have a ton of deductions to get a crazy low tax rate, you'll still pay about 30% in taxes between Federal and State. So that's 75,000 a year.
So just in housing and income taxes, we've already spent more than the Bay Area salary cap (you've spent $188K).
And we haven't even talked about insurance, cars, food, or daycare.
I can easily see a middle class family spending more than the base salary.
Obviously it depends on your circumstances. But I would not attempt to live like what you describe in the inner Bay Area. That sort of lavishness--which I know is not particularly lavish elsewhere by American standards--is reserved for the truly wealthy here, or someone who bought their home long ago (even 15 years would suffice; less if you bought in Oakland).
It's not just that. They also get to avoid paying capital gains taxes on their shares. So they can borrow against those shares to buy income generating assets that more than cover the interest costs and they can do so while avoiding having to pay the taxes on those gains (especially important when those gains are still short term capital gains where they would be taxed as income).
You should evaluate what your ideal investment mix is (keeping in mind that you already have a lot of exposure to the company where you work and have unvested equity) and always rebalance towards that. The source of income is immaterial.
Thought experiment. If you got paid the same amount in cash that the company gives you in stock - would you use the equivalent amount of money to buy the company’s stock?
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".
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.)
Yes, we can tell sarcasm without listening to verbal inflection.
At the very least, some method exists to produce liquidity without actually losing equity, or the whole $1-salary but compensated purely by stock CEO model wouldn't make any sense (if they're just immediately selling what they get, then it might as well be a performance-based, or stock-based, bonus)
As an aside, is this materially different than any other FAANG? All the offers I’ve seen when browsing tools like levels.fyi scale much faster in stock/bonus compensation than in salary.
The point of the entire thread is that "Glassdoor says this person makes 170k" is misleading because Amazon is unique with these salary caps. Even executives do not make higher than 160k (or 185k in SF) salary, so looking at that number on Glassdoor or levels.fyi doesn't tell you much. If you are trying to determine an Amazonian's compensation (as this thread was trying to do) you need to be aware that the salary number alone is not an indicator of total compensation.
It is materially different from other FAANGs, because AFAIK other FAANGs may give high proportions of their pay in stock, but they do not have a hard cap for salary. At Google, when promoted to VP level you may still get a 10% salary bump along with your 50% stock increase. But at Amazon, after you reach $160k you will never get a salary bump again. This leads to confusion for people that aren't familiar with the stock grants because if they are comparing Google vs Amazon pay, they may go to Glassdoor see that a Senior Developer at Google makes $300k salary while an Amazon Senior Dev makes $160k, and not understand why there is such disparity.
I swear half the comments on this site are just nitpicking "nuh uh you are wrong about this tiny one word in your comment" while ignoring the actual point of the discussion.
And yes, there is a hard cap at 160K. The hard cap apparently changes based on geographic region, but that doesn't really matter for the people in Seattle (the majority of Amazon's employees) who are under a 160K salary cap.
Just as a point of comparison, an L4 at Google could have a 160K salary.
edit:
Since you make over 100k, you're also considered a white-colar employee...
Your boss has decided the work-week is now 60-hours a week, and you don't get paid extra for it.
Oh, and if you don't perform, you're fired.
And if you try to work for a competitor, you will be sued and a protective injunction against you being able to work for the new job will be given.
And that's all a-ok by you, because you make what most would consider to be a wealthy lifestyle.
> A new law passed by Washington state last year put restrictions on non-compete agreements, with a series of exceptions, including a provision that allows such agreements to be enforced in cases when an employee earns more than $100,000 a year. Hall earned “well in excess” of that amount in 2019, and was projected to surpass that in his 2020 compensation, as well, Amazon says in its suit.
> The suit shows that the legislation “has done nothing to stop this abusive labor practice by the state’s most influential employers,” said angel investor Chris DeVore, managing partner of Founders’ Co-op and the former managing director of Techstars Seattle, who has been outspoken against non-compete clauses.
Amazon lobbied heavily for that carve-out specifically because it wants to hang non-competes over its employees’ heads.
(The law was passed in response to some fast food franchisees hanging non-competes on their hourly employees but, in its original form, would have barred almost all of them. Obviously Amazon could not stand for that so bought itself an exemption.)