The rear weighted AMZN approach made sense to me in terms of both optimising retention and some proxy for reward to contribution. I say this also as someone who left after 2 years and as a result left most of their stock unvested. It definitely made the choice to leave much harder so I’d expect it to skew more heavily toward retention benefits than a typical schedule. A typical schedule has a linear growth of what you’ve vested. I’d expect the value of contribution of a person to grow over time though. More context, more experience, more everything. Hopefully that means the you 3 years from now is making a more significant contribution than the you they hired. Typical schedules hope that the increase in valuation accounts for that compounding return. AMZN have shifted it to the vesting schedule.
That said they always talk about “total compensation”. So for the stock you’re not getting in the first two years you typically get as cash via a “hiring bonus” anyway. You could always just use that cash to go buy the equivalent amount in stock, no vesting required.
Also I would curious what you left Amazon before those vested?
- 5% after 1yr
- 15% at 2yrs
- 20% every 6 months for years 3 and 4
The 401k match also has a 3 year cliff.
But as they said, years 1-2 you typically get a signing bonus
The median tenure at AMZN is also 1.5yrs, per linkedin. Their strategy seems to be to work their people extremely hard to earn their RSUs and pay them like plebs with hard caps on earning potential (base comp).
Is this a well-known thing then? More so than other FAANGs?
As for why: a rebalancing of priorities re work/life/travel balance and a better sense of connectedness to my actual work and the success of the company. Not gonna lie though, I look back at what I left on the table and the AMZN share price over the past 2 years and I still wonder if it was the right choice.
It makes "stay 53 weeks and cash out" less appealing, it makes "stay 6 more months to hit the next cliff" less appealing, and it rewards long-haulers (who are underpaid almost everywhere else in tech).
That said, I have seen 5 year vesting (which seemed like a red flag to me), and have heard of Amazon's schedule where you mainly vest in later years. These were bigger red flags for me than a 1 year cliff.