Amazon - Competitive Intelligence BETA
Get insider information on how Amazon structures their compensation.
⏰ Recent Updates
- 10/2023 - Amazon allows managers to fire employees who do not RTO
- 10/2023 - Amazon’s Project Kuiper seems to be increasing hiring as they get ready for launch. We have had a number of clients with offers for that team over the past couple of months.
- 10/2023 - Amazon negotiations are significantly tougher currently. Guidance internally is to stick to standard offers to keep budgets tightened ahead of the new year.
- 3/2023 - Amazon new vesting schedule: Within the year they're moving to quarterly vests (instead of bi-annual). Pilot program allows employees to get 25% of their RSU grant as cash (See: Netflix).
📄 Offer Overview
🧐 Compensation Philosophy
What does a typical offer look like? What forms of compensation? Anything particularly unique to this company? How does this company pay relative to rest of market? How is compensation determined and set? Does compensation differ by location?
Typical offer: Base + Sign-on Bonus for Y1 and Y2 + Equity.
At Amazon, compensation bands are predetermined and an internal tool generates offers. Hiring managers and recruiters have flexibility within the tool to customize compensation.
Amazon has a tier system to set compensation by locations. Depending on which tier a person falls into, their band will be set accordingly.
💵 Cash Compensation (Salary & Sign-on Bonus)
Do they give a sign-on bonus? If so, how much?
Sign-on bonus is a part of the compensation package. Since Amazon’s vesting schedule is backloaded, the sign-on bonus is intended to make up the comp difference for years 1 and 2 where the equity vests minimally.
It's the opposite with other companies, where the sign-on bonus is the cherry-on-top to entice the candidate to sign the offer, after the company has exhausted base and equity.
Larger sign on bonuses (>$12k) will be paid in pro-rated pay period installments across your first and/or second year. They will align with your pay period and you’ll receive a fraction of your total sign on bonus with each paycheck until the full amount is paid off.
📈 Equity Compensation (Valuation & Vesting Schedule)
How is value per share determined? What is the vesting schedule? Are signing bonuses offered and what is the range?
Amazon takes an average of how stock has been doing for 30 days before when the offer is generated in order to figure out value per share.
Amazon's vesting schedule is back-loaded with 5/15/40/40. First and second year, since stocks vest at a slower schedule, this is why Amazon makes up for the difference in sign-on bonus for year 1 and year 2. For Y1 and Y2, you will get your share at the end of the year, however, Y3 and onward, stocks will vest every 6 months.
💳 Benefits & Non-monetary Compensation
What notable benefits does this company provide? Note: Also check Levels.fyi's public benefits page for this company.
401k: Amazon offers 50% match on the first 4% of base salary. Match vests after 3 years.
https://www.levels.fyi/company/Amazon/benefits/
Benefits at a glance (US):
- Full medical, vision, dental plans (effective on day 1; no waiting period)
- 10 vacation days when you join (increases with tenure)
- 7 paid holidays per year
- 401(k) Matching: Amazon will match $.50 for every $1 contributed to 401(k), up to a max of 2% of an employee’s base pay. Vests after 3 years of tenure. Eligible to join the plan upon hire.
- Amazon Extras - Employee access site to deals and discounts on goods and services, including car insurance, phone plans, travel, etc.
- Amazon.com discount - Amazon employees receive 10% discount on goods sold by Amazon.com up to a max of $100/year.
- With Anytime Pay, employees can access up to 70% of their eligible earned pay whenever they choose, at no cost, and in real time.
- Parental benefits:
- After 1 full year of employment, Amazon offers up to 20 weeks of fully paid leave for birthing parents, including 4 weeks prior to the baby being born.
- Up to six weeks of fully paid leave to supporting parents and adoptive parents
- Ramp Back program offers parents eight-consecutive weeks of flexibility and partial work hours after the birth or adoption of a child, as they readjust to work schedules as new parents.
⏳ Timeline
How much time does someone have to think about an offer before accepting? Are they strict about dates?
Once the offer is generated, you typically have 2 weeks max to think about the offer. Some Recruiters who are more eager to close the role can adjust the deadline to just one week. Work with your Recruiter if you need more time.
The rationale behind this is because Amazon determines value per share based on average stock price 30 days before from when the offer is generated, the stock market is volatile. If your offer exceeds that window, the Recruiter would have to re-do all the numbers.
🛳 Visas & Immigration
What are the companies policies for hiring non-US citizens? How does immigration process work?
Amazon kickstarts your Green Card sponsorship from Day 1. Fragomen is the Immigration agency that Amazon hires. They will work closely with you for required documents, status updates, etc.
🚨 Gotcha's
Anything to watch out for?
- Most likely you will not get any bonuses unless you get promoted, so don't bank on "merit increase" that your Recruiter told you. With Amazon stocks have been growing exponentially, most don't end up getting an increase.
- There's a cliff for 401k plan (read above)
🤑 Negotiations
🔍 Process Overview
How are offers generated? How soon can someone hear back from the recruiter after negotiating? How many rounds of negotiations can be done? What happens after signing an offer?
The Recruiter gets full control over this process. Within a compensation band, there're 3 tiers: min, mid, and max. When an offer is generated, the system default the first offer to a range between min and mid and automatically makes suggestion for what the break-down would look like.
The system is pretty intuitive, the Recruiter can manually adjust base if your preference is for higher base or equity. It works like this:
Recruiters plug in the total compensation number that you requested. The system can approve or reject if the total compensation in or out of the range.
Everything is pretty automated at Amazon. There's no compensation team for Recruiters to get an approval from, ultimately it depends on how soon your Recruiter can get to it, but safe to say, it shouldn't take more than 24 hours. Some Recruiters come back to you within an hour, that's how fast things move at Amazon 🙂
If you do a good job of explaining your concerns, reasons, and asking for a reasonable number, the Recruiter should land you right at the number that you're asking for with minimal back and forth. Use the Market Rate spreadsheet to see.
However, since the Recruiter has full control over this process. A lot of the time, it's dependent on the Recruiter' preference as well, some Recruiters might land you higher than the initial offer, but it's not the max number to get your reaction first. If you push back, then that's when they will land you at the max number.
Once you sign your offer, the Recruiter will send you a background check through. Once your background check is cleared, you’ll be good to go!
⚖️ Levers
What components can be negotiated? What levers can be adjusted (ex. salary can be increased)?
If you want a higher base, then you will most likely get less in equity, and a sign-on bonus will gap the difference between your base, equity to reach the total compensation that both you and your Recruiter agree on.
Our recommendation is to max out the base as much as possible. Think about it 3 years out, will you be happy with this base when you won't have a sign-on bonus anymore and it's probably not wise to sell stocks as soon as they vest either.
👥 Stakeholders
Who's involved in the process (ex. hiring manager, recruiter, etc.)? Who has the authority to make compensation decisions?
The manager is semi-involved in the process. They don't get to see the compensation band. As a courtesy, the Recruiter just has sent the final number that you agree to the manager for visibility but Hiring Manager wouldn't approve or reject an offer. Some managers just leave this process entirely to the Recruiter.
Some Managers might push back on the 'max' number because they want to give themselves some room to give you raises. Unless if they believe that they can promote you within 1 or 2 years, they will agree to the max number because with a promotion, you will get an increased pay bump.
📎 Other Negotiables
Can PTO be negotiated? Can relocation be negotiated? Can any other benefits be negotiated?
PTO cannot be negotiated. It's a company policy. The rationale behind this is Amazon is different than other tech companies where they have to consider warehouse workers. To keep it fair and standardize across the board, they don't tend to approve one-off requests for PTO.
For a company the size of Amazon, it's nearly impossible for them to approve one-off request when it comes to benefits since there's a lot of red tapes put around it.
💼 Negotiation for Employees
If I start and I get promoted, do I get to re-negotiate my package? Can I negotiate a raise? How hard is it to negotiate an increase after I join?
Generally speaking, promotion is non-negotiable. However, you should still push for a higher package but bear in mind that HRBP may reject this request.
Amazon lets current employees negotiate in 2 cases:
- If you are doing an internal transfer promo or internal transfer. The hiring manager would need to support your case and submit an exception to the comp team.
- If you get an outside offer, you can mention this to your manager and how you will likely take it but that you really love this team. HR/comp put together a package to bring you near max comp in your job level.
Note that if you change job family, then you will see a change in your compensation.
👩💻 Employee Compensation Policies
What happens after 4 years when my stocks are fully vested?
The employee will get a refresher in equity. How much that will be, it ultimately depends on what is your total compensation at that point for HRBP to figure out how many shares they can give you, but your total compensation should be consistent YoY.
Employees become eligible for the refresher RSU grant in the third year of their employment (if you're hired in 2021, you'll be eligible for the next grant in 2023). The vesting schedule is: 100% of the refresher grant will vest with a two-year cliff. Employees will also be eligible for new refreshers in the following years. However, refresh grants are not guaranteed, they depend on performance.
Ordinarily, this process occurs each April. The number of shares scheduled to vest on a particular vesting date will be rounded down to the nearest whole share, and if the number is less than one whole share, you will not receive any shares until the next scheduled vesting date.
💲 Performance Bonuses
Are they given? How do they work? When are yearly bonuses paid out? When is the cut-off for someone to be eligible for a performance review?
Performance bonus is conducted once a year. PSC get submitted in February and Manager will formally go over performance review in a 1:1. Amazon typically doesn't offer annual raises, though it does happen from time to time, if it does happen, it's typically around 1.9% - 2.5% or so. If your compensation is on the high end of the band, you most likely won't be eligible for any bonuses. If you do get a raise, you will find out by April.