I’m curious for those who receive a significant percentage of their compensation in stock or options if your total comp has drastically changed this year, and if your employer is actually doing anything to make up for it or not.
My total compensation dropped about 20%. It was definitely a meaningful motivator to switch jobs. I started a new job this month, which put me back at market rate for my level and geo, plus a modest raise.
Many people advise staying put during economic downturns for stability, but I actually think switching jobs is quite advantageous because you can get more shares per dollar in your initial equity grant. My shares at the new company were granted at a price ~25% down from peak. I'm optimistic the market will turn around in the next 12-24 months, leaving me with some handsome appreciation I would not have otherwise seen.
It really depends on how close you think we are to the bottom. Of course no one can say for sure, but as someone who came of age in the first dotcom bubble, and now finds himself surrounded by a generation of young engineers who has never known anything but a bull market, I think it's worth pointing out that the S&P has only fallen to Feb 2021 levels. We are still well above where the market was just prior to the pandemic, at which point we had already experienced a historic decade plus bull run on tech stocks which was then amplified by quarantine and everything needing to be done remotely.
I wouldn't be surprised if we're flat or down further 12-24 months from now.
Yeah, that's possible too. I'm certainly no economic expert, but my understanding is that bear markets typically last less than 2 years on average. But who knows? Your guess is as good as mine.
> bear markets typically last less than 2 years on average
According to a quick Google search, bull markets also last four to six years on average. The current bull market has been going on for about thirteen years now.
We're at a generational change in political control for the first time in four decades, in uncharted territory with low interest rates (as you note), and looking at increased wealth inequality and as assets have raged unchecked (same as previous point basically).
I think our conventional wisdom is failing here because we have not considered that the voting preferences will rapidly change over the next 8 years. Of course, the massive buffer there to my theory is Millennials will be the ones inheriting the bulk of these assets over the same time frame. Perhaps they will decide generational wealth isn't so bad once it is in their accounts.
Maybe Millennials won’t, but Gen Z polls favor progressive politics by wider margin than ahead of Millennials.
Gen Zs political lean has not softened as they age into their late 20s, as it did with Millennials and older.
Minus their elders, Gen X is not a powerful enough political force in another decade to avoid capitulating on new new deal type government. Gen X is pre Information Age, no where near as savvy and aware of how technological society works, raised by a still very God-headed society (the US recently just crossed a threshold of <50% believing in higher powers; was >80% around 2000).
Urban growth has seen fewer teens get a license. Pee wee leagues participation was down before covid, as parents worried about future health, and cratered due to covid. Some unis have ended early education programs due to low enrollment. Essential workers are not staying in essential jobs as long, as they’ve seen they’re just a target for abuse by people who can’t feed themselves. 80% of nurses are considering leaving the field as they’ve just seen Americans rely on them like a mother rather than care for themselves.
There are a lot of trends that are really interesting to see, and the big gorilla is a bunch of senile leaders like Feinstein who apparently forgets peoples names minutes after introductions, and others who can’t understand ideas that aren’t presented in folksy slang. American agency is a lot like her memory; giving way to something else.
Demographically you might be right about where the majority of the population leans. But it doesn’t matter. Between the “small state bias” of the electoral college and gerrymandering, the minority are going to rule for the foreseeable future.
The Democrats have now lost the Presidency twice in the last thirty years while winning the popular votes and are underrepresented in congress in comparison to the popular vote.
Most Americans disapprove of the recent Supreme Court ruling on abortion - even Republicans.
> Gen Zs political lean has not softened as they age into their late 20s, as it did with Millennials and older.
A quick search for generational boundaries put the consensus at around 1997, which would make the oldest 25 years old. I don't think there is any data to analyze about how their leanings will change. They've barely left college and during the most significant global crisis of most living people's lifetimes.
> Gen X is pre Information Age, no where near as savvy and aware of how technological society works
I'm Gen X, and went to public school in flyover country 30+ years ago. I've never been in a classroom that didn't have a computer, or to a school that wasn't connected to the internet. I've still got a folder of old elementary school grade reports and standardized test outputs that are just dot matrix printouts from a server in the state capital.
When my older siblings were teenagers (35-40 years ago), a lot of the popular teen movies included scenes in which the protagonists connected to the internet from their home computer, usually in their own bedroom.
When my father was in college 50 years ago, he used networked computers to write statistics programs and submit them to a central server on campus for his psychology homework.
60+ years ago, my grandfather had a tech job in Silicon Valley. Houses were expensive back then, too.
Us old folks are perfectly at home in the Information Age. It's the Disinformation Age we're having trouble with. But I have a feeling that your generation is having a worse time of it; you just don't realize it yet.
As an early 30's Millennial, my feelings about the "Disinformation Age," which may be a useful term, is my generation's internet has always been seeping with disinformation from my memories of unfettered broadband access starting in the late 90's/early 2000's, while our parents had no clue what we were up to. Many of us learned a lot of lessons over the past decades and have been horrified to see our parents fall for the tricks we did when we were 12. That does not mean we won't fail similarly to the next generation of charlatans, but I think our political moment in the US supports my view.
I'll also note that what used to be "As Seen on TV" products are now marketed with Instagram-chic, so the shifting target of marketing is clear. I can't help but wonder if every generation hasn't seen the same since at least radio.
Demographics are the only real broad brush crystal ball - we are now for the first time on the downward slope of the generational wave of increased consumption that the baby boomers historically brought to the consumer driven end of the globe, a different paradigm will emerge.
As for inheritance, you can almost make a certain bet that once the scope of transference starts to reach substantial proportions that the worlds governments will find novel and pervasive ways of garnishing taxes from such movements of wealth.
Exactly right. If you look at Yahoo news, you'll find several articles from 'experts' daily that predict either imminent doom or a sudden rise in stock prices. On the same day.
The great John Bogle said "Nobody knows nothing", meaning that nobody can predict where the market is going in the short term. (Long term, it's an up-and-right trend.) Your guess is absolutely as good as anyone else's.
I’m almost to my 5th anniversary at a FAANG so my base has grown a bit this year but my stock award refreshers are pretty anemic. With the stock downturn it’s barely worth much. The CEO was asked if the company planned to make up for the downturn and he fumbled through a non-answer pretty hard.
I’m working on some interesting stuff in a fairly specialized niche inside a well resourced part of the company. So I’m consciously making a trade off of falling behind on total comp but working on something I enjoy and hopefully staying employed through a downturn.
That's a valid reason for looking forward and creating a new 4-year RSU schedule. I certainly wouldn't expect my currently agreed upon RSUs to be increased with the same (already vested in some cases) schedule to "make me whole".
Maybe they have friends or like parts of their current job? They’d leave for more compensation if they have to, but would prefer not to have to. Seems reasonable.
Leaving any time you are dissatisfied about something without first asking if it could be improved doesn’t seem like the best strategy.
Because people protest when they have leverage. 1/10th of expectation may make people leave and 10X expectation will make people stay. There is nothing either "just" or "noble" about getting as much as one can, it is just the way it is.
If im selling my labour I intend go get the most that I can for it.
This is a business transaction, and every publicly traded company already has an HR team of dozens of people already treating it like it is. "Fun" and "rewarding" are just words that someone in recruiting gets to write down next to "15% hiring cost savings" on their performance review.
I don't know where you're at that the compensation is the only lever that matters to you. I have a job where my compensation is perhaps average+, but the flexibility is insane, I can take as much time off as I need when I need for family stuff, nobody is breathing down my neck, I wouldn't switch jobs for a 2x raise. Now 10x, well, OK. we're talking.
The relationship employee-employer is adversarial, the "we are a family" or "we take care of you" is a lie that unfortunately for the employee works more than expected.
Just remember that the employer is not asking you what do you think about you being laid off. They just do it. It might reasonable on their part when looking at the "state of the business", but you as a lower-level employee (not C-level) has no say in any of those decision, you get what is thrown at you.
I have also happen to believe that fewer hours, less stress, more flexibility are worth a lot of the money that is given up by not moving to a better-paying but more stress-inducing company. That's also the choice I made. But if I can get 1.5X, 2X etc. at my current company, you bet I am taking it big time.
I don't know how your comp works, but generally, at least where I worked, you don't benefit from stock growth that much, because the comp is already based on their predicted stock growth.
The company plans for a target comp and hope to make some of it due to stock growth, and pretends it will offer additional RSUs in case it doesn't. Generally, this works very well, because stocks were going up and up, but now they're being tested and seem to be choosing not to match the predicted comp.
This is why shares in the company you work for are potentially a double risk threat - you could lose employment and wealth all in one bad or unexpected business or market move.
My companies stock has fallen nearly 50% from it's peak this year. Leadership originally told me they wouldn't do anything when I pointed out average rent (I am single) was rising over half my paycheck and that my stocks had fallen greatly. I went all the way to HR with it, even demonstrating that under these conditions their new target software engineer was required to be married to another high income earner in both the Bay and San Diego. HR could do nothing. Eventually we had a town hall with hundreds of complaints, sometime later the CEO sent out an email saying they were raising our salaries 20% (which is still nowhere near market) across the entire company rather than addressing issues in specific markets. I'm turning in my notice after my bonus period and accepted a position with a substantial increase in base, stocks, and bonus pool. The position is also remote, which is another thing my current company told me will never happen.
Goes both ways. It is also a gamble by the company. They give employees stock and let the market pay for the salary instead of paying huge salaries in cash.
My yearly RSUs are big, but I set my base salary up to cover all of my expenses and give me spending money. RSUs go straight into investment vehicles after they reach maturity.
That's to say, I don't depend that much on stocks, but they are the critical path to getting a house in this market, which is also the critical path to lowering most of my expenses.
To be fair here - you’re not paid based on how much your local environment costs. You’re paid based on what a company think it can get away with paying you.
Even more true than you may know! During this process I learned that my company establishes salaries, not based on COL or an hourly average, but an average of what they're competitors (aka "peers") are paying.
I don't consider RSUs to be monetary compensation that's guaranteed; I see them more like the bonus that's written into my contract. Thus, my evaluation of pay is based pretty much on base salary. Has the bonus via RSUs taken a hit? Yes. Am I still earning well above the national average? Yes, about 2.5x. Could I find another job that would increase the base salary? Eh, maybe, maybe not. I haven't job hunted for over a decade now (which goes against the general HN view on job tenure), because I don't need to earn more than I currently do - I have a job that I'm comfortable in, and do things I enjoy with autonomy.
If the stock is liquid when it vests, then this is not a good way to analyze your compensation. Like it or not, part of your pay is in stock and you have to deal with the increased risk associated with it. Valuing the stock at 0 is wrong. Valuing it the same as cash is wrong unless you have a very particular risk preference.
If all else were equal, and I somehow ended up with two offers, from equally desirable companies, with identical salaries, where one offered more stock than the other - I suppose then I might then consider the stock to have value.
In real life, the potential value of a stock grant is not something I have any control over, so I disregard it. Recruiters want to offer me "total compensation" consisting of this and that and the other, but all I hear is "salary", because that's the number I can count on when making other life decisions.
If the stock ends up being worth something, it's always nice to get a bonus! But if the company never goes public, or the market crashes, or some weird merger happens, or I end up moving on before the RSUs vest, or whatever - then I can shrug off the imaginary loss, so long as I never count on the stock as if it were income.
I don't understand your comparison at all. A more apt comparison would be between two companies where one has lower salary + higher stock with higher TC and the other has higher salary + lower stock with lower TC.
In that case, valuing the stock is very important because the TC difference between companies depends on it. This is also talking about stock which is liquid when it vests (E.g. public companies).
How long does it take for those RSUs to vest? "There's many a slip twixt the cup and the lip", as the old saying reminds us; though the recruiters earnestly hope we will forget.
I got fired once, shortly before my first round of RSUs vested; that left an impression. None of my examples were hypothetical, actually; another time I watched the value of my stock rise, rise, rise - right up to instant-retirement, fuck-you-money level - then crash back down, before any of it vested, and stay there. Total compensation at that job ended up being total salary. Both of these companies were publicly traded.
In reality, if both of the hypothetical employers in your scenario offered a reasonable salary, I'd go for whichever had more interesting work, friendlier people, a shorter commute - whatever would make my life better. If somehow, inexplicably, I felt thoroughly inspired by both options, happy to go work in either place, and it really did come down to nothing more than the money - I'd still probably pick higher salary over higher TC. Unless it was, like, double, and then I'd be tempted. But I don't think I'm going to get any such offer.
As parent commenter I value it at 0. When I go on a coffee shop and want to pay with stocks they say they don't accept it. So, if I can't even buy a coffee with stocks they have 0 value for me. Base or GTFOH.
But that's just wrong and you'll misunderstand offers if you compare them that way.
Your coffee shop also won't accept the cash in your bank account. You have to transfer it to them somehow. There's very little different between that and selling shares, followed by a payment.
This is essentially how it worked at Amazon/AWS. When raise season came around you would get less of a raise because stocks increased. I told my boss I was dissatisfied with my paltry 2%, and he told me there was nothing he could do because my projected stock grants had increased so much from when I had started that he couldn’t give me any more.
Where I've worked they do. Finance has a target in mind, and they take into account your vesting coming up in the year and pay you less based on how much they think those vestings are going to give you.
So if your salary is 100k, and they want to pay you 200k, and they see you've got 35 RSU vesting during the year and they predict that will net you 80k, then they'll top it off with an additional 20k worth of RSUs.
Basically the stock increase is accounted for. Those 20k worth of RSUs will vest say next year, and if next year they're now worth 60k, they'll just give you less RSUs again, because now they'll repeat the same math, and see you're probably going to make 160k.
I would've thought retention grants were based on a total dollar figure rather than share price. That's how its worked for me at my current employer (now 8 years)
I joined my company last year when the stock was at an all time high and at the current price my total comp has dropped about 15%.
I asked whether they planned to make up for this, and the response from HR was essentially that it's tough luck.
I totally understand, that's how the stock market works, but it has definitely accelerated my plans to start looking around elsewhere (which would probably have happened anyway, it's not quite the right place for me). That said, I don't know what the actual refresher amount will be so it might be that it balances out somewhat.
It's perhaps easier to see when you compare this with a discretionary bonus paid in cash.
The company can decide on the bonus depending on how well you did and how much money the company has to spare. The implied deal with employees is that they'll leave if the bonus is too low for their liking for too long. Overall a pretty decent deal for people with enough base to make ends meet and a deal with lots of flexibility for the employer.
An established company like Google might have seen its share price fall recently, but still have plenty of money to spare and, importantly!, its competitors might also still have lots of money to spare.
For historical and institutional reasons Google like to give out a lot of stock as part of its compensation, cash bonuses play a smaller role. So if the value of stock goes down and they want to / have to keep the value of total compensation high, they would want to make up for the recent drop in stock prices by giving employees more shares.
Does that make sense?
> That's kind of the point of stock being part of TC isn't it?
In comparison, for a cash-strapped startup, you are exactly right, and for them the drop in total comp that comes with a drop in share price is exactly the point.
In this case, most of the competitors have lost stock value too, so it's a "fair" pay cut when things are going poorly for the economy as a whole.
There's usually the offer of cash vs stock, and the employee gambles accordingly. If they're going to get compensated for the drop in stock too, why even ask for more cash?
At eg Google (at least when I was there for a few years from 2014 onwards), basically everyone on the same level and in the same location got the same amount of cash. The amount of stock was variable, based on how badly they wanted you to join (or keep you) and how well you negotiated.
There was never any option to ask for proportionally more cash or more stock.
The stock vested over time and the grant was typically renewed every year. So that you basically could plan to receive a relatively fixed proportion of your total comp in newly vested stock every year.
From a financial point of view the newly vested stock was basically as good as cash: you could sell it straight away.
> In this case, most of the competitors have lost stock value too, so it's a "fair" pay cut when things are going poorly for the economy as a whole.
Look at the qualifiers in my previous comment. It doesn't matter what's 'fair', what matters is what the competition is up. If Facebook is still sitting on piles of cash and eager to spend it on employees, Google can't let their total comp drop too much, even if both companies have lost total market value.
If Facebook (and other competitors) spend less, Google will also have to spend less. That's not the same as the state of the economy as a whole, but it's related to it.
> If they're going to get compensated for the drop in stock too, why even ask for more cash?
As said earlier, at Google (at least back then) asking for more cash wasn't an option.
When I got an offer in 2018, they asked about cash vs equity and I said I didn't care so they seemed to go more heavy on the equity for my total comp. I then got an L+1 offer from dropbox that had a higher total comp and they matched it by increasing the salary and left the equity grant the same.
I was never compensated in stock, but I did get a 5.6% raise. Exciting I know. WOOO!!!!!
My compensation is hot garbage compared to a top tech company, but the work is really fun, so there's that! Like seriously, there are some top tech companies doing some really cool side projects, but the vast majority of their jobs aren't as cool. And the base salary is.. surprisingly comparable.
It depends on how you count it and how you receive stock compensation? My not yet vested shares have gone down quite a bit. On that angle, I guess you can say your total compensation will drop since the shares that vest this year will be worth less.
If you look at your yearly grants + cash, then I expect it to stay the same for most people. Many equity plans grant a percentage of your cash compensation as stock.
Personally, I am somewhat dismayed when I see smaller numbers, but I am also looking forward to an opportunity to get many more shares at a good price.
Actually because of the vagaries of my four year offer and timing, it actually went up by $10K this calendar year. But if the stock doesn’t rebound or I don’t get a raise. It will go down next year.
I started working at my current company in mid 2020. Most of my compensation for the first two years were cash (base + prorated signing bonus) and I didn’t get any real amount of stock until earlier this month and for the next two years.
Yes I know, how do you say which BigTech company you work for without saying which company you work for
I started working at Oracle nearly a decade ago, after the stock had gone up significantly. After this peak, the stock was not really expected to go up much in the next couple years. Around that time, they started giving employees a choice between options and RSUs. The thinking was that options are worthless if the strike price isn't hit, whereas RSUs can drop in value but not to zero.
If they're not doing so already, I imagine other employers will start offering RSUs as well.
Maybe a silly question but how are Netflix employees faring with this change? I know that Netflix is famous for paying 99% cash. How does that work when the stock crashes 80%?
They automatically get 5% of their base salary as discounted non-qualified options, which are worth nothing now going back to like 2018 or 2019. Some people elect to do up to 100% or their salary as nonquals and they’re probably hurting but the expiration is 10 years.
If things have now stabilized, my TC for 2022 will be down about 25% from what it would have been if our stock price stayed flat at the Jan 1 price. It'll still be over 50% higher than what it would have been if our stock stayed flat over the last four years and my refreshes were all the same size in dollars.
They did try to make it right: I got a merit base salary increase of about 9%, and the company gave a top up RSU grant when they usually do stock refreshers once annually. I appreciated that, but this wasn't enough to make up for the stock crashing hard. I'm pushing hard for a promotion to try and somewhat make up for it.
When I started working here I thought of RSUs as a casino and never counted on them for living expenses, but they've become such a huge part of my total comp that it still stings mentally a bit. I'm still very well paid, but we have some big expenses coming up around trying for kids. With inflation we're trying to budget a little tighter to ensure that our plans go smoothly.
When I was at Amazon I asked about this but in relation to the dotcom bust and if memory serves me right, they did a one-time top up for everyone who was massively down due to "x% salary SBC" as the x while variable, formed a decent part of people's living expenses.
TC included RSUs this year, with a fixed-dollar conversion for the quarter after grant - $XYZ dollars, to be divided by trailing N-day stock price on $date and granted as RSUs. Roughly, grant ended up at $5 conversion rate, by the time we could sell it was $4, and now it's $2. So $100k in comp is currently selling for $40k.
I haven't heard anything about an adjustment or the possibility of additional grants. For now I'm more concerned that we're approaching break-even on my ISO valuation from 2+ years ago, after a 52-week high (during trade blackout) that would've given me Dos Commas status.
Yes, down 30% from my original offer TC from about a year ago. Meanwhile, new hires are getting offers 15% higher than my original offer.
I’ll likely leave this year unless the company does something about it.
Yeah, total comp down by 20-30% depending on how you define the "before" value of the stock (somewhat complicated by a refresher after the stock had lost some value but before recent lows). Still ~10% better than my other offers at the time I took this position and ~50% better than my previous employer, though.
Around the end of 2021, I got a new job and negotiated a big salary bump for a startup on the basis of my total comp and not base. It wasn't a huge raise total comp-wise (excluding options), but it was all cash./
The company I left tanked recently (more than the market).
It’s a tax benefit, in a way. I live and work in Switzerland, here the tax is paid on vesting. So, if stocks are down when vested it’s beneficial for my tax bill. I don’t mind waiting a year or more for them to go up again.
Basically I concur what searedsteak wrote. Would add that stock grant in the company is in number of shares and is paid out over 4 years. So, I really like low stock prices when they vest (taxable event), while capital gains is 0 for non professional investors. So, unless you intended to sell stock right out there’s no difference and only gain. I never sell shares of my company.
Switzerland doesn’t have capital gains tax except for professional stock traders. So there wouldn’t be any tax on the gain after vesting. But yeah it’s a gamble on the stock price that’s for sure.
Yes, about 15% less. On the other hand I got promoted and my promo stock was valued near the bottom from last year. When the market recovers I expect my upside will be larger than the loss, overall.
It's never actually money until you take it off the table and bank it as dollars accepted as legal tender for the majority of goods and services - many a slip twixt the cup and the lip...
One of my bonuses went down 40%, but TC only down 5-7%. Not so much for the stock market downturn, though (maybe 20% of that 40%). I will survive, deeply irritated, but still breathing.
I work for a privately held company so, no, our valuation (if you believe it) has not dropped and so neither has the paper value of my equity compensation.
Many people advise staying put during economic downturns for stability, but I actually think switching jobs is quite advantageous because you can get more shares per dollar in your initial equity grant. My shares at the new company were granted at a price ~25% down from peak. I'm optimistic the market will turn around in the next 12-24 months, leaving me with some handsome appreciation I would not have otherwise seen.