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Amazon Offer Compensation Package Components
Before starting any salary negotiation, it is critical you fully understand the compensation components offered.
This is particularly important for Amazon salary negotiations given its unique compensation structure.
A typical job offer for a tech role at Amazon (e.g. Amazon Software Development Engineer) should contain the following monetary components:
- Base Salary
- Year 1 Signing Bonus
- Year 2 Signing Bonus
- Equity (also known as Restricted Stock Units - Amazon RSUs)
- Performance Bonus
- Stock Refreshers
Your recruiter will share your Amazon offer letter with sections outlining each component that comprises your total compensation. The image below shows base salary and signing bonus sections.
We recommend clients convert the offer letter to a 4-year chart. This helps you evaluate the offer from a TC (total compensation) perspective, which is particularly helpful given the disparate compensation structures across big tech companies. The example below shows an average Amazon salary for a 2021 L5 Seattle offer.
Amazon Salary Table
Note: Amazon yearly total compensation is actually higher in year 1 and 2 because they informally factor in 15% yearly stock appreciation. This is certainly a bold assumption, and we would recommend against including that when comparing job offers. See below for an Amazon recruiter email outlining this.
The high-level overview of the typical amazon salary and total compensation structure is certainly helpful, but there is a lot of important nuance for each of these components that is quite different at Amazon compared to companies like Facebook and Google. We will share as much general advice as possible below, but if you are looking for more personalized advice, we'd recommend signing up for a call with our negotiation team.
Amazon Base Salary
Amazon famously had a base salary cap of $160K in Seattle ($185K in SF/NYC) and recruiters loved to remind candidates that Jeff Bezos was subject to the same cap on base salary. However, in 2022 Amazon increased their base salary cap to $350K. Most roles won't reach the base salary cap as total compensation is still comprised of multiple components. However, for senior and executive clients, it is now possible to max out your base salary at $350K.
Since it is impossible to increase your base salary above this cap (this is true, not an Amazon negotiation tactic), if your initial offer was $900K in the first year with a $350K base salary, it is a much better strategy to focus your negation on the signing bonus and RSU components.
Amazon Year 1 Signing Bonus
Amazon is also unique in offering a year 1 and year 2 signing bonus. The reason Amazon offers this is actually related to a separate component, RSUs, which we will cover in detail shortly.
The quick summary is that Amazon only pays out a small portion of equity in year 1 and 2, and as a result, they offer signing bonuses in both years to ensure comp is similar across all 4 years.
Amazon Year 2 Signing Bonus
Recruiters and hiring managers typically have quite a lot of flexibility to increase signing bonuses. In some situations with highly competitive candidates, we have seen these numbers double from initial to final offer.
These signing bonuses are paid on a monthly basis throughout the first 2 years and are not clawed back (i.e. you do not have to repay the money you have earned) if you leave during that 2-year period.
This point is frequently incorrect in other articles, so we've included the wording we've seen in all our Amazon offer contracts:
"In appreciation of your decision to join us, you will be eligible for a sign-on payment of $151,000.00. This sign-on payment will be issued in prorated pay period installments as you complete your first year of employment with the Company. Each installment will be earned at the time of payment.
If your employment with the Company is terminated for any reason prior to the first anniversary of your Start Date, you will receive one final prorated installment based on the days worked in your final pay period. No additional installments will be paid."
As a final point, this bonus is taxed as regular, not special income, which can be a tax benefit.
Amazon Equity Compensation - Amazon RSUs
Many big tech companies vest RSUs evenly over 4 years. This means if you are granted $400K RSUs you will receive the following:
- Year 1: 25% ($100K)
- Year 2: 25% ($100K)
- Year 3: 25% ($100K)
- Year 4: 25% ($100K)
This is true at companies like Facebook and Microsoft. Additionally, those companies have more frequent vesting dates during the year. At Facebook, equity vests every 3 months.
However, Amazon does not follow this approach. Amazon RSUs vest 5% in year 1, 15% in year 2, 40% in year 3, and 40% in year 4.
Below is the specific wording from an Amazon offer contract:
"Subject to approval by the Board of Directors of Amazon.com, Inc., you will be granted a restricted stock unit award with respect to 97 shares of Amazon.com, Inc. common stock.
This award will vest and convert into shares of common stock over four years, as follows, subject to your continued employment with the Company:
- 5% on the 15th day of the month in which you reach your first anniversary of employment,
- An additional 15% on the 15th day of the month in which you reach your second anniversary of employment, and
- An additional 20% every six months thereafter, until fully vested"
Another aspect that is unique is that Amazon quotes equity values in number of shares rather than the dollar value. In order to compare to other offers, you will need to pull the 30-day average stock price in the month prior to your contract creation date (e.g. image below). Note: Amazon does round down when calculating how many shares vest in year 1, 2, and 3, though that will be remedied in the final year.
At Amazon, recruiters are given a compensation calculator to determine offer numbers based on two inputs:
- Target compensation
- Yearly base salary
The calculator then determines the number of RSUs and the signing bonuses.
But here is the catch. If Amazon gave you an offer on May 10th, the number of RSUs would be determined based on the average share price in April. In April the average share price at Amazon was approximately $3K per share. However in May, the average was closer to $2.2K!
Let's say your offer is supposed to have $100K in equity. If you sign the offer in May you will be using the $3K share price which would result in ~33 RSUs. If you wait and sign the offer in June the number of RSUs on the exact same offer will jump to ~45 RSUs. By timing your offer acceptance you immediately got 12 more RSUs (40% more RSUs). It's worth noting that to do this properly you will need the recruiter to re-issue your offer in June, but it is possible to re-generate the offer with the new RSU price without special approvals, if you use the right approach.
We've helped negotiate with recruiters to delay our client's contract signing until the next month. It's super important to get the timing right to ensure you don't leave money on the table.
Amazon Performance Bonus
Yet another anomaly with Amazon compensation is their performance bonus. At most big tech companies, performance bonuses are relatively predictable.
For example, Google targets a 15% performance bonus for L5 software engineers, and ~85% of engineers receive at least that amount. However, this is not the case at Amazon.
If pressed, recruiters will eventually disclose that only a small percentage of top performers at Amazon receive a performance bonus. Most Amazon offer letters don't even include a section outlining the target performance bonus.
You should certainly factor in the target bonus at other companies when comparing competing offers against Amazon, if those companies are known for typically paying out their target bonus.
Amazon Stock Refreshers
Stock refreshers are also only offered infrequently at Amazon. Like all companies, they are dependent on your performance review.
While stock refreshers do exist at Amazon, they are fairly rare (especially at junior levels) and are typically a much lower dollar value compared to other big tech companies. Stock refreshers start to become better at senior levels (L7+), but they will still pale compared to the refreshers given at Facebook or Apple.
Industry Compensation Data
Moonchaser has helped negotiate a wide range of offers at Amazon. Candidates of course need to know the latest role-specific salary information like the Amazon data scientist salary or the Amazon technical program manager salary. However, it can also be useful to understand these salary trends at the industry level. Hence, Moonchaser has complied that data for different roles setting the senior (L5) level as the benchmark.
Remember, the data points above are industry wide, not specific to Amazon. There are many company specifics at play here. For example, Amazon software engineers and applied scientists are compensated quite competitively. However, an Amazon marketing salary (e.g. PMM), Amazon product design salary, and Amazon user research salary are all often below average.
Amazon Remote Work
Prior to the pandemic, Amazon was primarily an in-office culture. There were select exceptions where teams had a remote presence, but the majority of teams were in office.
The past two years Amazon has of course adopted more remote policies. To be competitive in the hiring market in late 2021, Amazon decided to give managers and org leaders the choice of whether they would allow remote work. Some managers have decided to keep their teams in-office, but others have fully embraced remote work and will allow you to work anywhere in the US or, at times, even abroad.
If working remotely is a priority for you, talk to your recruiter to find a team that is remote forward. Each recruiter at Amazon helps to recruit for multiple teams and will often have a team they can connect you with. If they don’t, then ask them if there is another recruiter they can put you in touch with.
Amazon Work Life Balance
It’s no secret that Amazon's not known for work life balance. However, Amazon has thousands of different teams. There are (contrary to popular belief) many teams with good work life balance and teams that provide flexibility for you to work your preferred hours. It is less common at Amazon (but not impossible) to find teams that are very relaxed - often dubbed as “rest and vest” teams.
- If you are looking to join a team that works less than 30 hours a week, it will be hard to find at Amazon and we wouldn’t recommend focusing your efforts on Amazon
- If you are looking to join a team that works an average 40-hour work week, there are many teams that will be a good fit and we wouldn’t recommend ruling out Amazon
- If you are focused on career progress and want to dedicate a large amount of your time to work, Amazon is an excellent fit as they promote quickly and provide their employees with outsized scope at senior levels
We would recommend having an honest conversation with your manager about team expectations and ensuring they align with your personal goals.
Amazon Job Offer Negotiation Process
This section will cover:
- Negotiation Process Overview
- Critical Mistakes to Avoid
- L4/L5/L6 Salary Negotiation Process
- Amazon Exec Negotiations
Salary Negotiation Process Overview
Candidates often find it helpful to have a high-level overview of the negotiation process. However, this does vary by candidate, with one key vector being seniority.
Since we are on the topic of levels, it's worth mentioning that Amazon does not follow the standard leveling conventions. Below is the mapping to Google and Facebook levels:
- Amazon L4 = Facebook/Google L3
- Amazon L5 = Facebook/Google L4
- Amazon L6 = Facebook/Google L5
- Amazon Leadership Levels - explained below
Most recruiters are fairly transparent about this. However, if you are discussing cross offers it's often helpful to just say "Facebook and Google have placed me at the senior software engineer level, Amazon L6", to avoid scenarios where the Amazon recruiter claims that Amazon L5 = Google L5, which is false.
If you have not yet received an Amazon offer letter, there are a few critical mistakes to avoid:
- Do not share your current compensation. In many states (e.g. California) it is illegal for companies to ask this, so you are certainly within your rights to say "I do not feel comfortable sharing that information".
- Do not share your compensation expectations during your interviews. Amazon recruiters will sometimes frame this as "seeing if you are a fit for the role". However, it is in your best interest to deflect this question until Amazon has extended a job offer. One possible response is "right now I'm focused on the interview process and don't have a number in mind, but I'm confident we will be able to get to a number that works for both of us."
With that out of the way, let's discuss the process for Amazon L4/L5/L6 tech employees.
- After finishing up your onsite, you will typically hear back from a recruiter within ~1 week
- A recruiter will reach out to set up a call. Often saying something along the lines of "I have some exciting news to share". This is the offer call
- On the offer call, the recruiter may push you for compensation expectations. But if properly deflected, at this level they are often willing to give an initial offer
- Amazon likes to move fast and will often push you to make a decision within a week
- We recommend you take time to digest the initial offer and consider the best point of leverage for your counter offer discussion
- You will then setup your second call with the recruiter to discuss the offer. On that call you will disclose your counter offer
- The recruiter will likely push back
- We build a tree diagram unique to your situation with the most likely objections and the optimal responses to those objections. The goal is to get the recruiter to take your counter-offer number back to the hiring manager + VP as needed
- Typically you will hear back in a few days with their "final" offer
Amazon Director Negotiations
So what should you do if you have an Amazon Director offer or an Amazon VP offer? Exec / leadership negotiations are actually quite different vs. L4-L6 negotiations at Amazon. This is partly because you have executive recruiters at Amazon that work exclusively with leaders (L7+) and have significantly more training and skill when approaching negotiations.
Additionally, many of the roles for Director and above are unique and will only have one single headcount open. As a result, there are many additional factors that matter when negotiating. The list is very situational, but factors like how long the role has been vacant and its importance to the overall org will help you optimize your negotiation. In leadership negotiations, more components and variables are up for negotiation. For example, in a recent Director negotiation that we worked on, we helped our client negotiate a custom employment contract. Many of our leadership negotiations have required sign-off by SVPs or in select cases even by Andy Jassy. Expect some delays for approvals when negotiating.
Amazon Exec Levels
We consider L7 the start of executive / leadership levels at Amazon. Both technical and non-technical roles follow a numeric system at Amazon. The titling will look different for non-technical roles and varies greatly, but here is an example for the manager track:
- L7: Senior Manager
- L8: Director
- L10: Vice President
- L11: Senior Vice President & Org CEOs
We should talk about this structure because it’s quite unique. At the L7 and L8 level you will see many different titles used. For example, many L7s who own the P&L in a biz-tech role (having both business and tech oversight) will use the title General Manager. When Amazon asks you to interview for a role, don’t be surprised if the title isn’t an industry-standard title. This makes it particularly important to confirm the level (title doesn’t actually mean much) with your recruiter. Recruiters at Amazon, unlike some other big tech companies, are usually forthcoming about the level you are being considered for.
You might also wonder why there is a jump from L8 to L10. Amazon, similar to Microsoft, skips levels to denote the noticeable step change from one level to another and the difficulties in reaching Vice President. However you would also think SVP would be a jump as it is even harder to promote from Vice President to Senior Vice President than Director to Vice President.
As in all leadership positions, not all roles are created equal. You can and will find L7s who report into other L7s and L8s who report into L8s and so on. At the SVP level, you will see SVPs who report into major unit heads (i.e. org level CEOs). There are only a few org CEOs at Amazon and one of the most notable is Adam Selipsky who leads AWS.
For individual contributors in engineering the titling looks a bit different:
- L7: Principal Engineer
- L8: Senior Principal Engineer
- L10: Distinguished Engineer
It’s of course extremely hard to reach Principal Engineer (PE) at Amazon. Although hiring velocity changes, Amazon normally only hires 100-200 Principal Engineers across the entire company. The positions are very coveted. One of the perks of being a Principal Engineer at Amazon is you get to join the internal L7 only network of Principal Engineers - a community that will help you learn and grow as a leader.
As you can imagine, with a limited number of Principal Engineering hires at Amazon, there are even fewer openings for Senior Principal Engineers or Distinguished Engineers. Most employees at this level have spent years at Amazon and have been promoted to these roles. Distinguished Engineer is often a designation or badge that you can keep with you even if you transition to management. For example, there are VPs who are also simultaneously Distinguished Engineers.
Amazon General Manager Salary
The compensation structure for most leadership roles (GM and above) has some of the same components we discussed previously.
- Base salary which still caps at $350K per year
- First and second year signing bonus
- RSUs that vest at a 5/15/40/40 schedule
- Refreshers which are role, level, stock price and performance dependent. All executive roles have materially better refreshers than lower levels (more on that below)
Amazon has 4 general pillars when it comes to executive compensation:
“ First, our compensation program is designed to attract and retain the highest caliber employees by providing above industry-average compensation assuming stock price performance. Second, our compensation program provides strong long-term incentives to align our employees’ interests with our shareholders’ interests. Third, our compensation program emphasizes performance and potential to contribute to our long-term success as a basis for compensation increases, as opposed to rewarding solely for length of service.
Finally, our compensation program reinforces and reflects our core values, including customer obsession, innovation, bias for action, acting like owners and thinking long term, a high hiring bar, and frugality.”
Refreshers for senior leaders at Amazon come in two forms: yearly scheduled refreshers or ad-hoc refreshers. Over the last year, Amazon has given many ad-hoc grants in their “dive-and-save” program which allows managers to attempt to match competing offers and retain talent who plan to leave. For very senior executives, we’ve seen $15M refresher grants (vested over multiple years) but each exceptionally large refresher plan is fully customized to the individual (not tied to the level).
Exec level negotiations have unique challenges. For example, you can expect recruiters to push you (many times) for your expectations and for a first number. They will say something like “we don’t want to go back and forth, just give us one number to target”. This sounds good at first, but it's actually very important to navigate this conversation with care. In the vast majority of situations, you want to decline sharing a number and have Amazon put together a first offer. Amazon will insist multiple times so you need to come to the conversation prepared on how to flip them to give a first offer.
Amazon-Specific Negotiation Advice
Negotiating at Amazon isn't easy. There are many videos and articles outlining unsuccessful Amazon salary negotiations.
To avoid that situation, here are some important pieces of information to keep in mind when negotiating your Amazon compensation. However, every negotiation has its unique elements depending on the specific situation. For 1:1 advice, feel free to reach out to our negotiation team, and we'll see if we can help.
How to Negotiate Amazon Offers - The Secrets You Need to Know
- Your Hiring Location Matters
- Amazon’s Hiring Process Moves Fast
- Hiring Managers Will Negotiate
- Amazon Offers Poor Benefits
- Ask for Specific Yearly Compensation
- Amazon Will Go Above Band
Your Hiring Location Matters
Amazon tier 1 compensation bands are for San Francisco and New York. Amazon tier 2 compensation bands are Seattle and southern California (incl. Los Angeles and San Diego). Amazon has many region specific pay policies and bands so be careful to take them into account.
Amazon’s Hiring Process Moves Fast
Out of all the big tech companies, Amazon moves the most quickly through the negotiation stages outlined in the previous section. This can be both a blessing and a curse.
If you have unfinished interviews, we recommend letting those companies know that Amazon is extending you an offer as soon you hear from Amazon (other companies will know to accelerate their interview timelines).
Another tactic is to break up the Amazon negotiation into multiple steps:
- Receiving initial offer call
- Hiring manager discussion
- Counter offer call
- Receiving counter offer response
- Final discussions
- Any additional steps (e.g. immigration)
Stagger these over the course of a few weeks if you need to buy yourself more time.
Hiring Managers Can Negotiate
This isn't always the case, but it is certainly more frequent at Amazon that the recruiter will bring the hiring manager into the negotiation.
It helps if you already have a relationship with your manager from the interview process. If not, it's worth building that relationship during the post-interview phase.
While this can sound scary at first (negotiating with your future boss!), we've actually seen it work in the candidates favor in many situations because you no longer need to relay messages through a third-party (the recruiter) and can build rapport with the decision maker.
Amazon Offers Poor Benefits
This is true for vacation, 401K, and many other benefits. It is worth asking about these and highlighting the gap vs. other companies, especially if you have a competing offer.
For example, Amazon only offers 2 weeks of vacation (even for senior roles). That said, it is nearly impossible to negotiate a change in benefits into your contract.
The reason to bring this up is as leverage to increase your total compensation. Also, it's worth noting that a senior level many managers will informally allow their reports to take more than 2 weeks of vacation.
Ask For Specific Yearly Compensation
In order to avoid scenarios where your yearly compensation decreases specifically in year 3 and 4 (which is very common at Amazon), we recommend telling the recruiter that your target number (e.g. $350K) is yearly compensation and that in order to compare apples-to-apples you can't factor in stock appreciation when comparing between other offers.
It is very difficult to get Amazon to adjust their compensation structure, but we have seen many cases where with the correct wording the recruiter brings back a better offer to make up for the difference.
Amazon Can Go Above Band
This is still rare, but more frequent than at any other tech companies. To be clear, going above band means the company gets VP approval to give an offer that is above the stipulated range for the role/level/geography.
This is another reason why it's certainly worth your while to negotiate at Amazon because the delta can be huge between initial and final offer