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With Google doing front loading(33/33/22/11) and other companies also shifting away from conventional 25% per year vesting to make first few years more attracti

With Google doing front loading(33/33/22/11) and other companies also shifting away from conventional 25% per year vesting to make first few years more attractive, they gotta catch up to stay competitive. Uber recently did the same of removing cliff.

breck 5y ago
Do you have a link for Uber dropping the cliff? I didn't know they did that.
B-Con 5y ago
Source on Google doing front loading?
- thebean11 5y ago
  I don't have a link, but seen this on Blind quite a bit
- etxm 5y ago
  I had an offer in December that was 33/33/22/11
- Cyph0n 5y ago
  I joined last month and can confirm this.
thebean11 5y ago
Ehh, aren't the front loaded grants smaller in total? I don't see front loading as a good thing necessarily.
readams 5y ago
The Google front loading is because you'll get annual refresher grants after the first year (and no "big refresh" after four years), and it makes the total comp more even overall as a result.
- chris11 5y ago
  I'm not convinced. A salary drop from a cliff isn't great, but cliffs are overall good for employees. A front loaded offer arrives at that even comp by baking future stock growth into the offer. A normal four year equity grant arrives at even comp with no movement on equity. I'd much rather have a normal grant and get a cliff if the company does really well.
  - joshuamorton 5y ago
    I think you're misunderstanding something. The Google offer hasn't changed at all[1], in terms of overall dollars provided. The distribution of the same dollars has changed. I'll illustrate with a relatively concrete example. A recent graduate joins Google on December 31[1] of this year, and gets a 100K initial grant ('22-'25). They then follow an above-average performance trajectory over the next few years, getting refresh grants of 40K ('23-'26), 60K ('24-'27), 80K ('25-'28) and 100K ('26-39'). So in 2022, they'll vest 25K. In 2023, they'll vest 25+10=35K, in 2024 they'll vest 25 + 10 + 15 = 50K. In 2025 they'll vest 25+10+15+20=70K. In 2026 they'll vest...also 70K. And that's assuming a feasible but above-average performance trajectory[2]. If performance is lower, even modeled stock compensation will actually take a dip in year 5. If you instead take the same total numbers, but frontload the initial vest, you get something like 33, 43, 47, 57, 70 vs the original 25, 35, 50, 70, 70. Its 250K in stock over 5 years either way, but in the second case you don't ever feel like your compensation has flatlined. [1]: Ok this isn't precisely true, it's gone down, but it went down a few years ago when Google removed the cliff, not when they changed the vesting schedule. For this example, I'll use the trick of assuming they join in December 31, because this ignores the decrease in comp that came as a result of not getting first-year equity refreshes. [2]: Also note that take-home pay will be lower in 2026 than in 2025, because the 2025 shares are plurality from 2021's vest, with 4 years of growth, while the 2026 shares are plurality from 2026's vest, so less growth.
    - chris11 5y ago
      I'm not saying Google makes horrible offers, but I'm not sure how their recruiters marketing matches up with their internal calculations of target comp. I have read complaints on blind that Google is using it to show higher first year offers or to compete with other offers. 100k with frontloaded vesting at (33/33/22/11) is much better than 100k vesting at 25% a year. But 100k frontloaded wouldn't equal 132k vesting at 25%, only the first year would be equal. So that answer would not be sufficient if I had a competing grant at 132k, and was worried a second year comp drop. It may be true that Google gives really good refreshers and my above average performance will increase my comp. But I think of that like depending on a percent bonus, it's less reliable than base and my initial equity grant. And if I start using refreshers, raises, and stock growth with Google, I should also use it when looking at competing offers. > you don't ever feel like your compensation has flatlined. Emotionally that may feel bad, but I think it's caused by employees getting lucky. I don't think it's a problem that needs to be solved. 1) It's objectively bad if I have a cliff because my employer hasn't increased my comp as my market value increases. I should probably look for a new job. 2) It's objectively good if my cliff is because the value of my initial grant exploded. The drop will be bad. But if it's such a noticeable difference I'm probably sitting on hundreds of thousands or even millions of dollars in profit from my initial grant.

breck 5y ago

Do you have a link for Uber dropping the cliff? I didn't know they did that.

B-Con 5y ago

Source on Google doing front loading?

thebean11 5y ago
I don't have a link, but seen this on Blind quite a bit
etxm 5y ago
I had an offer in December that was 33/33/22/11
Cyph0n 5y ago
I joined last month and can confirm this.

thebean11 5y ago

Ehh, aren't the front loaded grants smaller in total? I don't see front loading as a good thing necessarily.

readams 5y ago

The Google front loading is because you'll get annual refresher grants after the first year (and no "big refresh" after four years), and it makes the total comp more even overall as a result.

chris11 5y ago
I'm not convinced. A salary drop from a cliff isn't great, but cliffs are overall good for employees. A front loaded offer arrives at that even comp by baking future stock growth into the offer. A normal four year equity grant arrives at even comp with no movement on equity. I'd much rather have a normal grant and get a cliff if the company does really well.
- joshuamorton 5y ago
  I think you're misunderstanding something. The Google offer hasn't changed at all[1], in terms of overall dollars provided. The distribution of the same dollars has changed. I'll illustrate with a relatively concrete example. A recent graduate joins Google on December 31[1] of this year, and gets a 100K initial grant ('22-'25). They then follow an above-average performance trajectory over the next few years, getting refresh grants of 40K ('23-'26), 60K ('24-'27), 80K ('25-'28) and 100K ('26-39'). So in 2022, they'll vest 25K. In 2023, they'll vest 25+10=35K, in 2024 they'll vest 25 + 10 + 15 = 50K. In 2025 they'll vest 25+10+15+20=70K. In 2026 they'll vest...also 70K. And that's assuming a feasible but above-average performance trajectory[2]. If performance is lower, even modeled stock compensation will actually take a dip in year 5. If you instead take the same total numbers, but frontload the initial vest, you get something like 33, 43, 47, 57, 70 vs the original 25, 35, 50, 70, 70. Its 250K in stock over 5 years either way, but in the second case you don't ever feel like your compensation has flatlined. [1]: Ok this isn't precisely true, it's gone down, but it went down a few years ago when Google removed the cliff, not when they changed the vesting schedule. For this example, I'll use the trick of assuming they join in December 31, because this ignores the decrease in comp that came as a result of not getting first-year equity refreshes. [2]: Also note that take-home pay will be lower in 2026 than in 2025, because the 2025 shares are plurality from 2021's vest, with 4 years of growth, while the 2026 shares are plurality from 2026's vest, so less growth.
  - chris11 5y ago
    I'm not saying Google makes horrible offers, but I'm not sure how their recruiters marketing matches up with their internal calculations of target comp. I have read complaints on blind that Google is using it to show higher first year offers or to compete with other offers. 100k with frontloaded vesting at (33/33/22/11) is much better than 100k vesting at 25% a year. But 100k frontloaded wouldn't equal 132k vesting at 25%, only the first year would be equal. So that answer would not be sufficient if I had a competing grant at 132k, and was worried a second year comp drop. It may be true that Google gives really good refreshers and my above average performance will increase my comp. But I think of that like depending on a percent bonus, it's less reliable than base and my initial equity grant. And if I start using refreshers, raises, and stock growth with Google, I should also use it when looking at competing offers. > you don't ever feel like your compensation has flatlined. Emotionally that may feel bad, but I think it's caused by employees getting lucky. I don't think it's a problem that needs to be solved. 1) It's objectively bad if I have a cliff because my employer hasn't increased my comp as my market value increases. I should probably look for a new job. 2) It's objectively good if my cliff is because the value of my initial grant exploded. The drop will be bad. But if it's such a noticeable difference I'm probably sitting on hundreds of thousands or even millions of dollars in profit from my initial grant.