The Anatomy of an Amazon Level 7 Job Offer

Amazon has a very flat organization structure. Level 7 is mid-to-senior level at Amazon. I have known plenty of CTOs, VPs, and directors at other companies who ended up at Level 7 at Amazon. It’s what I call “job title deflation at Amazon.” However, the pay at level 7 is very competitive. Today I’d like to share with you the anatomy of a level 7 job offer. Note: I have changed the exact numbers slightly to protect confidentiality. 

  • Level: 7
  • Job Title: Principal Software Development Engineer (Principal SDE)
  • Base Salary: $160,000
  • Sign-on bonus year 1: $400,000
  • Sign-on bonus year 2: $300,000
  • Restricted Stock Units (RSUs): $1,000,000 worth of Restricted Stock Units. The $1M number is calculated using AMZN stock price at time of signing recently
  • RSU vesting schedule: 5%, 15%, 40%, 40%


The table below summarizes the total compensation for year 1 to 4:

Observations:

  • You might wonder why the base salary is so low. This is an “Amazon tradition”. Amazon Seattle has a base salary ceiling around $160K, while Amazon offices in higher cost-living areas such as Bay Area and NYC might have slightly higher base salary ceilings (e.g. around $185K). However, Amazon’s generous sign-on bonus and RSUs more than make up for the low base salary.
  • The Principal Engineer role is very senior for technical talents who are on the Individual contributor track. Because Amazon stock is likely to appreciate quite a bit in the next few years, the value of the RSUs are likely to go up by year 3 and year 4. So, the total compensation for year 3 and year 4 are likely to be much higher than the $560,000 number which is calculated based on the current market price of Amazon stock.
  • Most startups will not be able to compete with these numbers. Startups can offer a lot more RSUs or stock options. The problem is that startup equity has very little liquidity. Employees need to wait for IPO or M&A activity to make money from their equity. Compared to the inherent risk of startups, unless one has absolute conviction about the startup and has enough skin in the game, most people should take the offers from Amazon/Google/Facebook/Microsoft. The opportunity cost of noting accepting a rich offer from these companies are high in most cases.
  • Amazon recruiters are very bad at identifying candidates for level 7 positions. It is not uncommon for them to reach out to candidates who are under-qualified or overqualified. Level 7 positions tend to have a very wide range in total compensation and job responsibilities. If you’re contacted by an Amazon recruiter for a level 7 position, you should carefully assess if it’s the right level for you. Otherwise, you might waste a long interview loops and have to go through a second interview loop for a lower or higher position. 

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