Today I’d like to share a case study of a software engineer who had received offers from both Amazon and Microsoft. This case study is based on proprietary data I have collected. I have changed the numbers slightly to protect confidentiality, but the data are consistent with multiple offers I have seen.
- Job title: Software Development Engineer 2 (SDE 2)
- Base salary: $150,000
- Sign-on bonus: $50,000 ($28,000 year 1, $22,000 year 2)
- Restricted Stock Units (RSUs): $85,000 worth of stocks, vested 5%, 15%, 40%, 50% over 4 years
- Job title: Senior Software Engineer
- Base salary: $145,000
- Sign-on bonus: $30,000
- Stock: $20,000 worth of stock vested over 5 years
- Performance base bonus: 0 – 30%
The table below compares the total compensation. For Microsoft, because its performance bonus target is 0-30%, I have calculated 3 scenarios: no performance bonus, 15% bonus, and 30% bonus.
- With Amazon, your totally compensation is essentially locked in for the next 4 years. Amazon does not offer performance based bonus. It does give you additional stock grants based on your performance, but the vesting schedule will be further out.
- For the average scenario, Amazon’s total 4-year compensation of $735,000 is only slightly better than Microsoft’s $715,000. By the way, Microsoft also provides much better employee benefits. Financially, these two offers are comparable. I’d focus more on job responsibilities, opportunity for growth, and quality of people I’ll work with.
- Microsoft’s performance based bonus (0-30%) provides a little bit more potential upside. However, Amazon’s stock price might have more room for growth (although Microsoft stock has been doing well lately.)
Are you interested in joining Amazon or Microsoft? Or you have amazon or Microsoft interviews scheduled in the next few weeks? I have been offering 1-on-1 interviewing coaching since 2008. Email me (email@example.com to set up FREE 15-minutes initial consultation.) Or you can sign up via my coaching page.