Hello, my name is Karan Patel and I’m a part-time Product Mentor at Pathrise. I have a background in engineering, product design, and business, which I’ve combined to build new products as a product manager and a senior technical product manager at Amazon Web Services. I currently run my own product consulting business and also guide fellows at Pathrise through industry advice, interview preparation, and negotiation support.
Before the Interview
Three key factors will impact your final compensation before you even begin salary negotiations:
- Job family and role: Similar to other tech companies, total compensation at Amazon varies depending on the job family (technical, non-technical, operations, etc) and the role (software engineer, product manager, program manager, data scientist, etc). Technical job families are paid the highest, followed by non-technical corporate job families, and finally operations job families. You can take a look at Amazon’s business categories and job categories to learn more about each.
- Job level: All roles at Amazon have an associated level. For new candidates joining the company, the level is typically determined by years of relevant work experience and how well you perform during interviews. Corporate roles typically begin at level 4. Level 6 roles are considered senior roles, level 7 roles are principal or senior manager roles, and level 8 roles are director-level. Each level has a well-defined set of calibrated expectations that you will be evaluated against. For example, Level 4 candidates are expected to deliver independently on projects with defined strategies, whereas level 5 candidates may also be required to define project strategy.
- Location: The highest Amazon compensation bands are for the San Francisco Bay area and New York City. The second highest are Seattle and southern California (including the Los Angeles and San Diego metro areas). Compensation bands are loosely based on the cost of living in the surrounding area.
Recruiters will help you identify target roles (job family, function, and level) that best fit your experience. Discuss your intended level before the interview process! Your level cannot be negotiated once interviews are completed. The recruiter will gather your information to help you find roles within Amazon, so highlight experience and skills to be considered for specific roles. Your Amazon salary negotiation strategies will vary based on your job family and experience level.
This dialogue with your recruiter helps you avoid roles that require a higher level of technical depth or experience than what you have. Poor performance for a job you are not qualified for could result in a flat no or your application getting leveled down. It is much better to excel in an interview and negotiate from there than to try and land a higher-paying job at a position whose qualifications you haven’t quite met.
Amazon Compensation Model
Amazon, like most other tech companies, has three components to their total compensation. Understanding their compensation model puts you in a better position for salary negotiation. Amazon’s package is unique because it is designed to both attract and retain talent for at least four years. The components of their compensation model are:
- Base salary: This is your standard base salary. There are no scheduled raises over the four years, however, there is an annual performance-based increase of as high as 10%.
- Sign-on bonus: This is intended to entice new employees and is paid out over two years. The first-year bonus is typically higher and is paid as a lump sum with your first paycheck. The second-year bonus is paid out divided equally over 12 months. During Amazon salary negotiation, the sign-on bonus is often the most flexible piece of the compensatory pie.
- Restricted stock units (RSUs): These are stocks awarded on a defined vesting schedule over four years. Amazon’s vesting schedule is significantly back-loaded (incentivizing employee retention): 5% at the end of the first year, 15% at the end of the second year, and 20% every six months after that. This will typically be presented in the offer letter as the total number of RSUs being awarded over the four years. Amazon offers focus on the number of shares and assumes that stocks appreciate by 15% every year. Additional stock is awarded each year based on performance and when you get promoted. Negotiating RSUs at Amazon is risky. We recommend keeping your counteroffer as a general total compensation, rather than asking for one specific piece.
Your offer letter will include your total project compensation for the first year by adding your base salary, the first-year sign-on bonus, and the first year (5%) of the RSUs. Here is an example of what total compensation could look like projected over the four years:
Before your Amazon salary negotiation, we recommend charting out your earnings to better compare them with other offers. The total compensation for the third and fourth years may be less than the prior years depending on the sign-on bonus and RSU value.
In late 2021, Amazon changed its remote work policy to allow directors of each team the choice of their team’s working style (either remote or hybrid). You should tailor your salary negotiations to the location and working style of your position. Check with your recruiter on the specific details of the roles you are interested in. Roles requiring relocation will also include a relocation package with two options: a full-service package or a lump sum paid upfront once you start relocating.
Other Amazon benefits are standard across all employees and can be found here.
Amazon Salary Negotiation Process and Tips
Before you begin interviewing, recruiters will typically ask you for your salary history or your salary expectations. Do not tell them your current salary or salary history. In many states (such as California) it is illegal for companies to ask for this. If they ask about your salary expectations, you can deflect the question until after an offer has been extended to avoid anchoring your offer at a lower number. To gauge potential ranges and have a number in mind, you can use a website like levels.fyi for research. You can see the breakdown of base salary, signing bonus, and RSUs to better prepare you for Amazon salary negotiation.
Once you have completed your interviews, you can expect to hear back from the recruiter within five business days. They will reach out with a short email to set up a call where they will share the initial verbal offer, followed up by a written email. Amazon moves fast on the recruiting process and will push you to decide within a week.
Ask clarifying questions on the first call to make sure you understand the offer. Take some time, think about it, and plan a second call with your recruiter to discuss a counteroffer. This is where all of your Amazon salary negotiation strategies should unfold. Back up your salary negotiation with concrete reasons and skills and speak with confidence. They may question your reasoning, so prepare yourself to answer relevant questions.
You will hear back from the recruiter in a few days with their final offer. The Amazon process moves quickly once you hear from them about the offer, so I also recommend letting any other companies you may be interviewing with know that Amazon is extending you an offer as soon as you hear from the recruiter.
Once you have your initial call with the recruiter, there are a few tactics I recommend that will help give you more time (if needed) and better leverage for Amazon salary negotiation:
- You can ask to speak with the hiring manager before the counteroffer call. To ask more detailed questions about the role or bring up negotiation points outside of compensation itself.
- If you received an offer at a lower level you can talk about your manager’s plan to help you get promoted. You can also negotiate items other than salary, like your start date, taking an extended leave for a planned trip, or flexible working hours to accommodate personal constraints.
- When discussing the counteroffer with the recruiter, be prepared with examples and data to justify increased compensation. This is a good time to talk about offers from other companies or any relevant industry experience. If possible, present your counteroffer as a total yearly compensation to give the hiring team some flexibility in allocating it across the three compensation components.
Amazon salary negotiations are daunting, but with the right preparation and practice, you can ace your interviews and bump your offer up to get paid what you deserve. Amazon splits its four-year compensation package into three parts, and understanding each part is key to salary negotiations at Amazon. If you make any mistake or don’t understand how the process works you run the risk of locking yourself out of any negotiations or the ability to make a counteroffer. Don’t leave money on the table. Pathrise can connect you to an experienced professional for one-on-one negotiation support and help you get a 10-20% increase in salary on average. Learn more and connect with a Negotiation Consultant here.