HACKER Q&A
📣 chrisBob

Bonus/Equity beyond year 4 in a tech job?


I am beginning a job search and I don't understand typical compensation in years 5 to N. Everything I read talks about offers covering the first 4 years and laying out the base + bonus + equity during those years. What is normal for anyone after year 4?

Does compensation continue at the year 4 level until your next raise?

Do you take a massive pay cut in year 5?

Has anyone ever stayed at a tech company for more than 4 years to find out?


  👤 drewg123 Accepted Answer ✓
When I was at Google (2013->15), each we would receive equity in the form of GSUs which vested at 25% per year over four years. The idea was that each year you would get a new grant, and you would reach maximum income in year 4, when you had 4 grants vesting simultaneously.

In year 5, your initial grant would have expired, but your new grants would be vesting, so you would continue with 4 GSU grants vesting simultaneously, and you would stay at the same income (or better, or worse, depending on the size of your grants, the value of the stock, etc).

The idea is that your salary would be ~50% or less of your total compensation, once you factored in the GSU stock grants and the yearly bonus. It was so complex there was an internal HR site (go/totalcomp ?) that would try to break down your compensation.

The process is designed so that you reach "max" income in year 4 which does not substantially decrease, thus locking you in. Because if you left, it would take 4 years of tenure at the new company before you built up 4 simultaneously vesting grants.

All this is assuming you meet or exceed performance targets.

Frankly, I far prefer Netflix, where they just pay you every 2 weeks, and you're not waiting for grants to vest, or for yearly bonuses.


👤 quantumofalpha
Depends on company, but most of those with RSUs generally give you every year refresher grants, each with another 4 year vesting schedule, so long as they are happy with your performance. Thus, if your initial grant was G0 shares, and refreshers each year are G_i, at each year you'd vest G0/4, (G0+G1)/4, (G0+G1+G2)/4, (G0+G1+G2+G3)/4, (G1+G2+G3+G4)/4, (G2+G3+G4+G5)/4, ... shares.

Note the so called "cliff" after year 4, it's your cue to look for a new job. Especially if your initial grant was relatively large compared to refreshers as is often the case, but stock did not perform too well to compensate for it.

Size of refresher grants depends on your level, review and stock performance - company usually has some target $ amounts in mind for them.


👤 ahmali86
If you are meeting performance, you are generally have been promoted in 4 years and give a refresh of equity.