- Amazon has had a hard time retaining talent through its restricted stock units (RSUs).
- According to annual filings, the company continues to have a high amount of stock forfeitures.
It was through an internal leak that Monique found out she was among the group of employees being laid off from Amazon in April. Having had time to go through some of the stages of grief, like anger, denial, and depression, Monique, who works in human resources, said she was in the acceptance phase when the company emailed her at 7:00a.m. one day that her role was eliminated.
Monique joined the 27,000 workers Amazon announced it would cut earlier this year.
Monique, who asked for Insider not to use her real name for fear of retaliation, said she hadn't planned to stay with Amazon for much longer anyway.
"Amazon's benefits just don't really measure up to the other tech companies," she said. "This last round of compensation reviews wasn't very lucrative because of everything that's going on at Amazon and I'm looking to make more money."
Amazon's compensation package, which includes a base pay of cash and employee stock, has clearly been enough to attract new talent. But it isn't necessarily enough to keep them around. Employees are taking the cash and leaving most of their stock behind for greener pastures, according to Insider analysis of annual filings. The number of employee stock units Amazon expects to cancel every year because of workers leaving before they can fully vest remains higher than other technology companies.
Experts say that is a hidden sign of high turnover and employee dissatisfaction with benefits and perks.
Meta, Microsoft, Alphabet, and Apple have had forfeiture rates under 8% from 2019 to 2022, with a few companies being as low as or lower than 3%, according to Insider's analysis. The Information reported in 2018 similar rates. All four companies declined to comment or didn't respond to request for comment.
For the past three years, Amazon has had a consistently high percentage of forfeited restricted stock units — around 27%.
An Amazon spokesperson said historical forfeiture experience and employee level are factored in when predicting how many people will give up their stock that year.
By the end of last year, Amazon had 45 million forfeited stock units, equating to a value of around $10 billion being left on the table.
Employees are sending Amazon a clear signal
Attrition is a normal part of any business, but any forfeiture rate above 15% is high, and a high forfeiture rate is a clear indication of high turnover, according to PwC's workforce transformation practice leader Anthony Abbatiello.
"In many cases, forfeitures are an overlooked signal that employees are sending to their employers," he said.
The signal may mean the vesting periods are too long, performance hurdles may be too high, or employees don't value the RSUs as much as other benefits and perks. It can also mean employees are finding greener pastures elsewhere, he added.
In Monique's case, she thinks the RSUs are more of a benefit to Amazon than to employees.
"Their new-hire stock grant doesn't start heavily vesting until after the second year," she said. "It feels very focused on saving them money rather than attracting and retaining strong talent."
Employee stock awards vest every four years: 5% the first year, 15% the second year, and the remaining 80% begin to vest in the third year. But for employees who are breadwinners of their family, like Monique, that kind of vesting schedule makes it hard for employees to stick around even if they love their job and coworkers.
Monique was with the company for three years and walked away with 40% of the stock units granted to her when she was hired. Any forfeited or canceled stock is absorbed back into the company and usually reissued to new hires. This helps to reduce the amount of new stock issued and the dilution of company stock.
Is it the benefits and perks or is it the working conditions?
Dan Walters, vice president and director of specialty compensation consulting at FutureSense, told Insider that "something is flawed if your long-term retention tool is not retaining people long-term."
Amazon has been struggling to strike the right balance with its employee compensation packages. It issued a substantial number of restricted stock units over the past three years to make up for its sinking stock price as it competed for talent during the Great Resignation. And earlier this year, it announced that it was reversing that for 2025 and offering more cash compensation to combat a potentially low stock value in the future.
An Amazon spokesperson told Insider that its compensation model, which is tied to the company's long-term performance, is "intended to encourage employees to think like owners." And those who stay for prolonged periods stand to benefit the most.
But the company has had an exodus of employees at multiple levels prior to layoffs taking place.
Insider previously reported that workers have referred to the company as a notoriously demanding employer because of its long hours and tough working conditions.
"Are they really trying to retain people long-term or is it just a nice patch they put on things, knowing that people are going to leave anyways and they'll get the shares back and give them to the next person," said Walters.