Comment by Barracoon

Amazon comp is based on your annual performance review (OLR) and your pay band (level + job family). OLR has 5 tiers: least effective, highly valued 1-3, and top tier. Each of those tiers determines your band penetration.

Lets say your pay band is 100-200k. A new hire is theoretically better than 50% of their team, so they join at an HV3 and make 180k. If they receive HV3 at OLR, their total comp target (TCT) remains 180k. If it is their first OLR, they are probably not getting any additional RSUs because the cash-based comp of the first 2 years means they are already at their TCT.

If they made TT, their TCT goes to 200k and they would receive additional RSUs to reach that pay.

If they were HV2 or below, they would not get additional RSUs and their TC would slowly fall from 180k to 160k or below. If it fell below the HV2 level of 160k they would get some RSUs later to bump them back to TCT.

Amazon also assumes the stock will go up 15% year over year, so when RSUs are granted over a multiyear time horizon, you receive less based on assumed growth that would make you reach your TCT.