Tech workers at companies like Amazon, Uber, and Block are seeing up to $400,000 vanish from their compensation as stocks continue to plunge

Big Tech's penchant for luring top talent with stock coupled with the latest market volatility has sent some employees' total compensation spiraling.

In recent years, engineers and other tech workers have been recruited to Big Tech Firms with offers that include large chunks of equity known as restricted stock units, or RSUs. The value of the award is frequently determined by the market price on the day they are given. This can make for some large, compelling offers when tech stocks are skyrocketing.

But now the market has crashed, decimating many tech workers' salaries and costing some hundreds of thousands in compensation.

"I think it used to be super reliable joining a large company that the RSUs were at least worth what they said they would be worth and hopefully more," an Uber employee told Insider. "Seems like the new thinking is they're probably not going to be worth anywhere close to what they are at grant, so you should probably plan like you don't have that money."

Some companies have rushed to retain employees by issuing millions of more shares to level out their compensation. However, not all companies take this route since it dilutes current stockholders and often prompts investors to publicly express their dissatisfaction.

As a result, employees at companies like Amazon, Uber, and Block (formerly known as Square) told Insider they've seen more than two-thirds of their total compensation vanish. Additionally, they said the crash impacts their retention, with some adding that this makes for the perfect time to jump ship for a new company. 

"It has definitely reduced my stickiness to the job," a Block employee said. "There's far less to lose if I were to leave to a competing offer somewhere else."

The employees requested to remain anonymous because they're not authorized to speak to the press, but their identities are known to Insider.

Nearly half a million dollars vanishing from compensation

Since tech employees tend to receive high offers, the losses are equally large if they've accepted an offer that is equity-heavy.

Amazon is the most well-known example of offering equity-heavy compensation. According to regulatory papers seen by Insider, the business awarded 1.4 million RSUs in the first quarter of this year, more than twice the number issued in the same period of 2021. Recently, Amazon shares lost nearly all of their pandemic gains, which has resulted in massive losses for employees hired at its peak.

An employee at Amazon, who's been working there less than a year, told Insider he's lost over $250,000 in total compensation due to the stock dip.

"My fundamental issue is that the way Amazon puts together compensation plans is in no way designed to be beneficial for the employees," the employee told Insider.

Uber has been hit equally hard. The firm faced a $5.9 billion loss last week after it released its first-quarter earnings, and Uber CEO Dara Khosrowshahi told employees the firm will begin to "treat hiring as a privilege" as the company aims to cut costs.

One Uber employee told Insider their initial offer included roughly $178,000 in RSUs, which were granted at a market price of $60.64. Today, Uber is trading at $23.11 a share, which means the current value of the employee's RSUs has plummeted to just $67,836.

"I have never been used to relying on that RSU money," the Uber employee said. "But I could see how a lot of people have maybe been living on that compensation now have the rug pulled out from under them and could be in trouble."

Similarly, one Block employee told Insider he was granted $250,000 in RSUs at a market price of $234. At the time of writing, Block is trading at $73 a share, which makes his equity worth roughly $78,000 today. Another Block employee was also awarded his options at roughly $200 a share and has lost a whopping $400,000 in total compensation.

"It's definitely a tough pill to swallow," one Block employee told Insider. "It is somewhat deflating to look at the numbers so I try not to."

Since the employees still make good money, they don't want to come off as complaining. More so, it's the uncertainty that's the issue. The Uber employee pointed out that many people have mortgages and families to support under the assumption they'd be making the amount they were offered.

"It's hard to plan your life around unpredictable compensation," they said. 

Some tech employees might look to jump ship

The plummeting stock prices present a low bar for competing offers at rival companies, and many might look to jump ship. In fact, some insiders said this might be the best time to defect to a new company if you can find a decent offer.

"If you can get a new job, it's actually a good time to do it because getting a huge grant when the stock is low has a lot of upside," an Uber employee said.

This could prove beneficial for tech firms who aren't as equity-heavy with their offers, as spiraling stocks prove that this compensation model might be completely unsustainable.

"Even if you like the company, and even if you like your job, and even if you negotiated a great compensation plan, something that is as completely out of your control as the stock price can end up making it a place that you can't stay for more than two years," an Amazon employee said. "There's something fundamentally broken there."

Source: Business Insider.

The rise of Crypto Funds: Why hedge funds are turning to cryptocurrency

Cryptocurrencies like Bitcoin have dominated the news cycle for years now. 

The reception they get is a mixed bag - with tales of both exponential returns and devastating losses. By now, it’s likely that even your mom knows about the person who’s spent the last decade trying to find the harddrive worth millions of dollars in BTC. 

Despite the volatility of crypto markets, many hedge funds now invest heavily in the development of Crypto Funds. This marks a sea change following many years of well-known hedge fund founders and senior execs stepping up to spread anti-crypto sentiment. 

So what’s changed? Why are crypto markets shaping up to be a hotbed of hedge fund investment and trading activity? Let’s take a look.

First mover advantage

Despite crypto funds feeling like a recent phenomenon, the first hedge fund that ventured 

But Morehead was way ahead of the pack, and interest in Crypto Funds didn’t peak until a few years ago. According to the 2020 PWC Crypto Hedge Fund Report, the majority of crypto hedge funds were opened during or after 2018, a full 5 years after Morehead’s initial venture.  

Rising popularity of crypto hedge funds

Cryptocurrencies have captured the public interest because they allow almost anyone to enter into the world of asset trading. But that doesn’t explain why large-sum investors like hedge funds have developed an interest in this unregulated and often unpredictable market.

It goes without saying that the appetite to get involved is impacted by the many accounts of sharp rises in value. BTC isn’t the only crypto asset to experience value increase percentiles in the thousand - other popular cryptocurrencies like Ethereum and XRP have similar stories to tell.

Media hype around crypto gains and losses is focused on the tendency towards huge short term value fluctuations. But hedge funds don’t think short-term. Long term, high-growth investments are highly sought after.

And despite what the news cycle might say, crypto is proving to deliver on that front. Take Ether (ETH), the native Ethereum token. Since being valued at $0.311 on launch in 2015, late 2021 saw the cost of a single ETH reach as high as $4800 in late 2021, with this predicted to increase again in 2022.

Cryptocurrencies haven’t been particularly well understood in the past, even by leading hedge funds. It’s a different picture in 2022 as analysis around the year-on-year gains of cryptocurrencies continues to build. 

Hedge funds were wrong about cryptocurrencies

Increased understanding is probably the main driver towards the changing attitude hedge funds have to cryptocurrency. To quote Ken Griffin, the founder of leading hedge fund Citadel, in 2021:

 “Crypto has been one of the great stories in finance over the course of the last 15 years. And I’ll be clear, I’ve been in the naysayer camp over that period of time, but the crypto market today has a market capitalization of about $2 trillion in round numbers, which tells you that I haven’t been right on this call.”

The returns of pioneer funds like Pantera’s can’t be argued with. Hedge fund leaders like Griffin who as recently as 2017 stated he gets “worried that people that are buying bitcoins don’t really understand what they’re participating in” have been holding their hands up. They made the wrong call, and they know it.

The world of trading and investment moves fast though. The value of the crypto market has increased annually, and it didn’t take funds like Citadel long to 180 and get involved when it became apparent tokens like BTC and ETH were a lucrative way to diversify their portfolio.

How is the market shift impacting investors? 

If the continued rise of open crypto funds on the market is anything to go by, it’s been well accepted by those with the capital to buy in.

As with any other hedge fund, investors are attracted to the additional security of managing these higher risk investments through a channel that offers extensive knowledge and experience. For an asset type as relatively new and misunderstood as crypto, the value of a hedge fund's financial acumen increases a thousandfold.

The other security comes from the fact that via a crypto fund, an investor adds multiple currencies to their portfolio. Crypto funds are constantly analyzing new and existing ICOs to offer a cross-currency investment option that’s incredibly popular with people that want to ride the crypto train with large sums, but don’t want the large risk that comes with sole trading.

It should be noted here that crypto funds aren’t risk-free. They’re a safer investment, but they are still an investment. A growth in returns is never guaranteed.

The crypto fund market today

The number of hedge funds foraying into cryptocurrencies has increased every year, with 2022 set to be pivotal. A 2021 survey by EY found that almost a third of hedge fund managers planned to add crypto assets to their portfolio in the future.

With large funds like Jump Trading and Brevan Howard Asset Management now investing heavily in crypto, it’s safe to say that we’re firmly out of the canaries and coal mines phase of the crypto fund story and it will be fascinating to see what the coming years bring. 

Do you think crypto funds will endure as successful hedge fund digital asset investments? Or do you still see it as a bubble that will burst?

5 reasons to never consider that counteroffer

A higher salary is always a welcome career development, but it’s never just about the money. People choose to change jobs for many reasons - such as to pursue a more fulfilling career, to escape toxic cultures, or because the old one feels stale and they want something new.

At a time where many are moving on, and hiring is more competitive than ever - employers will do all they can to avoid letting key players go. This has led to a rise in counteroffers.

Is it a good idea to take one? That depends. Only you know whether your current job is fulfilling and if that’s ever likely to change.

However, we know a lot about counteroffers. If you’re considering one right now - here are 5 reasons why you may want to think again.

1. Wanting you to stay doesn’t mean you’re truly valued

Here’s the thing about hiring new staff: it’s expensive. 

Employers are faced with going through a lengthy hiring process, paying fees, training new people, getting to the point where they actually perform, all while never knowing if it’s going to pay off. So from an employer’s perspective, what’s a salary rise for a single employee? It’s not personal - it’s simply good business sense.

Now let’s think about that potential new employer. If you went through an agency, they could be forking out over $25k before your training even starts. Despite the entire process being costly and uncertain, they still chose you. A decent indicator that they see your value from the start.

2.Things may not stay the same after accepting a counteroffer

Accepting an offer elsewhere speaks volumes. It shows that you’re not really engaged with your current position, and this could erode trust with managers and colleagues.

Some workplaces take a toxic turn once word gets out that someone landed a salary-upping counteroffer. Even if such matters should be confidential, that’s much easier said than done.

Many choose the counteroffer because a new workplace is intimidating - especially if you’ve worked somewhere for a long time. The great unknown is a scary place, after all. But like any risk, the payoff can also be highly rewarding and satisfying.

3. A counteroffer isn’t the same as a pay rise

Earning a pay rise feels great because you get a sense of recognition, achievement, and progression. You might think that a salary hike from a counteroffer brings the same positive feelings, but sadly it usually doesn’t.

A counteroffer doesn’t feature that same sense of accomplishment, especially once the elation from an increased pay packet fades. This is because they’re often seen as a way of throwing money at that problem until it goes away (even by the person accepting).

Do you think the counteroffer is the start of a new chapter? Or an attempt to buy your loyalty?

A job offer, on the other hand, is always an achievement. You got chosen. It may or may not be a great move long term, but you’ll always experience greater fulfillment by achieving a new milestone in your professional journey.

4. Counteroffers could compromise your job security

Since the events of 2020, most people have now experienced working through a tough market. And when times call to consider who may be unaffordable organizational bloat, replacement costs aren’t a consideration. Salaries are. Engagement levels are. Relationships are.

It’s a good idea to ask yourself: is the business you’re in now future-proof? Are they keeping up with a fast changing society? Or are they holding on to days gone by? 

This will help you understand the likelihood of being exposed if the winds of fortune change and hard choices need to be made. Sometimes the perceived safer option actually is not.

5. New challenges can progress your career 

New challenges, environments, clients, and cultures create chances to learn and develop in your career.

If you’re frustrated in your current position but can’t pinpoint exactly what’s wrong, you’ve probably plateaued. There’s every chance you’ve reached the limits of where you can go in your current company - something a counteroffer likely can’t fix.

You can’t climb a career ladder by standing still, so it’s on you to decide whether that’s important for you. Each time you take a step, you go a little further. Growth isn’t found in your comfort zone.

Still not sure what to do?

As compelling as each of these arguments may be, we’re still recruiters. There’s no hiding our bias. And what we say doesn’t actually matter, because taking or refusing a counteroffer is entirely up to you. 

Remember, you can push back on that counteroffer too. Ask questions. Explain why you’re considering leaving and put the onus on your employer to provide assurance that your problems will be addressed. Discern the credibility and substance of how they respond, a few well-placed words may be a shallow indication of true intent when time is of the essence and cash is on the line.

If they genuinely value you and want you to stay because they know what they stand to lose - it should be an extremely constructive conversation. If it’s not, then you’ll know what your final decision should be.

Good luck out there.