In this conversational interview, the speakers explore how a company's equity compensation design—whether it leans toward RSUs, stock options, or private‑equity buy‑ins—serves as a window into its underlying culture and strategic philosophy. They argue that the type of equity offered signals what the firm values (e.g., high‑growth ambition versus mature stability) and that prospective employees should assess whether that signal aligns with their own career stage and risk tolerance. Using Amazon as a case study, they illustrate how a once high‑growth, stock‑option‑heavy firm has shifted toward a more modest RSU‑centric plan as the business matures, making it a better fit for later‑career professionals, while younger talent may seek firms with more upside potential. The discussion also touches on the growing prevalence of private‑equity‑owned companies and how that ownership model influences equity structures. The overall message is that understanding a firm’s equity plan provides insight into its culture and helps candidates choose workplaces that match their personal and professional goals.
Chapters
Different companies view this differently, and some are heavier on RSUs. This is a little bit less relevant than it used to be, but some have options depending on where you're at in the company structure and that sort of thing. Does that say anything to you about the company when they have a specific type of structure of their equity comp? Is that something that comes to mind?
It does. It goes to the character, the culture. Of the firm. And, you know, for most people, I think they want to work at a place that resembles them, that they like and admire, that they can grow with. I mean, you spend a lot of your working hours here. In a lot of cases, you spend more time at work with your coworkers and at work than you do with your family.
Right.
So it is something important. You really want to understand the culture and philosophy of the firm and make sure it matches yours. Give me a perfect case in point how a comp plan can mirror a firm. If you're an executive at Amazon, you know, their comp is $180,000. You're not going to make more in cash comp even if you're the CEO than $180,000. Okay. The rest of your comp comes in the form of Amazon stock. Now, I'm going to go out on a limb and say, hey, if you're an executive and you were there, when Bezos started the firm or the early '90s or in the early 2000s, those equity grants were really lucrative and you did well. Amazon was a different type of business. They were a high-flying, high-growth business. Amazon's not that anymore. It's a mature business growing at high single digits. So the outlook for those equity comp shares are very different than what the executives received even 10 years or so ago. So, yes, the comp plan tells you a lot about the philosophy of the firm. Sure.
And it's— it also, I think you want to choose a firm that's going to match your where you're at too, right? So if you're later career, maybe an Amazon makes more sense now in 2025, 2026 when we're talking about a little bit more mature, less high-flying. Whereas if you're 35 and you're looking for kind of upside, maybe you look for something that's got a little bit more juice to it. So I think it's definitely important to, again, we're kind of going back to the same theme of you gotta evaluate the company that you're looking at. More so than anything else.
I think the biggest point I'd like to make on this to back that up is, you know, a lot of businesses in the country now, more and more businesses are being owned by private equity firms.
Sure.
So we've had a number of executives that we've seen where they get approached by some private equity firm to take some executive gig at some private equity owned firm. And the promise is we're going to let you buy into the private equity firm. And that's their form of equity cotton.
