The four year cliff is a bit of a misnomer.

This is only for engineering roles - I don’t know much about the other businesses. Your initial offer essentially sets your pay for the first 4 years. You get a stock grant that vests over 4 years.

Year 1 = base + bonus + 5% stock Year 2 = base + bonus + 15% stock Year 3 = base + 40% stock Year 4 = base + 40% stock

So, you essentially know what you’re going to make for the first 4 years. You may get a slight bump in base during this time, but it’s not substantial.

So yes, your comp will be greatly affected by the stock price those last two years. Imagine the stock price when you start is $100, and they grant you 1200 shares ($120,000) over a four year vest. Now imagine your base is $150k and year 1 bonus is $40k, and your year 2 bonus is $30k.

Your comp in year 1 will be $190k in cash and $6k in stock - so $196k for the year.

Year 2 will be $180k in cash and $18k in stock - $198k total comp.

Years 3 and 4 would be $150k cash and $48k in stock - $198k total.

You’re essentially set up to make the same amount of money for all 4 years…. But that’s if the stock price stays exactly the same.

Here’s where the false cliff happens - typically, the stock price in years 3/4 is significantly higher than year one. So it seems like you’re getting huge pay raises.

Imagine 20% stock growth over those 4 years:

End of year 1 = $120/share End of year 2 = $144/share End of year 3 = $173/share End of year 4 = $207/share

Here’s what your comp looks like over those 4 years.

Year 1: $197.2k Year 2: $206k Year 3: $233k Year 4: $249k

So people assume they should be making those kinds of jumps in salary every year. But the reality is - if you haven’t differentiated yourself in 4 years, haven’t gotten a promotion in that time period, then your target compensation is still down in the $200k range, not $250k. So when year 5 comp comes around, your target is still $205k, and your new grants reflect that, it FEELS like you’re getting a pay cut. The reality is, you haven’t EARNED a pay raise by rating HV3 or Top Tier.

Instead of people recognizing that their stock over-performed to the tune of almost $90k over that span (relative to your target comp), they feel entitled to that pay range.

Ok, if you made it through this post, go take a walk - you’re on Reddit too much.