One way to look at this is a way for employers and employees to cope with uncertainty.

The employee is likely to underperform for the first few comp cycles after being hired, due to the new role, new context, etc. So the employer is willing to guarantee an "optimistic" salary up front for the first year (or, with equity vests, perhaps longer).

But the employer is unwilling to guarantee this indefinitely; after a year or two, they want to see you performing at level--and thus qualifying for merit increases--or else you'll revert to the lower salary.

Viewed this way, a rational employer will offer you a lower total comp for the first year if it's all salary; taking more of your first year's comp as bonus represents a bet on your own impact (and the fairness of the merit-based comp modeling).

The bonuses are not traditional bonuses in the sense that they're not guaranteed and based on company performance.

The employment contract is "x per year and an extra y year one" not "x per year and y year one under the right conditions".

It gives them the freedom to not increase your salary or give you more stock, but you should still have a guaranteed known rate for 4 years.

No that logic is a bit off. You shouldn't be benchmarking against your past self. You should be benchmarking against what you could get elsewhere and, more importantly, what you're actively getting now.

If you found yourself getting a similar TC excluding the signing bonus at another company, and have reason to believe that's actually a fair price for your labor, the cash signing bonus will still more than offset your switching costs. It's also, simply put, an absurdly high bonus. Nothing stopping you from collecting another one of those in a couple years at another company.

> Why give your future self that risk instead of looking for a higher base salary that is stickier over the long term?

You're exactly right. Signing bonuses - and even equity compensation - are designed to lower your TC over time. The idea is that companies offer a high TC to entice you through the door, with the understanding that at the end of your 4 years your TC will drop precipitously but at that point you'd be too invested/too afraid to interview/etc to leave.

This is why in nearly all companies equity refreshers are always significantly smaller than what would be necessary to keep your TC level. The point is to over several years converge you to a lower TC that is middle of the pack rather than the top-of-band packages FAANGs have to offer to recruit candidates.

It does seem ass backwards - and if you're an engineer who cares a lot about TC (IMO rightly so) and interview well, you will consistently cliff out every 4 years as a result.

Sounds like a really good way for a manager with a hiring-based OKR to get short term good hiring numbers. Maybe the manager is also planning on leaving or maybe someone else is on the line for retention and this strategically benefits the hiring manager :D

Cash gives you the freedom to diversify. If you really wanted to be all in on Amazon, you could use the cash to buy shares. You get RSUs in the latter years to make up for the lack of cash bonus, which you can hold or sell.

I don't see what downside there is?

I don't follow. Are you saying Amazon might opt to not pay out the bonus as outlined in my offer letter for no other reason than a gotcha? I guess it's possible but highly unlikely...

If the cash bonus is guaranteed, it's arguably less risky to get that up front because you could get fired or laid off after one year and not see the benefits of the higher base salary.