Amazon Executive Pay Trends and Compensation Practices

Amazon's executive pay trends and compensation practices have been a subject of interest for many. According to the company's proxy statements, the median total compensation for Amazon's top executives, including CEO Jeff Bezos, was $1.6 million in 2020.

Amazon's compensation committee uses a combination of performance metrics, including revenue growth, customer satisfaction, and innovation, to determine executive pay. This approach is designed to align executive compensation with the company's overall goals and objectives.

Amazon's executives are also eligible for stock awards, which can significantly impact their total compensation. In 2020, the median stock award for Amazon's top executives was $2.3 million.

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Andy Jassy's total compensation was US$1.72M, which is below average for companies of similar size in the US market, where the average is US$12.63M.

In 2023, Amazon's earnings were US$30b in December, US$20b in September, US$13b in June, and US$4b in March.

Andy Jassy's compensation has increased by more than 20% in the past year.

Amazon's leadership has a significant amount of experience, with an average tenure of 9.3 years among its management team.

This level of experience is likely due to the company's long history and commitment to retaining top talent.

The company's President, Chief Executive Officer, and Director, Andy Jassy, has been in his role since July 5, 2021, showing that even at the top level, experience and stability are valued.

Amazon's management team is seasoned and experienced, with an average tenure of 9.3 years.

The company's leadership has a proven track record of stability and continuity, which is reflected in their long-term tenure.

Mr. Andrew R. Jassy, Amazon's President and CEO, has been in his role since July 5, 2021, and has likely benefited from the company's culture of retaining experienced talent.

This level of experience and continuity is a key factor in Amazon's success, and it's something that other companies can learn from.

Amazon's long-term focus is reflected in its compensation structure, which prioritizes equity over cash, especially as employees advance. This approach is rooted in the company's "Frugality" leadership principle, which discourages unnecessary expenses and prioritizes long-term goals.

One downside to this approach is that other companies may try to lure away Amazon's top talent with higher cash offers. This can lead to some employees leaving, but Amazon's culture is designed to retain those with a long-term perspective.

Amazon's use of long-term equity structures also helps prevent conflicts of interest in its wholly-owned subsidiaries, such as IMDb, Zappos, and Twitch. Executives in these companies are compensated similarly to Amazon executives, with a focus on equity and a base salary.

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Amazon's board of directors is made up of experienced individuals with a significant amount of tenure. The average tenure of the board members is 7.1 years, indicating a high level of experience and stability.

Jeffrey Bezos, the founder and executive chairman, has been on the board for 30.5 years, which is a remarkable feat. Andrew Jassy, the president, has been on the board for 3.5 years, bringing a relatively new perspective to the table.

The board members are compensated fairly, with some receiving as much as $1.72 million per year. For example, Andrew Jassy receives a compensation of $1.72 million per year.

Here is a breakdown of the board members and their compensation:

Some board members, like Jonathan Rubinstein and Wendell Weeks, have a significant amount of ownership in the company, with Rubinstein owning 0.00084% and Weeks owning 0.00040%.

Amazon's compensation philosophy is unique compared to other companies. They don't grant annual equity awards, instead, they grant awards that vest over time.

This structure means that only one executive, Jeffrey Blackburn, received equity in 2019, and it was not a typical grant. He took a leave of absence in 2019, and a stock grant given to him before the leave was re-reported in the proxy statement.

Amazon's approach to equity is designed to incentivize executives to think long-term, rather than focusing on short-term gains. This is reflected in the fact that executives receive equity awards that vest over several years.

Here's a breakdown of the different types of compensation elements mentioned in the article: