Amazon to grant new CEO Andy Jassy over $200 million in inventory

Amazon.com Inc plans to award incoming Chief Executive Andy Jassy greater than $200 million in additional inventory, which pays out over 10 years, the corporate stated in a regulatory submitting on Friday.
Amazon will file the grant of 61,000 shares on July 5, the submitting stated. That’s the date Jassy succeeds Jeff Bezos within the on-line retailer’s first CEO transition since its founding in 1994. As of Friday’s shut, these shares are price about $214 million.
The award’s actual worth will depend upon how the shares are buying and selling once they pay out in future years, encouraging Jassy to develop an organization that’s price $1.77 trillion right this moment. Though Amazon didn’t disclose the vesting schedule, its earlier inventory grants haven’t vested instantly.
Jassy’s base wage has been $175,000, filings present. On prime of that, he has $45.3 million in beforehand awarded inventory that’s vesting this 12 months and had $41.5 million vest in 2020.
The annual median pay at Amazon was $29,007 final 12 months throughout full, part-time and non permanent workers worldwide, excluding Bezos, whose base wage was $81,840. The founder’s outsized stake in Amazon has made him the richest particular person on the planet.
Jassy’s vested fairness was nonetheless smaller than payouts to rival CEOs within the know-how business. Microsoft Corp’s (MSFT.O) Satya Nadella had $215 million in inventory vest for the fiscal 12 months ended June 30, 2020, on prime of a base wage of $2.5 million, as an illustration. Apple Inc’s (AAPL.O) Tim Cook had $281.9 million in inventory vest, in line with its 2021 proxy.
Some governance consultants have criticized such pay schemes as a result of they reward executives regardless of whether or not they obtain company milestones. Stock grants may be extra applicable for startups than for established corporations like Amazon, stated, John C. Coffee Jr., director of the Center on Corporate Governance at Columbia Law School.
“It is rewarding compensation a little prematurely,” Coffee stated. “It’s like winning the prize for the race before the race is won.”
Amazon plans to cease its prior biannual inventory grants to Jassy, aiming for the newest award to account for many of his compensation within the coming years, an individual accustomed to the matter stated.