NEW YORK: Amazon.com Inc plans to award incoming Chief Executive Andy Jassy more than $200 million in extra stock, which will pay out over 10 years, the company said in a regulatory filing on Friday.
Amazon will record the grant of 61, 000 shares on July 5, the filing said. That’s the date Jassy succeeds Jeff Bezos (pic below) in the online retailer’s first CEO transition since its founding in 1994. As of Friday’s close, those shares are worth about $214 million.
The award’s exact value will depend on how the shares are trading when they pay out in future years, encouraging Jassy to grow a company that’s worth $1.77 trillion today. Though Amazon did not disclose the vesting schedule, its previous stock grants have not vested right away.
Jassy’s base salary has been $175, 000, filings show. On top of that, he has $45.3 million in previously awarded stock that is vesting this year and had $41.5 million vest in 2020.
The annual median pay at Amazon was $29, 007 last year across full, part-time and temporary employees worldwide, excluding Bezos, whose base salary was $81, 840. The founder’s outsized stake in Amazon has made him the richest person in the world.
Jassy’s vested equity was still smaller than payouts to rival CEOs in the technology industry. Microsoft Corp’s Satya Nadella had $215 million in stock vest for the fiscal year ended June 30, 2020, on top of a base salary of $2.5 million, for instance. Apple Inc’s Tim Cook had $281.9 million in stock vest, according to its 2021 proxy.
Some governance experts have criticized such pay schemes because they reward executives irrespective of whether they achieve corporate milestones. Stock grants can be more appropriate for startups than for established companies like Amazon, said, John C. Coffee Jr., director of the Center on Corporate Governance at Columbia Law School.
“It is rewarding compensation a little prematurely, ” Coffee said. “It’s like winning the prize for the race before the race is won.”
Amazon plans to stop its prior biannual stock grants to Jassy, aiming for the latest award to account for most of his compensation in the coming years, a person familiar with the matter said.