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Businesses Technology

Amazon Corporate Workers Face Pay Reduction After Shares Slip (wsj.com) 35

Posted by msmash from the tough-luck dept.
The steep decline in Amazon's stock over the past year is roiling the technology company's stock-heavy compensation plan, resulting in employee pay coming in significantly lower than target compensation, WSJ reported, citing people familiar with the matter. From the report: Amazon pays its corporate employees a large chunk of their annual salaries in restricted stock units, and a prolonged slump in the company's shares is causing pay for 2023 to be between 15% and 50% lower than the projected targets Amazon gave to employees, some of the people said. Amazon has historically given less base-pay compensation to employees than its big-tech peers but made up the difference with stock awards that vest over several years. Employees say the longer an Amazon employee stays with the company, the more their compensation can depend on stock awards, with stocks making up 50% or more of total income for some.
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Amazon Corporate Workers Face Pay Reduction After Shares Slip More

Amazon Corporate Workers Face Pay Reduction After Shares Slip

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  • Bad timing if you started during covid "prime" years when the market cap was at all time highs.

    • Re: (Score:3, Interesting)

      by Anonymous Coward

      Amazon pays its corporate employees a large chunk of their annual salaries in restricted stock units

      This is a complete scam and if you go along with it you are a sucker. A company can be profitable and doing well but their stock can go down due to things that are completely out of your control.

      I worked for a company that was reporting the highest profits in the company's history. 6 consecutive quarters of record profits and yet, their stock price went down 25%. Why? I was told that it was because "Wall Street doesn't like our CEO."

      I thought that was bullshit but then a few months later I came ac

      • Re:Bad timing (Score:4, Insightful)

        by youn ( 1516637 ) on Wednesday February 22, 2023 @04:07PM (#63315847) Homepage

        Though I agree with you, there are a lot of factors at play and CEOs are not everything, a CEO can make or break a company
        _ They are the ultimate arbiter of long term strategy - Short term profit is not why most people buy stock, they buy into a vision of the future
        _ They are the face of the company and a lot of people will do deals because they like or dislike a company. They can decide to boycott a company because a CEO is controversial, which can make or break a company
        _ Whether a CEO can get financing, customers, morale, etc can make or break a company
        _ They hire or fire the key people which also make or break the company
        _ At their levels it is very easy to cook books and even if they are truthful make the company appear one way or another... which also can make or break a company

        so yeah, a CEO is not everything but there are many things that they do that can make or break a company so it is a factor to consider when buying stock

      • Well, you're always welcome to decline to stock awards and settle for your salary.

  • Except they don't work like that... (Score:4, Insightful)

    by dark.nebulae ( 3950923 ) on Wednesday February 22, 2023 @03:15PM (#63315699)

    It doesn't matter what the stock price is unless you are actually selling the stock.

    The people are getting 100% of the shares that they received last year and 100% of the salary they got last year.

    It is only on paper, calculating the worth of the shares if sold today. The paper number doesn't matter though unless they actually are selling those shares today.

    • Re: (Score:3, Informative)

      by BeepBoopBeep ( 7930446 )
      It matters, not long ago cash comp was capped to $125k for all employees (raised recently). The rest was stock grants. So unless you can live off of $125k in WA for instance, you golden but unlikely. The reality some people may need a cash infusion once shares vest, a paper loss of value becomes real when they need the cash to live life.

    • Especially when it goes down. The value on the paper doesn't mean shit.

    • If it doesn't matter then give every employee 1 billion shares. If Bezos complains it will make his stock worth less tell him he has nothing to worry about as long as he doesn't sell it.

      • Giving every employee 1 billion shares is a lot easier said than done. It would require significant stock-splitting, which comes with quite a lot of accounting and legal paperwork. Incidentally, it actually wouldn't make Bezos net asset value drop.

        But the issue here is that you don't understand how stocks work. If you did you wouldn't propose something like this. I can understand your frustration, it IS a complex and confusing domain. But it is also where most of the world's wealth is. There is a reas

    • And, you normally do sell it immediately. It's not prudent to keep your savings and your salary both tied to the same company. Better to diversify so if something goes wrong with your company then you only lose your job, not also your savings.

      • Re: (Score:3)

        by jbengt ( 874751 )

        It's not prudent to keep your savings and your salary both tied to the same company.

        I once worked for a company that stopped their 401K contributions and switched to an Employee Stock Ownership Plan, where they instead gave out stock in the privately held company. I called it the all-eggs-in-one-basket retirement plan. But it was worse than that: they borrowed money to buy shares from the partners, and then gave it as non-voting shares to the employees, so it was really a way for the president to cash i

    • You usually have no choice - RSUs are sold back to the company when they vest. They aren't common shares, they are built with terms that return them to the company to be redistributed. They are a form of compensation that flows in a cycle through the organization. You can't opt to retain them.

      In essence, they're a bribe to stay, and ostensibly they should incentivize you to make smart decisions for the company since you benefit from good results and suffer from bad.

  • News? (Score:4, Funny)

    by TomWinTejas ( 6575590 ) on Wednesday February 22, 2023 @03:16PM (#63315707)
    Not sure this is really news and it's not unique to Amazon... all of the MAGA (Meta, Amazon, Google, Apple) companies have the same compensation structure and with the market in a slump the total compensation has reduced. We benefited from the rise in the market where stock valued at X was now worth 2X, so I'm not going to start crying because it's now worth 1.4X.

  • It's a start! (Score:5, Insightful)

    by Impy the Impiuos Imp ( 442658 ) on Wednesday February 22, 2023 @03:16PM (#63315709) Journal

    This is called the start of a recession, my young friends.

    It's when giant corporations start calving off jobs by the tens of thousands. It's not a one-off with Apple, if you've noted the past few months

    • It's when giant corporations start calving off jobs by the tens of thousands. It's not a one-off with Apple, if you've noted the past few months

      Did you mean to say Amazon? Because Apple hasn't announced any layoffs yet.

      Apple's hiring practices over the last few years have actually been very different than that of its peers [wsj.com]. For the three years from September 2019 to September 2022...
      +20% headcount at Apple
      +53% headcount at Microsoft
      +57% headcount at Alphabet
      +94% headcount at Meta
      +100% headcount at Amazon

      While it could always change tomorrow, it isn't surprising that Apple is the only one left that has yet to announce layoffs among Big Tech.

    • This is called the start of a recession...It's when giant corporations start calving off jobs by the tens of thousands.

      (I thought a recession was when we had two quarters of declining GDP, although I vaguely remember that when we had that last year, the administration kind of shuffled their feet, looked at the walls, and mumbled "there are other definitions".)

      Yes. If you were paying even a little attention, all the tech firms announced layoffs in the thousands. Apple, Meta, Google, Dell, probably HP, everyone.

  • First, how did my work deteriorate that I deserve a pay cut?

    Second, where was my salary boost last time the stock prices soared?

    • Maybe it's unclear to you how the RSUs that vested when the stock price soared did, indeed, reap the rewards of the stock market. RSUs are usually held in your name for a period, say for three years, then they are sold back, generally at market price, and you get paid. Market conditions dictate the price. The sale usually isn't optional - it's contractually mandatory. Common share awards are different, of course.

      The title is misleading. Their pay was not cut. The company agreed to pay them a base plus some

  • When the company gives you stock-based compensation, the dollar value of the compensation is based on the dollar value of the stock. Like, if they gave you compensation in Bitcoin, the dollar value of the compensation would be based on the dollar value of the Bitcoin. I'm sure the number of shares they vest per month/quarter remains the same, and the dollars they receive on each pay cycle remain the same.

    I'm sure the next article will be about some people who kept their RSUs as they vested, and now they'r

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