Amazon.com Inc said in a regulatory filing on Friday that it planned to grant incoming Chief Executive Andy Jassy more than $200 million in additional stock over the next ten years.
The 61,000 shares will be recorded on July 5, according to the filing. On that date, Jassy will succeed Jeff Bezos as CEO of the online retailer, which was founded in 1994. Those shares were valued $214 million as of Friday's close.
The actual size of the reward will be determined by how the shares trade in future years when it is paid out, incentivizing Jassy to expand a company valued $1.77 trillion today. Despite the fact that Amazon did not specify a vesting timetable, earlier stock grants did not automatically vest.
As per the filings, Jassy's base salary was $175,000 (Rs. 1,30,82,130). He also owns $45.3 million (Rs. 338.64 crores) in previously awarded shares that will vest this year, as well as $41.5 million (Rs. 310.23 crores) that will vest in 2020. Reportedly, the goal is for the latest award to account for the majority of Jassy's remuneration in the coming years, therefore Amazon has decided to discontinue giving him biannual stock grants.
Last year, the yearly median pay at Amazon for full-time, part-time, and temporary employees globally was $29,007, excluding Bezos' base salary of $81,840. The founder's large share in Amazon has made Bezos the world's richest person.
Even yet, Jassy's vested equity was less than that of rival CEOs in the technology industry. Satya Nadella of Microsoft Corp. received $215 million in stock vesting for the financial year 2019 June 30, 2020, on top of a basic salary of $2.5 million. According to Apple Inc.'s 2021 proxy, Tim Cook received $281.9 million in stock vesting.
Some governance experts have criticised such pay plans for rewarding CEOs regardless of whether or not they meet business goals. Stock grants may be more acceptable for startups than for established corporations such as Amazon, according to John C. Coffee Jr., head of Columbia Law School's Center on Corporate Governance.
“It rewards compensation a little prematurely,” Coffee said. “It's like winning the race prize before the race has even started.”
Amazon intends to discontinue Jassy's previous biannual stock grants, intended for the most recent award to account for the majority of his future remuneration, a person familiar with the matter said.
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