Amazon CEO Andy Jassy’s compensation for 2023 totaled $29.2 million, including his base pay, the value of shares that vested during the year, and security costs, according to a new filing by the company.
That was down 12% from $33.2 million in compensation in 2022. The drop was primarily due to the decline in Amazon’s share price last year (especially earlier in the year, when many of Jassy’s shares vested) and the fact that the Amazon CEO had fewer shares vest in 2023 than in 2022.
- Jassy’s base pay rose 15% to 365,000 in 2023, up from $317,500 in 2022.
- Amazon shares that vested for Jassy in 2023 were valued at $27.8 million.
- Amazon spent $986,164 on security costs for the CEO in 2023.
Jassy’s base pay increase for 2023 reflected the first full year since a broader increase in the maximum base pay for the company’s corporate and tech workers, announced in early 2022. (More recently, Fortune reported March 27 that many Amazon senior managers and leaders won’t get cash raises this year.)
Those figures are described in Amazon’s proxy statement Thursday as “realized compensation,” which refers to the value the executive received during the year.
They differ from SEC-prescribed compensation calculations, which include the year-over-year change in the value of shares granted to the executive, including shares that vest during the year and those that will vest in the future.
By that method, which the SEC calls “Compensation Actually Paid,” Jassy’s compensation was $109.6 million in 2023, as reported in the company’s proxy statement. Most of that came from the increase in the value of shares that haven’t vested, due to an increase in Amazon’s share price later in 2023.
Using that same method, Jassy’s compensation was reported by Amazon as a negative $147.7 million in 2022, due to the decline in Amazon’s shares last year, illustrating the challenge of relying on the SEC’s approach for an accurate picture of a CEO’s compensation in a given year.
Jassy’s compensation has come under scrutiny since he received a one-time special stock award upon becoming CEO in 2021, valued at nearly $212 million at the time.
That stock vests over 10 years, most of it between five and 10 years after Jassy became CEO. In the proxy statement Thursday, Amazon’s board reiterated that the stock award “was intended to represent most of his compensation in the coming years.” Jassy did not receive additional stock awards in 2022 or 2023.
Among other concerns, shareholders have questioned why the vesting of Jassy’s stock-based compensation wasn’t conditioned on achieving specific goals.
Institutional Shareholder Services, an investor advisory firm, at the time called the stock award to Jassy “excessive in the context of an internal promotion,” saying it lacked “any connection to objective, pre-set performance criteria.”
At Amazon’s shareholder meeting in 2022, less than 56% of votes cast in an advisory vote on executive pay supported the company’s compensation of Amazon’s named executive officers. That was down from 81% the year before. At last year’s meeting, the approval rating increased to 68%.
“Given the long-term vesting conditions on Mr. Jassy’s 2021 restricted stock unit award, his compensation is fully aligned with our long-term stock price performance,” Amazon said in its proxy statement last year, describing a series of conversations with investors about the issue.
Judith McGrath, an Amazon board member since 2014, who was chair of the board’s Leadership Development and Compensation Committee during this timeframe, has opted not to seek re-election to the board this year, the company said in its proxy statement Thursday morning.
McGrath, the former MTV Networks CEO and chair, received 71% of shareholder votes cast in the 2023 Amazon board election, and 78% the year before, compared with more than 97% prior to the heightened scrutiny over the company’s executive compensation.
Amazon on Thursday named a new board member, Andrew Ng, a longtime business and technology leader who specializes in artificial intelligence.
Under a pay ratio disclosure in the proxy filing, using an SEC formula, Amazon said Jassy’s base pay and other compensation (primarily security) of $1.36 million in 2023 compared with a median employee compensation of $36,274 (for all full- and part-time permanent and temporary employees worldwide, except the CEO).
That translated into a pay ratio of 37:1, compared with a ratio of 38:1 a year ago.
Looking at a more narrow set of employees, Amazon said median annual total compensation for all U.S. full-time Amazon employees was $45,613, an increase from $41,762 the year before. Amazon’s median employee wage is lower than many other tech companies due to its large number of fulfillment workers.
- By comparison, Microsoft CEO Satya Nadella’s compensation in the Redmond company’s 2023 fiscal year was $48.5 million (consisting largely of stock awarded to him during the year) and Microsoft’s median employee compensation was $193,770, for a pay ratio of 250:1.
- Walmart CEO Doug McMillon’s compensation for fiscal 2023 was $25.3 million, with median worker compensation of $27,136, for a ratio of 933:1, although the retail giant cautioned that the size and scope of its global operations could make comparisons to the pay ratios other companies misleading.
The AFL-CIO offers a database of executive-worker pay ratios for more comparison.
Updated with additional details about Amazon’s board, and executive pay ratios.
