February 22, 2023
As a result of the company’s declining stock price, Amazon’s corporate employees are expected to be paid up to 50% less in 2023. According to the articles, in a recent company-wide email, Amazon CEO Andy Jassy informed corporate employees of the expected pay cut.
Amazon pays a large portion of its corporate employees’ annual salaries in restricted stock units. Furthermore, Amazon’s stock has dropped by more than 20% in the last year, reducing the value of employee stock awards, and the pay cut will primarily affect employees who receive a significant portion of their compensation in stock awards.
The pay cut is meant to harmonize employee compensation with the company’s current stock price and is part of Amazon’s strategy to better manage costs in light of the current market conditions. Amazon has traditionally used stock awards as a major component of its compensation packages. However Amazon may be moving away from this model in order to attract and retain talent in a highly competitive job market.
The cut is expected to affect thousands of Amazon corporate employees but not hourly workers, who make up the majority of the company’s workforce. While the pay cut is likely to affect employee stock options, it is not expected to affect hourly workers’ salaries.
The sources for this piece include an article in BusinessInsider.
