The American eCommerce giant Amazon is planning to grant its incoming Chief Executive Mr. Andy Jassy more than $200 million in extra stock, which will vest over a period of ten years, the company said in a regulatory filing.
Amazon will record the grant of 61,000 shares on July 5, when Mr. Jassy succeeds Mr. Jeff Bezos 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 grant represents a financial acknowledgment of a high-priority leadership change for one of the world’s top technology companies.
The award’s exact value will depend on how the shares are trading when they pay out in future years, encouraging Mr. Jassy to grow a company that’s worth $1.77 trillion. Though Amazon did not disclose the vesting schedule, its previous stock grants have not been vested right away.
As per the filings, Mr. Jassy’s base salary has been $175,000. On top of that, he has $45.3 million in previously awarded stock that is vesting this year and had $41.5 million vests in 2020.
Last year, the annual median pay at Amazon was $29,007 across full, part-time and temporary employees worldwide, excluding Mr. Bezos, whose base salary was $81,840. The founder’s outsized stake in Amazon has made him the richest person in the world.
However, Mr. Jassy’s vested equity was smaller than payouts to rival CEOs in the technology industry. Microsoft Corp’s Mr. Satya Nadella had $215 million in the stock vest for the fiscal year ended June 30, 2020, on top of a base salary of $2.5 million, for instance. Apple’s Mr. Tim Cook had $281.9 million in the 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, Mr. John C. Coffee Jr., director of the Center on Corporate Governance at Columbia Law School said.