Amazon did not grant its Chief Executive Andy Jassy any new stock in 2022, shrinking the pay gap between the online retailer’s top boss and rank-and-file employees, the company said Thursday in a securities filing.
At the same time, it awarded more than $40 million each to the recently elevated CEOs of e-commerce and cloud businesses, at 2022 share prices, while Jassy took home a similar amount from his own earlier grants, the filing showed.
Amazon for months has grappled with inflation and recession fears that prompted its customers to tighten their budgets. Aiming to slash costs, the company said it would cut 27,000 jobs and trim some stock awards.
In his annual letter to shareholders published on Thursday, Jassy said he was confident the cost cuts would pay off and that Amazon’s core e-commerce and cloud computing businesses still have room to grow.
He said the company was investing in new areas such as generative artificial intelligence, which has become a buzzword since the launch of OpenAI’s ChatGPT and sparked a race for dominance between Microsoft and Alphabet.
“LLMs (large language models) and Generative AI are going to be a big deal for customers, our shareholders, and Amazon,” he said, noting Amazon’s AI-focused offerings from machine learning chips to CodeWhisperer service that helps write computer code.
The filing showed that the pay ratio of Amazon’s median employee globally to Jassy was 1 to 38 in 2022, or about $34,000 compared with the CEO’s $1.3 million in salary and benefits. In 2021, the ratio was 1 to 6,474, reflecting a stock grant Amazon said would take Jassy a decade to fully earn.
Union officials and politicians have long criticized the outsized compensation of CEOs when compared to staff, including at Amazon. In the United States, its median full-time pay was $41,762, Amazon said.
The company said Jassy’s 2021 award, originally worth $214 million, was “intended to represent most of his compensation for the coming years,” a reason why it had no plans to bestow more stock in 2023 or last year.
The package has declined sharply since Amazon awarded it. Reflecting the company’s stock drop, Jassy’s award along with older grants lost nearly $148 million of their value in 2022.
Still, he took home $31.9 million from the older grants that vested last year, the filing said.
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