Andy Jassy to receive $214 mn in stock grants but here’s the catch

Andy Jassy, who will replace Amazon founder and CEO Jeff Bezos when he steps down on July 5, will receive restricted stock that is currently valued at $214 million over a period of 10 years. This is considerably larger than the awards he has been receiving as Amazon web services chief. Due to past stock grants, Jassy already has stock worth $300 million. Jassy succeeds Jeff Bezos in the online retailer's first CEO transition since its founding in 1994.

On July 5, Amazon will grant 61,000 shares to Jassy, the company said in a regulatory filing. The exact value will depend on how the shares are trading when they pay out in future years. Amazon has not disclosed the vesting schedule. But as with most good things, there’s a catch in store for Jassy.

LESSON TO LEARN

These kinds of stock grants are common in big tech companies that bring in new CEOs. Apple’s Tim Cook, Alphabet’s Sundar Pichai and Microsoft’s Satya Nadella got similar awards when they bagged the top job.

Microsoft Corp's Satya Nadella had $215 million in stock vest for the fiscal year ended June 30, 2020, on top of a base salary of $2.5 million. Apple Inc's Tim Cook had $281.9 million in stock vest, according to its 2021 proxy. In December 2019, Pichai was awarded $120 million in restricted stock units.

Their awards seem to be justified. Cook had a remarkable run for shareholders, Pichai oversaw Alphabet’s resurgence, its revenue growth rate and stock price. Nadella too has set the bar very high for CEOs reinventing tech giants.

The catch is that Jassy has big shoes to fill. He will be scrutinised closely and put in comparison to Bezos who steered Amazon’s unparalleled growth over the years.

TOP SEAT’S SALARY

Jassy's base salary has been $175,000, filings show. On top of that, he has $45.3 million in previously awarded stock that is vesting this year and had $41.5 million vest in 2020.

The annual median pay at Amazon was $29,007 last year across full, part-time, and temporary employees worldwide, excluding Bezos, whose base salary was $81,840. The founder's outsized stake in Amazon has made him the richest person in the world.

Jassy's vested equity was still smaller than payouts to rival CEOs in the technology industry.

(With agency inputs)

Also read: How Amazon grew from a garage bookstore to trillion-dollar company under Jeff Bezos