Amazon CEO’s $212 million pay packet scrapes through
Amazon’s Say on Pay vote was passed with only a slim 56% majority as investors raise concerns over bonuses.
Approval for Amazon’s executive pay plan fell drastically at the retail giant’s May annual meeting. While shareholder support for its pay plan stood at 81% last year, this year that figure has dropped to 56%.
CEO Andy Jassy’s total pay this year is $212.7 million, with share awards amounting to $211.9 million of that value. Notably, the resulting pay ratio is 6,474 — meaning that Mr. Jassy is getting paid 6,474 times more than Amazon’s average employee.
Advisers recommend to “vote against”
The figures come as little surprise, as proxy advisers (firms who provide voting recommendations to shareholders) ISS and Glass Lewis recommended a vote against the proposed pay plan.
Glass Lewis branded the share awards as “excessive” and said that the vagueness of Amazon’s pay structure “provide little assurance to shareholders concerned with excessive pay”. Meanwhile the New York City Comptroller, an elected official who safeguards New York’s finances, cites the extremely high CEO pay ratio at Amazon as a cause for concern.
What to expect next
Amazon has not responded to the results, but ultimately the vote is non-binding. So in theory, Amazon could ignore the voting outcome and resume business as usual. However, as noted in a Bloomberg article, Amazon has previously shown that it is willing to act in response to shareholder discontent.
If this is the case, then shareholders may also want to look out for updates on Amazon’s other close-call proposals. Shareholder proposals on plastic packaging, lobbying and warehouse working conditions received significant support from investors and are likely to be addressed by the company.
How you can have a say on companies’ executive pay plans
At Tumelo, we give our users the opportunity to vote on exciting issues just like the one above. We then send their preferences over to their fund manager who votes on their behalf.
Recently, 93.5% of Tumelo users voted against Amazon’s executive pay. And while these votes don’t go straight to Amazon, because our users’ money is being invested in the retail giant, we think having their voice heard is a pretty good start. Want in?
Talk to us here if you want to know about what we do! Alternatively, ask your pension or investment provider whether you already have access to Tumelo.
