Steep fall in Amazon shares hits co's stock-heavy compensation plan - WSJ (update)
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Updates to add Amazon statement
Amazon.com (NASDAQ:AMZN) shares have shed more than 36% over the past year and the retreat has affected the retail giant's stock-heavy compensation plan, the Wall Street Journal reported on Monday, citing people familiar with the matter.
AMZN employees have been paid significantly lower than their target compensation, as a big chunk of their annual salaries are in restricted stock units, according to the report.
Pay for 2023 is coming in between 15% and 50% lower than the projected targets AMZN gave to employees, the WSJ said, citing some of the people familiar with the matter.
âOur compensation model is intended to encourage employees to think like owners, which is why it connects total compensation to the companyâs long-term performance. That model comes with some year-to-year upside and risk because the stock price can fluctuate, but historically at Amazon, itâs had a history of working out very well for people whoâve taken a long-term view,â AMZN spokesperson Brad Glasser told Seeking Alpha in response to a request for comment.
In 2022 alone, AMZN shed nearly 50%, amid a broader slowdown that saw investors shy away from growth stocks which included megacap technology stocks. AMZN also saw slower growth in the retail side of its business.
AMZN shares are currently trading at around $97 per share, while some employee pay packages are structured around the assumption that the shares would be at around $170 per share, WSJ said, citing some of the people.
AMZN in early Feb. reported mixed Q4 results which saw the company post a big beat on revenue but saw sales at its Amazon Web Services unit come in lower than already tempered expectations.
In mid-Jan., AMZN said it would move forward with a round of around 18K job cuts.