Such a misleading headline, the article even mentions his salary is $175k/year.
> Jassy took over as the CEO of Amazon from Jeff Bezos in July. In 2021, Jassy received $212,701,169 in total compensation, Insider reported in April, citing a proxy filing the company submitted. Only $175,000 of that came from his salary. The rest came from shares: He was awarded 61,000 shares that would vest over 10 years, worth $211,933,520, when he became CEO.
> "The way the SEC rules work we are required to report that grant as total compensation for 2021, when in reality it will vest over the next 10 years," an Amazon spokesperson told Insider in an emailed statement on Friday.
> "What this equates to from an annual compensation perspective is competitive with that of CEOs at other large companies and was approved by the Amazon Board of Directors," the spokesperson added.
Its 21M, 210M is over 10 years with substantial part of that not vesting until year 8. That said it's still pretty rich given its not tied to shareholder value or business performance.
> That said it's still pretty rich given its not tied to shareholder value or business performance.
The sad truth is that, in recent years, performance doesn't seem to be pegged to compensation anymore.
Not only that, but certain large corporation CEOs do have provisions in their contracts so they get paid handsomely if they are fired, which goes against the very idea of firing people for performance reasons.
It's really hard to come up with good performance metrics. Ideally, you want execs to make good long term decisions for developing sustainable growth and competitive advantage. To do this, they need some room to maneuver and freedom to operate to make these decisions. Imagine trying to tie dev comp to performance metrics like number of commits or bugs squashed.
If you tie comp to share price or EPS, they'll try to juice it with buybacks.
If you tie it to revenue, they'll try to grow too quickly and become unsustainable. They'll start doing anti-consumer things like denying refunds.
If you tie it to profits, they'll cut the business down to barebones and whittle away at resiliency and R&D in order to squeeze a bit more margin out each quarter.
Like Warren Buffett's co-ceo Charlie Munger once quipped, "show me the incentives and I'll show you the outcome".
I agree that its not a great deal for shareholders, but I can see how we got here.
It works similar in sports, if there is a 33 year old free agent superstar, every team is willing to give them a 2 year 80million dollar deal (40 per year). So the competition becomes who is willing to guarantee 40 for a 3rd, 4th year.
It may not be a great long term decision for the team, but if they dont agree to those unfavorable terms they're simply not getting the player.
I wonder if there were other companies willing to offer similar payment packages to this CEO and the competition become who would guarantee the money without asking for performance goals.
The comp is actually more like $20M/year if stock price doesn't tank.
Jassy started AWS (cloud compute side of AWS) with 60 folks or something way back.
He grew AWS to a very large size with very large margins (think $25B/year operating income? Maybe 50-60B in revenue? That is good particularly for Amazon which has had low margins elsewhere.)
AWS continues to compare well financial performance wise with competitors like google.
And folks are freaking out over $20M/year?
Amazons overall net sales are going to be in the 400 billion per year range. They can afford it.
> The comp is actually more like $20M/year if stock price doesn't tank.
I feel like a lot of people are missing the "stock price doesn't tank" part. How much he actually gets is going to pend on the value of the stock at the time. With the way things are going I wouldn't be surprised (even if it's just this year) his take home ends up being significantly less given AMZN is down 30+% since last year.
> Only $175,000 of that came from his salary. The rest came from shares: He was awarded 61,000 shares that would vest over 10 years, worth $211,933,520, when he became CEO.
tl;dr: his actual salary is some $20m / year. Still high but probably not news-worthy.
Honestly, it's hard to believe that one person who isn't actually producing/outputting anything can create that much value, and that you can't fund someone to do the same work for half the cost.
> Honestly, it's hard to believe that one person who isn't actually producing/outputting anything can create that much value
I'm not going to attempt to justify the number, but this statement is incorrect. Value is provided by working on the right thing. I work for a startup, and ~20% of my time is spent figuring out what we're working on/if we need to pivot, and the other 80% on doing some of that work (with other developers). The 20% of time that I spend choosing what we're working provides an order of magnitude more value to the company than the 80% of my time that I spend developing, and I suspect that as we grow that gap will continue to grow.
If you're only picking what to work on, them how does anything get done? The people executing on that decision are the ones providing the tangible value. I may get downvoted for this, but I think it's stupid that people get paid obscene amounts for making some decisions and having fancy dinners with other big shots. Then they justify making 100x or 1000x what the actual workers do.
Have you met Andy Jassy? I have, and can say that the guy is a complete boss. I have no hesitation in saying that he would certainly create that much value. The idea that you can just get someone else to do what he does is patently ridiculous. That's like saying "Why should we pay for Lebron? My cousin is pretty good at basketball and would be a lot cheaper".
Secondly why do you think he isn't actually producing/outputting anything? Just because you may not understand what a CEO does, doesn't mean he doesn't do anything. The guy certainly produces outcomes (after all, he grew AWS into a billion-revenue company faster than anyone else has ever accomplished that task as one simple example).
Finally, the guy is already a billionaire because he's been with Jeff Bezos since the very early days of Amazon. If you want to retain someone like that the compensation is going to be high.
I think, rather, that settling for somebody 95% the caliber of Jassy can cost far more than Jassy's compensation in a company as large as Amazon. In those sorts of companies, it's worth hundreds of millions of dollars to eke out a one percent gain in revenue.
I'd be curious to see the results of (crowds of?) normal people paid to say what their responses would be in the type of situations that leaders on these pay packages have to deal with, when given similar levels of context.
No doubt that's not the entire job: there's also networking, communication and thought leadership involved. But similar approaches could apply. Liability could be a trickier one.
Frankly, that all reputation. It's like paying for a brand name. There are likely people who can do similar work for less money. It's just that the people putting up the money want the status that comes with the name.
Wouldn’t it be harder to believe that an individual who does produce something could generate that much value? There’s a limit to what one person can do. However I’ve definitely seen projects fail with hundreds of high salaries wasted for months or years because of bad leadership.
I feel like this statement undercuts the value of a good leader. I've worked under both good and bad management, and it's super frustrating and draining when leadership can't focus and prioritize for the best interests of the product. In addition, leadership skills appear to be much more rare than say, good coding skills. I've worked with tons of good programmers, but not very many good leaders.
Readit News
> Jassy took over as the CEO of Amazon from Jeff Bezos in July. In 2021, Jassy received $212,701,169 in total compensation, Insider reported in April, citing a proxy filing the company submitted. Only $175,000 of that came from his salary. The rest came from shares: He was awarded 61,000 shares that would vest over 10 years, worth $211,933,520, when he became CEO.
> "The way the SEC rules work we are required to report that grant as total compensation for 2021, when in reality it will vest over the next 10 years," an Amazon spokesperson told Insider in an emailed statement on Friday.
> "What this equates to from an annual compensation perspective is competitive with that of CEOs at other large companies and was approved by the Amazon Board of Directors," the spokesperson added.
Dead Comment
The sad truth is that, in recent years, performance doesn't seem to be pegged to compensation anymore.
Not only that, but certain large corporation CEOs do have provisions in their contracts so they get paid handsomely if they are fired, which goes against the very idea of firing people for performance reasons.
If you tie comp to share price or EPS, they'll try to juice it with buybacks.
If you tie it to revenue, they'll try to grow too quickly and become unsustainable. They'll start doing anti-consumer things like denying refunds.
If you tie it to profits, they'll cut the business down to barebones and whittle away at resiliency and R&D in order to squeeze a bit more margin out each quarter.
Like Warren Buffett's co-ceo Charlie Munger once quipped, "show me the incentives and I'll show you the outcome".
It works similar in sports, if there is a 33 year old free agent superstar, every team is willing to give them a 2 year 80million dollar deal (40 per year). So the competition becomes who is willing to guarantee 40 for a 3rd, 4th year.
It may not be a great long term decision for the team, but if they dont agree to those unfavorable terms they're simply not getting the player.
I wonder if there were other companies willing to offer similar payment packages to this CEO and the competition become who would guarantee the money without asking for performance goals.
I worked a lot with Andy jassy, he’s worth the investment.
Are you claiming he will get this award every year?
He doesn't "just have to wait". He has to WORK for 10 years or meet other requirements for vesting.
If this was a european style 10 year option package, sure, he could retire and just wait to excercise, that's not what these are.
The comp is actually more like $20M/year if stock price doesn't tank.
Jassy started AWS (cloud compute side of AWS) with 60 folks or something way back.
He grew AWS to a very large size with very large margins (think $25B/year operating income? Maybe 50-60B in revenue? That is good particularly for Amazon which has had low margins elsewhere.)
AWS continues to compare well financial performance wise with competitors like google.
And folks are freaking out over $20M/year?
Amazons overall net sales are going to be in the 400 billion per year range. They can afford it.
I feel like a lot of people are missing the "stock price doesn't tank" part. How much he actually gets is going to pend on the value of the stock at the time. With the way things are going I wouldn't be surprised (even if it's just this year) his take home ends up being significantly less given AMZN is down 30+% since last year.
> Only $175,000 of that came from his salary. The rest came from shares: He was awarded 61,000 shares that would vest over 10 years, worth $211,933,520, when he became CEO.
tl;dr: his actual salary is some $20m / year. Still high but probably not news-worthy.
I'm not going to attempt to justify the number, but this statement is incorrect. Value is provided by working on the right thing. I work for a startup, and ~20% of my time is spent figuring out what we're working on/if we need to pivot, and the other 80% on doing some of that work (with other developers). The 20% of time that I spend choosing what we're working provides an order of magnitude more value to the company than the 80% of my time that I spend developing, and I suspect that as we grow that gap will continue to grow.
Secondly why do you think he isn't actually producing/outputting anything? Just because you may not understand what a CEO does, doesn't mean he doesn't do anything. The guy certainly produces outcomes (after all, he grew AWS into a billion-revenue company faster than anyone else has ever accomplished that task as one simple example).
Finally, the guy is already a billionaire because he's been with Jeff Bezos since the very early days of Amazon. If you want to retain someone like that the compensation is going to be high.
Knowing a couple of friends who run such firms, let me tell you -- it would be hard to find someone of 25% of that caliber for even 75% of that price.
Value is what the market is willing to pay. There is only 1 Andy Jassy in the world in the same way there is only 1 Jeff Bezos.
No doubt that's not the entire job: there's also networking, communication and thought leadership involved. But similar approaches could apply. Liability could be a trickier one.
Like a driver of an armored truck that you pay extra, not for driving it being difficult, but due to the value of the cargo.
Does that seem so weird to you?
Dead Comment