A sharp drop in Amazon.com Inc.’s (AMZN ) stock price over the past year is disrupting the tech company’s stock-heavy compensation plans, sending workers significantly below target compensation, according to people familiar with the matter.
Some of the people familiar with the matter said that a large part of Amazon’s annual salary paid to corporate employees is paid in the form of restricted stock units, and the long-term downturn in the company’s stock has caused the salary in 2023 to be lower than Amazon’s previous expectations for employees. 15% to 50% lower.
“Our compensation model is designed to encourage employees to think like company owners, which is why we link total compensation to long-term company performance,” an Amazon spokesman said in an emailed statement. Some year-over-year upside and risk because the stock price can be volatile, but historically, in Amazon, this model has been very good for those who take the long view.”