Amazon stock fall cuts compensation

Staff paid on assumption stock would keep climbing

Amazon expected its stock price to reach $170 this year. Instead, a fall to $97 has slashes employee pay expectations.

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Amazon expected its stock price to reach $170 this year. Instead, a fall to $97 has slashes employee pay expectations.

Amazon's falling stock price means some corporate employees will see wage packets worth as much as 50% less than the company's previously stated targets, according to sources.

People familiar with the matter told the Wall Street Journal Amazon pays some corporate (non-warehouse) employees "a large chunk" of their annual salaries in restricted stock units.

Because the company's share price has taken a 35% tumble this year (so far), employees' overall compensation will be between 15% and 50% lower than Amazon's projected targets.

Amazon's stock price has fallen from about $150 per share in February 2022 to $97 this week.

Amazon pays staff in-part using restricted stock units, on the assumption that its stock will climb about 15% every year, sources said. That would put Amazon's expected share price at around $170 this year.

In a statement to Business Insider, Amazon said, "Our compensation model is intended to encourage employees to think like owners, which is why it connects total compensation to the company's long-term performance.

"That model comes with some year-to-year upside and risk because the stock price can fluctuate, but historically at Amazon, it's had a history of working out very well for people who've taken a long-term view."

The faltering global economy has been having a tough effect on Amazon as a whole. It announced plans to lay off 18,000 employees last month, and this week said employees would have to come into the office at least three days a week from May, which has been about as popular as you would expect.

And Amazon isn't alone. Other tech firms have struggled to make gains in the last 12 months, with many seeing falling stock prices - Meta notably lost two-thirds of its value last year - and announcing sweeping layoffs.

Many tech giants say they over-hired in the pandemic and are going through a period of "re-alignment" now that the market has taken a tumble. Firms that have announced layoffs include Microsoft, Google, IBM, SAP, HP, Arm, Twilio, Citrix, Salesforce and PayPal.