The company said in a regulatory document on Friday that Amazon plans to provide more than US$200 million (approximately Rs 1,495 crore) in additional stock to incoming CEO Andy Jassy. Will be paid within 10 years.

The document stated that Amazon will record the award of 61,000 shares on July 5. This is the day when Jassy succeeded Jeff Bezos as the first CEO transition of the online retailer since its establishment in 1994. As of Friday’s close, the value of these shares is approximately US$214 million (Rs 1,599 crore).

The exact value of the award will depend on how the shares will be traded in the next few years, thus encouraging Jassy to develop a company worth 1.77 trillion US dollars (1,3231,643 crore) today. Although Amazon did not disclose the vesting schedule, its previous stock grant did not vest immediately.

The documents show that Jassy’s basic salary is US$175,000 (1,30,82,130 rupees). Most importantly, he owns 45.3 million US dollars (33.864 crore) of previously granted shares, which will be vested this year, and will receive 41.5 million US dollars (31.023 crore) in 2020.

Last year, the median annual salary of Amazon’s global full-time, part-time and temporary employees was US$29,007, excluding Bezos, and its base salary was US$81,840 (Rs 61,17,950). The founder’s huge stake in Amazon made him the richest man in the world.

Jassy’s vested equity is still less than the amount paid to the CEO of a competitor in the technology industry. For example, in the fiscal year ending June 30, 2020, Microsoft’s Satya Nadella owns 215 million U.S. dollars (1,607.23 crore) in stocks and a base salary of 2.5 million U.S. dollars (18,688, 87,625 rupees). According to its 2021 agency, Apple’s Tim Cook owns $281.9 million (Rs 210.7 crore) in stock.

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Some governance experts criticize such compensation plans because they reward executives, regardless of whether they have achieved company milestones. John C. Coffee Jr., director of the Center for Corporate Governance at Columbia Law School, said that compared with established companies such as Amazon, stock grants are more suitable for startups.

“It’s a bit premature to reward compensation,” Coffee said. “It’s like winning the prize of the game before winning the game.”

A person familiar with the matter said that Amazon plans to stop the previous two-year stock grant to Jassy, ​​aiming to make the latest award account for most of his salary in the next few years.

© Thomson Reuters 2021