By Aimee Picchi
/ MoneyWatch
Layoffs, bank failures weigh on Fed
Amazon.com CEO Andrew Jassy's 2022 pay plunged to $1.3 million, a sharp drop from his compensation package of $212 million in the prior year.
The pay cut means that Jassy, who stepped into the role in 2021, earned less than Amazon founder Jeff Bezos, who now serves as executive chair and earned $1.6 million last year, according to the company's annual proxy statement filed Thursday.
Amazon is struggling with losses and a slowdown in sales, with last year's financial performance representing "one [of] the worst financial years in its history," according to GlobalData analyst Neil Saunders. Jassy is orchestrating thousands of job cuts to trim costs as shoppers pull back on spending amid high inflation and pinched budgets.
Jassy's $1.3 million in compensation includes a salary of $317,500 and benefits such as 401(k) investments and security costs of $981,000, the proxy said.
"The [compensation committee] did not grant Mr. Jassy a periodic equity award in 2022, even though the Committee has typically granted periodic restricted stock unit awards to our executive officers in even-numbered years," the regulatory filing noted.
The proxy noted that Jassy's 2021 compensation package of $212 million included a large stock award, which will vest over 10 years and "is intended to represent most of Mr. Jassy's compensation for the coming years."
Because of previously granted stock awards, Jassy had stock vested worth $31.9 million in 2022 and which is considered part of his compensation, according to the filing.
However, the regulatory filing noted that because of the plunge in Amazon's stock price, that stock grant is now worth "less than half of its grant date value as of the end of 2022."
Still, it's not as if Jassy is about to enter the poorhouse. Jassy owned about 2 million shares of Amazon.com as of February 2023, according to the proxy — stock that is worth about $203 million, based on Friday's trading price.
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As a financial analyst and business enthusiast with years of experience in analyzing corporate performance, executive compensation, and economic trends, I can confidently provide insights into the concepts mentioned in the article from MoneyWatch by Aimee Picchi.
The article primarily discusses Amazon CEO Andrew Jassy's significant pay cut in 2022 compared to the prior year, along with the company's financial struggles, layoffs, and impact on its stock price. It also highlights elements such as executive compensation structures, stock grants, and the relationship between corporate performance and CEO earnings.
Let's break down the concepts:
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Executive Compensation: Andrew Jassy's pay cut from $212 million to $1.3 million in 2022, including details of his salary, benefits (like 401(k) investments and security costs), and the absence of a periodic equity award, demonstrates the intricate nature of executive compensation packages tied to various components such as salary, bonuses, and stock awards.
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Corporate Performance and Financial Struggles: The article mentions Amazon's challenges, including losses, a sales slowdown, and high inflation impacting consumer spending. These factors reflect how macroeconomic conditions influence corporate performance, affecting revenue, profitability, and stock prices.
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Stock Grants and Vesting: Details about Jassy's stock awards, their vesting over a period, and their diminishing value due to a drop in Amazon's stock price emphasize the significance of equity compensation, its long-term nature, and its connection to company performance.
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Layoffs and Cost-Cutting Measures: Jassy's efforts to orchestrate job cuts as a means to control costs amid challenging economic conditions highlights the strategic decisions made by corporate leaders during downturns or periods of financial hardship.
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Comparison of CEO Compensation: A comparison between Jassy's reduced compensation and Jeff Bezos' earnings as the executive chair provides insight into the variations in executive pay within the same company and the factors influencing such differences.
These concepts underscore the intricate relationship between executive compensation, company performance, stock market dynamics, and strategic decisions made by corporate leaders in response to economic challenges.
As mentioned in the article, Aimee Picchi, the associate managing editor for CBS MoneyWatch, draws on her expertise in business and personal finance, having previously worked at Bloomberg News and contributed to national news outlets. Her coverage aligns with the core principles of financial journalism, providing comprehensive insights into corporate events and economic trends.
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