Exclusive: Many senior Amazon employees won’t get cash raises this year
Amazon’s senior managers and other senior leaders won’t receive cash pay raises this year, Fortune has learned, eliminating a key reward for top employees at the online retailing giant.
The move applies to employees whose roles are classified internally as Level 6 or higher, which is more or less middle management and above. But Level 6 roles also include some individual contributors, such as senior software engineers. The compensation update applies to all employees at these levels, whether they are in office desk jobs or in managerial roles inside Amazon facilities such as fulfillment centers.
Historically, total compensation packages for many Amazon corporate employees consist of a larger ratio of stock compensation than at other tech companies. As such, Amazon spokesperson Margaret Callahan made clear in a statement the company’s belief that senior Amazon employees have already benefited greatly from Amazon’s share price increase of around 80% over the past 12 months.
“Amazon’s compensation philosophy emphasizes ownership, which means that a portion of employee compensation includes RSUs,” Callahan said in the statement to Fortune. “The more senior you are in the company, the more your compensation includes RSUs than cash base pay. Due to the growth in Amazon’s stock price over the past year (approximately 77%), many employees’ compensation will meaningfully exceed the amount that the company planned for them to earn when we set compensation last year and in prior years’ compensation cycles. As a result, for this year’s compensation cycle, we are prioritizing cash base pay increases for employees whose compensation is weighted more heavily in base pay as opposed to stock.”
