- Amazon insiders and documents suggest the company may be planning to change how it pays employees.
- One insider said Amazon had considered stock awards to up total pay for some employees by 25 to 40%.
- Amazon is facing what some call an “exodus” of senior talent and growing dissatisfaction with pay.
Some Amazon insiders are expecting the company to change the way it pays employees as it faces what some call an “exodus” of senior talent and growing dissatisfaction with pay.
The company has considered measures including special stock awards, higher counteroffers, and an internal tool to identify when employees are dissatisfied at the company, according to current and former employees and documents viewed by Insider.
One Amazon insider said at least one part of the company once considered special stock awards that vest every six months over 30 months to increase the total compensation of some employees by 25 to 40% to remain competitive, but the status of that plan is unclear. This person said the proposal was a direct reaction to attrition across the company.
Amazon is also quietly hiring a team to communicate changes in compensation to employees internally, a person familiar with the matter said. Insider viewed an internal document showing a six-month position in which someone would explain how compensation worked and “what changes and why,” though a job posting for the position does not appear online.
Together, these developments hint at a change in how Amazon treats compensation, which employees have said is lower than that of competitors and has led to a slew of high-level departures. Amazon senior execs who recently left the company have cited stalling growth, higher pay elsewhere, and a tough culture. And the perception of low base pay emerged this year as one of the top reasons corporate employees were considering leaving, according to the results of an internal sentiment survey conducted this summer, screenshots of which were obtained by Insider.
An Amazon spokesperson said the company regularly reviewed compensation and benefits to ensure competitiveness. The spokesperson also disputed Insider’s reporting but declined to provide clarification.
Amazon employees can often make more money elsewhere
Like many tech companies, Amazon compensates its corporate employees partially in cash and partially in restricted stock units. Amazon differs in that it caps most of its corporate workers’ base pay at $160,000, relatively low compared with its corporate peers. (Base pay for workers in some locations, such as the Bay Area and New York City, is slightly higher.) The company also back-loads employees’ vesting schedule, which some workers have said can be another pressure point. Only 20% of Amazon employees’ shares vest in the first two years after they’re awarded.
Amazon shares have remained more or less at the same level since the third quarter of 2020 after a meteoric 2020 rise boosted the value of many Amazon workers’ compensation packages, and nearly doubled the company’s
to $1.7 trillion.
“You wouldn’t want to leave in 2020,” said a current Amazon tech employee, who spoke on condition of anonymity because they were unauthorized to speak about internal matters. As the value of Amazon shares stabilized through 2021, this person said, some employees eyed career moves they might not have considered last year.
Employees recently told Amazon about their mounting compensation concerns. In the company’s annual employee sentiment survey, which gauges worker reaction to a variety of subjects, base pay was the second most common reason for wanting to leave, with 44.6% of respondents listing it as a factor that contributed to their desire to look for a different job in 2021. Base pay was narrowly behind “don’t see a clear growth path,” which 45% of respondents cited. (Employees could choose more than one response.)
By contrast, only about one-third of Amazon employees who said they were looking for another job from 2018 to 2020 listed base pay as a reason — roughly the same proportion as those who said they were looking for a change or were excited by new opportunities. “Don’t see a clear growth path” was also the No. 1 reason given on the 2018 to 2020 surveys.
Several people who left Amazon told Insider earlier this year that better pay elsewhere was a key reason for their departure. Amazon executives are in high demand by companies offering attractive compensation packages that can easily multiply the salaries for these people.
This issue is not specific to Amazon. Apple, Google, and Facebook’s parent company, Meta, have also been pushed to increase compensation packages to keep top talent from leaving, though current and former employees said the issue was more pronounced at Amazon.
Some insiders are expecting changes
An internal document viewed by Insider showed the company was “seeking a contingent worker to create and manage employee-facing communications and content on the topic of compensation for a global audience.” Insider could not find a job posting for the position online.
The document did not mention any specific changes in employee compensation but said the company needed “help creating new content on what changes and why” and that someone in the six-month position would help explain to employees how compensation worked at the company.
While it’s unclear what changes Amazon is planning, if any, other employees have noticed the company appears to be changing its approach to pay.
One Amazon employee said they received a letter that they’d be eligible for a pay increase in the first quarter, which is uncommon, as many employees expect to receive increases only to keep up with inflation unless they get promoted.
On the social-media platform Blind, users in an internal group for Amazon employees say they’d noticed an increase in “dive and saves,” or countering offers that employees had received elsewhere, according to messages shared with Insider. Others, noting what seemed to be a pattern of unasked-for raises, speculated that Amazon was monitoring daily employee sentiment surveys and giving raises to workers it felt were at risk of leaving. Amazon, according to a screenshot shared on Blind, has also rolled out what it calls a “retention application tool to help managers with pragmatic actions to retain their employees.”
An Amazon manager told Insider that for the first time since he’d been at the company, his superiors had told him that he could counter offers his employees received from other companies.
Zuhayeer Musa, a cofounder of the tech-salaries platform Levels.fyi, said he’d seen a change within Amazon’s retention strategy.
“We’ve definitely seen much more heightened offers from Amazon, which typically wouldn’t be as competitive with some of the other larger
companies,” he said. “Now, they are definitely competitive.”
Amazon employees on Levels.fyi’s internal message board said they’d noticed the value of offers had risen by as much as 20% compared with the start of the year and that Amazon was dangling more lucrative signing bonuses in front of prospective hires.
“I do think they need to compete with other companies, and I think they’re trying,” one Seattle tech employee who is considering leaving Amazon told Insider. “As long as they insist we need to be in office in Seattle or another big hub, our money doesn’t go as far.”
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