Amazon’s Public Shareholders Show Their Hand

It looks like Amazon’s public shareholders are beginning to assert themselves. Amazon disclosed today that last year it got feedback from some shareholders that it should grant smaller equity awards to top executives, with payouts based on their hitting specific performance goals. That’s interesting for a few reasons. One is that the feedback came in meetings Amazon set up with shareholders holding a total of more than 30% of its stock—so not tiny investors. Also on the agenda in those meetings was last year’s executive stock awards, which would include new CEO Andy Jassy’s restricted stock grant of $212 million. Imagine being a fly on the wall in those meetings!

Not that Amazon is changing its approach. Jeff Bezos is strongly opposed to tying compensation to “discrete performance goals,” something that is common at companies like Microsoft. As Amazon says in regulatory filings, that approach doesn’t encourage “experimentation and long-term thinking.” It also says most of its large shareholders agree with its compensation philosophy. Still, it’s notable that Amazon acknowledged the existence of dissenting views. Amazon’s regulatory disclosures suggest that in the past couple of years the company has made an effort to solicit shareholder views. That may reflect Amazon’s maturation as a company. But it may also reflect a reality that outside shareholders increasingly hold the upper hand at Amazon as Bezos’ stake shrinks.