Here's Why Amazon.com, Inc.'s (NASDAQ:AMZN) CEO May Deserve A Raise

Key Insights

• Amazon.com's Annual General Meeting to take place on 21st of May
• CEO Andy Jassy's total compensation includes salary of US$365.0k
• Total compensation is 78% below industry average
• Amazon.com's total shareholder return over the past three years was 83% while its EPS grew by 43% over the past three years

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Shareholders will be pleased by the impressive results for Amazon.com, Inc. (NASDAQ:AMZN) recently and CEO Andy Jassy has played a key role. At the upcoming AGM on 21st of May, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for Amazon.com

How Does Total Compensation For Andy Jassy Compare With Other Companies In The Industry?

Our data indicates that Amazon.com, Inc. has a market capitalization of US$2.2t, and total annual CEO compensation was reported as US$1.6m for the year to December 2024. We note that's an increase of 18% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$365k.

On comparing similar companies in the American Multiline Retail industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$7.3m. Accordingly, Amazon.com pays its CEO under the industry median. What's more, Andy Jassy holds US$464m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$365k	US$365k	23%
Other	US$1.2m	US$993k	77%
Total Compensation	US$1.6m	US$1.4m	100%

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Amazon.com is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Amazon.com, Inc.'s Growth Numbers

Amazon.com, Inc. has seen its earnings per share (EPS) increase by 43% a year over the past three years. It achieved revenue growth of 10% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Amazon.com, Inc. Been A Good Investment?

Boasting a total shareholder return of 83% over three years, Amazon.com, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

Shareholders may want to check for free if Amazon.com insiders are buying or selling shares.

Important note: Amazon.com is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.