Andy Jassy who took over from Jeff Bezos last year as the new CEO of amazon.com, earned about $214 million in compensation in 2021, according to Amazon’s proxy statement filed with the Securities and Exchange Commission in April. Jassy’s compensation is 6,474 times the median Amazon employee’s salary.
“The value of the new CEO’s $214 million award is excessive in the context of an internal promotion,” says Shareholder advisory firm, the Institutional Shareholder Services (ISS) in a May report shared with clients, according to the Financial Times. “The compensation program lacks any connection to objective, pre-set performance criteria.”
In its own report the same month, shareholder advisory firm, Glass Lewis flagged Jassy’s pay as “excessive” and said shareholders ought to be concerned about further hikes.
“The annualized value of Mr. Jassy’s award considering the vesting period is $21.4 million, reasonable but for the fact that the company only stated that the award is ‘intended to represent most of Mr. Jassy’s compensation for the coming years,’” Glass Lewis said in its report. “The vagueness of the statement and lack of commitment, in our opinion, provide little assurance to shareholders concerned with excessive pay.”
No other CEO of a Fortune 500 company comes close to Amazon’s CEO-to-worker pay ratio. The median CEO compensation at Fortune 500 companies was 205 times a typical worker’s annual salary in 2021, according to Fortne.com.
But Amazon stated in the filing that Jassy’s high pay was because of a special restricted stock award to him when he was promoted to CEO in 2021. Jassy replaced Jeff Bezos as Amazon.com’s CEO in July 2021. He previous supervised the company’s cloud computing division for 15 years.
Jassy’s salary was $175,000, according to the report. The rest came almost entirely from the stock award. The award vests over 10 years, meaning at the end of ten years in 2031, he will own all of it.
In a comment to Fortune, an Amazon spokesperson says Jassy’s 2021 pay package and what it “equates to from an annual compensation perspective is competitive with that of CEOs at other large companies.”
CEOs of seven companies received pay packages in 2021 worth more than 2,000 times the median worker’s salary: Warner Bros. Discovery, Expedia, Gap, ManpowerGroup, McDonald’s, TJX Companies, and Yum Brands. And in total, 25 Fortune 500 companies gave their CEOs over 1,000 times what their typical employees made in 2021.
Second to Jassy’s pay ratio is Warner Bros. Discovery’s CEO, David Zaslav who received $246,573,481 compensation package, making his pay 2,972 times greater than median employee wages of $82,964.
A recent Fortune report ranked Zaslav as the second most overpaid CEO in the Fortune 500: Under Zaslav, company shares have underperformed the S&P 500 with an annualized return of 5.8% compared to 9.4% for the broader market.
Although their compensation was astronomical, neither Jassy nor Zaslav made the most of the eight Fortune 500 companies with the highest CEO-to-worker pay ratios. At Expedia, Kern was given roughly $297 million for the year, but because the typical Expedia worker makes $102,270, he earned 2,897 times more than the median worker salary, which is smaller than his peers.
Syngal—the only woman CEO on the list—had the lowest pay package in 2021, just over $18 million. Gap also paid its typical employee, a part-time sales associate working in Canada, the least, at $7,348 annually. That combination placed the retailer fourth in terms of pay ratio, with Syngal making 2,485 times more than the sales associate.
According to the Economic Policy Institute, CEO pay has soared 1,322% since 1977 , while typical worker compensation has risen only 18%. Much of that compensation is because vested stock awards and stock options have become a larger component of executive pay.