Amazon shareholders agree to pay CEO Gacy $212 million, reject worker safety and climate initiatives
At its annual shareholder meeting, Amazon investors agreed to pay CEO Andy Gacy more than $212 million and voted against 15 motions requiring the company to report worker safety, climate goals, wage rates, the use of facial recognition technology and its stance on workers’ right to form unions.
“We will continue to do our part,” Gacy told shareholders on Wednesday. “We make our customers’ lives better and easier every day, innovating to make them so and taking care of our employees and our communities along the way.”
Four people who work at Amazon warehouses also spoke to shareholders on Wednesday, asking for support on decisions that would require Amazon to consider hiring an hourly employee on its board, affirming its support for workers’ right to form unions and providing a detailed report on working conditions at its distribution centers.
“This is the bottom line, I am a loyal Amazon worker who, like the shareholders gathered here, desperately wants our company to succeed,” said Angelica Maldonado, Vice President of the Amazon Workers Union. “We all think it’s time for Amazon management to get back on track and run a successful business.”
Jesse told shareholders Wednesday that he’s optimistic about Amazon’s future, as he delved into detail about the company’s strategy to invest in new industries that could change the business model in the same way that Amazon Web Services is already in the cloud.
Before betting, Amazon asks itself a few questions: Could it be big enough to move the needle on Amazon? Is this industry really well served? Does Amazon have a new approach? Does the company specialize in this field, and if not, can it be obtained quickly?
So far, these questions have led to investments in entertainment, self-driving vehicles, personal assistant devices like Alexa, and satellite arrays to expand broadband Internet access.
If any of those become “the fourth pillar for us, on top of Marketplace, Prime and AWS, we’re a different company,” Jassy said. “I think they are worthwhile bets.”
How Much Is Jassy Made?
Shareholders voted Wednesday to approve Jassy’s compensation package, despite recent comments from some investors and unions that pay was “excessive.”
Most of his pay for 2021 — $211 million of the $212 million total — comes from stock awards linked to Jassy’s promotion from Amazon Web Services president to company CEO in July. Amazon says most of these stock awards will accrue over the next 10 years.
But some investors are skeptical of the package. The International Brotherhood of Teamsters released an analysis that found Gacy’s wages were more than 6000 times what an Amazon broker worker earned in a year. The Teamsters said average wages are dropping to $19 an hour.
Investors firm Glass Lewis and Institutional Shareholder Services urged shareholders to vote against Gacy and other executives’ compensation package, arguing that the pay was too high and should be linked to the company’s performance.
Investors generally expect CEO pay to be tied to pre-set goals — both in the short and long term — the ISS wrote in its report. In this case, the shares awarded to Jassy and the other executives would maintain “significant value” even if the share price fell.
The report continued, “There is a mismatch between the CEO’s salaries and the company’s performance.”
The ISS also noted an imbalance in pay packages to David Clarke, CEO of Amazon’s global consumer division, and Adam Selipsky, who now leads Amazon Web Services. On Wednesday, shareholders voted to approve compensation of $56 million for Clark and $81 million for Selipsky.
Amazon said in a proxy statement issued before the shareholder meeting that it had spoken with investors about executive compensation. A “small minority” said the company should award smaller bonuses with payouts tied to performance goals, but most said they “understand and appreciate” the pay structure in place, the company said.
Amazon says it’s not linking payment to short-term goals, in order to encourage more thinking and innovation in the long-term.
Although Amazon shareholders have voted to support compensation packages, shareholders in general are increasingly expressing their disapproval of executive pay, according to a report this month from the ISS.
The ISS found that investors from 20 record companies in the S&P 500 rejected compensation proposals in 2021.
Shareholders also voted Wednesday to approve all 11 candidates for Amazon’s board of directors, despite a campaign to vote against two longtime members, Daniel Hottenlecher and Judith McGrath.
Led by investor groups from New York, the campaign accused Huttenlocher and McGrath of being “unresponsive” and providing “inadequate oversight” of Amazon’s human capital challenges, including a high infection rate, high labor turnover and concerns about labor rights abuses.
Investigating infection rates
Amazon shareholders voted against two proposals to require the company to report on infection rates at its warehouses, as well as one to ask Amazon to scrap a quota system that holds workers to strict expectations about how many packages they will move in a shift.
“Amazon warehouses are significantly more stressful and riskier than any other warehouses,” Isaiah Thomas, a warehouse worker, told shareholders on Wednesday. “Do you want to work in a place where you are constantly monitored by surveillance, or where there are quotas that are physically unsustainable or where you are penalized for not working fast enough? This is what it is like to work at Amazon.”
Amazon’s board of directors urged shareholders to vote against these proposals, arguing that the company is “committed to promoting a safe, healthy and inclusive work environment” and is already reporting on its workforce.
“For us, one incident is too many,” the board wrote in a proxy statement issued before the meeting. “We believe that all workers should come to work and return safely to their homes.”
Many workers, as well as federal and state regulators, say Amazon expects workers to move at an unsafe pace. Most of these workers say they must meet their quota — the expected number of packages they must pick, pack or store on shift — or risk losing their jobs.
In its proxy statement, Amazon said less than 0.4% of employees “disconnected” from the company due to their inability to do their jobs.
To improve worker safety, Amazon is experimenting with new technologies such as wearables that use sensory feedback to alert a worker to “low body position” and help change their habits.
Jesse told shareholders Wednesday that Amazon has 8,000 people working solely on safety. “I am confident we will continue to improve,” he said. “We want to improve our workplace every day, every week, every month.”
While Amazon says the infection rate in its warehouses has improved, thanks to a hiring spree and an investment of $300 million in new safety projects, analysis of data the company provided to the Occupational Safety and Health Administration suggests otherwise.
The Center for Strategic Organization, a coalition of labor unions, found that the infection rate of Amazon warehouse workers increased 20% in 2021, while the infection rate of delivery drivers jumped more than 40%.
Shareholders voted against a decision to launch an independent audit and report on working conditions in Amazon warehouses, as well as a decision requesting a report to examine whether Amazon’s business practices can cause racial and gender disparities in workplace injuries.
The proposal said that Amazon disclose infection rates to the federal government, but not to the public or investors. The proposal said “Amazon investors lack transparency in how Amazon analyzes the negative impacts” of the company’s business practices.
In response, Amazon’s board said it launched a racial equality audit to assess any disparate racial impacts on the company’s hourly employees.
Amazon employee and contributor Daniel Olayola made a proposal that bypassed data collection and asked Amazon to end the quota system. Jennifer Bates, an Amazon warehouse worker in Bessemer, Alabama, has introduced a proposal to include hourly workers on Amazon’s board of directors, in an effort to make sure management understands its “most important asset: its workers.”
Maldonado, vice president of the Amazon Workers Union, has asked shareholders to ask Amazon to report on how it will protect the right of employees to organize. The Teamsters union has submitted a proposal asking Amazon to disclose its lobbying expenditures, following accusations that Amazon hired lobbyists that worked with anti-union trade groups.
Amazon is also in a dispute over its use of plastic.
A December report from Oceana Conservation Group estimated that the company produced nearly 6 million pounds of plastic in 2020, a 29% increase from the previous year.
Amazon says this is a “seriously flawed” account that overestimates its use of plastic by 300%.
Shareholders on Wednesday voted against a resolution requiring the company to prepare its own report to determine how much plastic it is using, the advantages of reducing its reliance on plastic and the potential risks of continuing business as usual.
“Our company has been long overdue in taking action on this important issue,” the proposal reads.
Amazon’s board of directors urged shareholders to vote against the proposal, saying the company is “committed to protecting the planet” and is already taking steps to reduce plastic use.
She launched a “Frustration Free Packaging” program that provided financial incentives to encourage manufacturers to use 100% recyclable packaging. It has set a goal of packaging all Alexa devices and other tech products in 100% recyclable packaging by 2023. It’s creating “just-sized boxes” that eliminate the need for additional plastic cushioning inside the packaging.
Since 2015, Amazon says its cutting back on plastic has saved more than 1 million tons of packaging materials — the equivalent of 2 billion shipping boxes.
Oceana estimated that up to 23.5 million pounds of plastic packaging waste in the Amazon entered and polluted its waterways in 2020.
The group launched a campaign in the week before the shareholder meeting, meeting outside Amazon’s headquarters in South Lake Union and putting up billboards around Seattle urging shareholders and residents to sign up in support of the proposed report.
A similar proposal garnered 35% of shareholder support last year, Oceana says.
At this year’s meeting, shareholders also voted against a proposal to report the company’s retirement holdings, following concerns that the money could go toward oil, coal and other industries that don’t align with Amazon’s stated climate action goals.
Technology and payment rates
On Wednesday, shareholders also voted against two proposals that focus on how customers can use Amazon’s monitoring and facial recognition technology.
Both proposals requested a detailed report on whether customers could use the technology to violate civil rights or contribute to human rights abuses.
Amazon said in its agent statement that it is “committed to the responsible use of artificial intelligence and machine learning.” She went on to say that her technology could also be “used to solve complex problems that benefit society,” particularly in terms of keeping neighbors safe and preventing human trafficking.
Meanwhile, investor Arjuna Capital has submitted a proposal asking Amazon to provide a more detailed report on pay rates by gender, race and job title.
Arjuna Capital said it is the fifth year this proposal has been made.