Amazon Pay Isn’t What It Used to Be. Will Its Top Employees Stick Around?

Today at Big Technology, we’re continuing our series where Amazon veteran Kristi Coulterexamines the company’s strategy and trajectory after working there for twelve years.

This week, Coulter looks looks at the company’s stock-heavy pay strategy, and how it might influence its ability to retain top talent.

Amazon Pay Isn’t What It Used To Be. Will Its Top Employees Stick Around?

By Kristi Coulter

My twelve years at Amazon were thrilling and often fun. They were also grueling, nerve wracking, and disheartening. I came close to fleeing many times. But those years were also lucrative, and the money kept me around arguably well past the point of sanity. The stock kept hitting amazing new highs, and every year I received a bunch of new shares, which paid for my weekly psychotherapy sessions with plenty left over for retail therapy, reinvestment, and retirement. 

Officially, we weren’t supposed to care that much about the money. Amazon says it wants to hire “missionaries, not mercenaries,” and most of us were genuinely passionate about our jobs. But we were also mid-level workers in one of America’s most expensive cities, at a company where the focus was generally on what we were doing wrong and thank-yous were few and far between. Of course the money mattered. Privately, we admitted to each other that without so much of it, we might bail. 

Now, the hypothetical of whether Amazon can keep its employees without paying enough to numb the pain is becoming reality. The company’s share price — though recently hitting all time highs — has been effectively flat over since mid 2021, making the company’s outsized, stock-based comp packages a thing of the past. Instead of regularly earning well beyond expectations, Amazon’s employees are now working through layoffs, cost cutting, and declining morale. If it keeps up, the company may face a talent crisis.

I worked at Amazon until 2018, and its rising stock price was always a core component of employee compensation. I can share a bit about how it worked: At performance-review time, I typically received low-single-digits salary bump and a stock award valued at well over my base pay, sometimes even double or triple. The salary bump took effect right away, and the shares were scheduled to start vesting around eighteen months later. So while my monthly comp was on the low side, I had nice windfalls to look forward to every spring and fall if I stuck around.

In those days, the stock frequently blew past Amazon’s growth assumptions, and so for years in a row I earned substantially more than Amazon intended. Even if it did have a golden-handcuffs effect, it was pretty awesome. Before I left, Amazon’s stock had risen so far above expectations that I and many of my peers made two-thirds of our income via stock 

When I finally left, I purposely didn’t look at the value of the stock I was forfeiting for fear I’d lose my nerve. With hindsight, I can’t say that the things I put myself through for money were always worth it. Still, the money was nice, and enabled me to make investments that will (knock wood) someday support a stable and comfortable retirement. 

With Amazon now trading just below the $186 share price it reached in 2021, the days of those lavish pay packages are over. Employees who once saw their packages reach orders of magnitude larger than Amazon’s estimates have come in closer or even below their estimated comp. People within the company regularly tell me they’re thinking about leaving, and longtime veterans aren’t sure it’s worth it. 

“Jassy is in pure cost-cutting mode now,” one employee told me, referring to the layoffs and pullback on some more experimental projects from the Jeff Bezos Era (including Just Walk Out Shopping, whose launch team I worked on). That includes aspects of employee pay.

Amazon recently confirmed it’s freezing base-pay increases for employees at mid-level and up, saying the increases are unnecessary to keep employees in range now that the stock is rebounding. Fair enough — even if it depends on the rebound being a sustained one — but it’s not something that happened during my stock-boom tenure, and the message to employees may not land well. 

In fact, some employees are reporting on company Slack channels that their compensation will drop by up to 20% between 2024 and 2025. And while Amazon says that’s due to the stock rebound, which is leaving many employees overpaid in 2024, it didn't grant additional stock or cash to bring employees back into range amid the stock plunges.

There are also rumblings of promotion freezes in some departments. Frankly, I’m not sure what to make of this, since Amazon has always been careful to separate job and level changes from the expectation of an immediate comp increase. But I presume some percentage of promotions will push employees into new pay bands, and maybe that’s enough for a company bent on driving down costs to push the pause button. 

It’s puzzling, though, that Amazon would risk alienating its top employees. “They don’t care,” said the employee who told me Jassy was in cost-cutting mode. “They’ll take the voluntary attrition however they can get it.” He reminded me that when people leave voluntarily, Amazon saves on salary and unemployment contributions. 

Don’t get me wrong: Amazon’s current corporate workforce is in no danger of starving. But the overall message the company is sending seems to be that the reward for strong performance is merely continued employment. That may suffice in the current tech climate, but I suspect that even fear of unemployment will have its limits as a retention factor. 

In a corporate culture where employee appreciation is scarce and criticism heavy, money is the closest substitute for caring, and I liked knowing that if I continually pushed myself and excelled, there’d always be more of it. I had some sense of driving my own destiny.

If I were fighting Seattle traffic every day to drive to campus to sit on Zoom calls with the D.C. and London offices, and absorbing the work of laid-off colleagues, and wondering when the ax might fall for me, and knew that my efforts had a weaker direct tie to my financial success? I think I know what I’d do. It remains to be seen if my former colleagues will follow suit, and if that’s what Amazon is hoping they’ll do. 

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