Amazon is reportedly withholding cash pay raises from senior managers and other leaders this year after the e-commerce giant’s stock soared well-above what was expected.
The move primarily affects employees who are classified as Level 6 or higher in Amazon’s internal hierarchy, such as senior managers and engineers, according to Fortune, which first reported the decision. But the compensation update applies to all employees, regardless of placement on the totem pole.
A spokesperson for the company told Fortune that senior employees receive more restricted stock in their compensation packages than other workers. As a result, they stand to benefit greatly from Amazon stock’s 85% increase in value over the past 12 months. Typically, the Seattle-based company calculates compensation by baking in a 15% year-over-year stock gain.
“[M]any employees’ compensation will meaningfully exceed the amount that the company planned for them to earn when we set compensation last year and in prior years’ compensation cycles,” Amazon spokesperson Margaret Callahan told the outlet, adding that cash base pay increases are being prioritized for employees whose compensation is less rooted in stock.
A representative for Amazon did not immediately respond to a request for comment Thursday morning.
This is just the latest compensation-related hiccup for Amazon. In the past, the company has dealt with attrition rates as high as 81.3% for some tiers of employees. Amazon in 2022 raised its maximum base pay for corporate and tech workers from $160,000 to $350,000 to bridge the gap between its compensation and that of rivals like Google parent Alphabet. But some staff have reported seeing minimal wage increases in the single digits.
The news of Amazon’s compensation adjustments came as it announced a $2.75 billion investment in OpenAI-rival Anthropic, taking its total investment in the artificial intelligence startup to $4 billion. The company has also started expanding same-day pharmacy deliveries.
Amazon stock was largely flat in pre-market trading on Thursday.