Amazon Giving Out Record Amounts of Stock to Employees. Why?

How does a company retain its most valuable employees? Does it come down to money, or building a culture so incredible that nobody ever wants to leave?

At Amazon, the quest to retain valuable technologists reportedly boils down to one thing: stock. According to an analysis by The Information, the e-commerce giant is handing out “record amounts” of stock, including 138 million restricted stock units to employees in the second quarter of 2022.

That’s “an 82 percent increase from the number of restricted shares for employees it issued during the same period last year, according to corporate filings,” The Information added. “That’s more shares than Amazon has ever awarded to employees in a single quarter, and more even than the number it issued to workers in all of 2021.”

In February, Amazon boosted its maximum base pay for corporate and technology employees from $160,000 to $350,000. “This past year has seen a particularly competitive labor market and in doing a thorough analysis of various options, weighing the economics of our business and the need to remain competitive for attracting and retaining top talent, we decided to make meaningfully bigger increases to our compensation levels than we do in a typical year,” the company wrote in an internal post reviewed by GeekWire.

But for more experienced technologists at Amazon (and other tech giants), stock is an increasingly massive element in overall compensation. According to levels.fyi, which crowdsources salary data for a wide range of tech companies, an entry-level Amazon software engineer can expect to earn an average of $128,304 in base salary, stock worth roughly $23,163, and a bonus of $19,096, for a total of $170,563. By the time that engineer becomes an SDE III, the average base salary of $161,703 is supplemented by stock worth $171,054 and a bonus of $8,730, totaling $341,487.

For senior executives, of course, the stock payouts might climb even higher. Amazon’s decision to heavily leverage its stock options as a retention tool suggests that even raising the maximum salary wasn’t enough in this current environment—despite many tech giants enacting hiring freezes, the overall tech unemployment rate suggests technologists with the right mix of skills and experience have their pick of opportunities in the broader world.