At its annual meeting for shareholders, Amazon's investors approved a more than $200 million payout for CEO Andy Jassy and voted against 15 proposals asking the company to report on worker safety, climate goals, pay rates, use of its face recognition technology and its stance on workers' right to unionize.
"We're going to continue to do our part," Jassy told shareholders Wednesday. "Making our customers' lives better and easier every day, inventing to make it so and taking care of our employees and communities along the way."
Four people who work in Amazon's warehouses also spoke to shareholders Wednesday, asking for support on resolutions that would require Amazon to consider placing an hourly employee on its board of directors, state its support for workers' right to form unions and provide a detailed report on working conditions in its distribution centers.
"Here's the bottom line, I am a loyal Amazon worker who, like shareholders gathered here, very much wants our company to succeed," said Angelika Maldonado, vice president of Amazon Labor Union. "We all believe it is time that Amazon management gets back on track and runs a successful business."
Jassy is optimistic about Amazon's outlook, he told shareholders Wednesday, delving into details about the company's strategy for investing in new industries that could alter the business model in the same way its cloud computing business, Amazon Web Services, already has.
Before taking a bet, Amazon asks itself a few questions: Could it be big enough to move the needle at Amazon? Is that industry already well served? Does Amazon have a new approach? Does the company have competence in that area, and if not, can it acquire it quickly?
So far, those 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 "becomes the fourth pillar for us, on top of Marketplace and Prime and AWS, we're a different company," Jassy said. "I think they're very worthwhile bets."
How much is Jassy making?
Shareholders voted Wednesday to approve Jassy's compensation package, despite recent comments from some investors and unions that the pay was "excessive."
Most of his compensation in 2021 — $211 million of a total $212 million — comes from stock awards connected to Jassy's promotion from head of Amazon Web Services to CEO of the company in July. Amazon says most of those stock awards are set to vest over the next 10 years.
But some investors are skeptical of the package. The labor union International Brotherhood of Teamsters released an analysis that found Jassy's pay was more than 6,000 times what the median Amazon worker earns in a year. The Teamsters said that median pay rate falls at $19 an hour.
Investor firms Glass Lewis and Institutional Shareholder Services both urged shareholders to vote against the compensation package for Jassy and other executives, arguing the pay was too high and should be tied to the company's performance.
Investors generally expect executive pay to be linked to preset goals — for the short and long term — ISS wrote in its report. In this case, shares awarded to Jassy and other executives would "maintain significant value" even if the stock price drops.
There is a "misalignment between CEO pay and company performance," the report continued.
ISS also pointed to a misalignment in pay packages for David Clark, the CEO of Amazon's worldwide 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 released before the shareholders meeting that it had spoken with investors about executive compensation. "A small minority" said the company should grant smaller awards with payouts tied to performance goals but most said they "understand and appreciate" the pay structure in place, the company said.
Amazon says it doesn't tie pay to short-term goals, in order to encourage more long-term thinking and innovating.
Though Amazon shareholders voted to support the compensation packages, shareholders overall are increasingly voicing disapproval about executive pay, according to a report released this month from ISS.
Investors from a record 20 companies in the S&P 500 rejected compensation proposals in 2021, ISS found.
Shareholders also voted Wednesday to approve all 11 nominees for Amazon's board of directors, despite a campaign to vote against two long-standing members, Daniel Huttenlocher and Judith McGrath.
Led by investor groups from New York, the campaign accused Huttenlocher and McGrath of being "unresponsive" and providing "insufficient oversight" over Amazon's human capital challenges, including the high rate of injury, high turnover and concerns about labor rights violations.
Investigating injury rates
Amazon shareholders voted against two proposals to require the company to prepare a report on injury rates at its warehouses, as well as one proposal requesting Amazon eliminate its quota system that holds workers to strict expectations of how many packages they'll move in a shift.
"Amazon's warehouses are more high-pressure and dramatically more dangerous than any other warehouses," Isaiah Thomas, a warehouse worker, told shareholders Wednesday. "Would you want to work in a place where you're constantly watched through surveillance, where you have physically unsustainable quotas or where you're punished for not working fast enough? This is what it's like to work for Amazon."
Amazon's board of directors urged shareholders to vote against those proposals, arguing that the company is "committed to promoting a safe, healthy and inclusive working environment" and already provides reporting on its workforce.
"For us, one incident is too many," the board wrote in its proxy statement released before the meeting. "We believe that all workers should come to work and return home safely."
Many workers, as well as state and federal regulators, say Amazon expects workers to move at a pace that is unsafe. Most of those workers say they must meet their quota — the expected number of packages they must pick, pack or stow in a shift — or risk losing their job.
Amazon said in its proxy statement that less than 0.4% of employees were "separated" from the company due to their inability to perform their job.
To improve worker safety, Amazon is piloting new technologies like wearables that use sensory feedback to alert a worker of "weak body posture" and help change their habits.
Amazon has 8,000 people who work only on safety, Jassy told shareholders Wednesday. "I'm confident we'll keep improving," he said. "We want to improve our workplace every day, every week, every month."
While Amazon says the rate of injury at its warehouses has improved, thanks to a hiring spree and a $300 million investment in new safety projects, an analysis of data the company submitted to the Occupational Safety and Health Administration indicates the opposite.
The Strategic Organizing Center, a coalition of labor unions, found the rate of injury for Amazon warehouse workers increased 20% in 2021, while the rate of injury for delivery drivers jumped more than 40%.
Shareholders voted against a resolution to launch an independent audit and report of the working conditions in Amazon warehouses, as well as a resolution asking for a report to examine whether Amazon's business practices could be causing racial and gender disparities in workplace injuries.
Amazon does disclose injury rates to the federal government, the proposal said, but not to the public or to investors. "Amazon investors lack transparency into how Amazon analyzes adverse impacts" of the company's business practices, the proposal read.
In response, Amazon's board of directors said it had launched a racial equity audit to evaluate any disparate racial impacts on the company's hourly employees.
Daniel Olayiwola, an Amazon worker and shareholder, introduced a proposal that went a step beyond collecting data and asked Amazon to end its quota system. Jennifer Bates, a worker from Amazon's warehouse in Bessemer, Alabama, 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, the vice president of Amazon Labor Union, asked shareholders to require Amazon to report on how it will protect employees' right to organize a union. The Teamsters union introduced a proposal asking Amazon to disclose its lobbying expenditures, following accusations Amazon had hired lobbyists that worked for anti-union trade groups.
A report on plastics
Amazon is also locked in a dispute about its use of plastic.
A December report from the ocean conservation group Oceana estimated the company generated nearly 6 million pounds of plastic in 2020, a 29% increase from the year before.
Amazon says that's a "seriously flawed" calculation that overestimates its plastic use by 300%.
On Wednesday, shareholders voted against a resolution that would require the company to create its own report to quantify how much plastic it used, the benefits to reducing its reliance on plastic and the potential risks of continuing business as usual.
"Our company is long overdue on 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 its plastic use.
It launched a "Frustration-Free Packaging" program that offered financial incentives to encourage manufacturers to use 100% recyclable packaging. It set a goal to package all of its Alexa devices and other tech products in 100% curbside recyclable packaging by 2023. And it is working on creating "right-sized boxes" that eliminate the need for extra plastic cushioning inside the package.
Since 2015, Amazon says its reduction in plastic has saved more than 1 million tons of packaging material — the equivalent of 2 billion shipping boxes.
Oceana estimated up to 23.5 million pounds of Amazon's plastic packaging waste entered and polluted waterways in 2020.
The group launched a campaign in the week leading up to the shareholder meeting, gathering outside of Amazon's headquarters in South Lake Union and placing billboards around Seattle urging shareholders and residents to sign on in support of the proposed report.
A similar proposal garnered support from 35% of shareholders last year, Oceana says.
At this year's meeting, shareholders also voted down a proposal to report on the company's retirement holdings, following concerns that those funds could be going toward oil, coal and other industries that don't align with Amazon's stated climate action goals.
Technology and pay rates
On Wednesday, shareholders also voted against two proposals focused on how customers are using Amazon's surveillance and face recognition technology.
Both proposals requested a detailed report on whether customers could be using the technology to violate civil rights or contribute to human rights violations.
Amazon said in its proxy statement it is "committed to the responsible use of artificial intelligence and machine learning." Its technology can also "be used to solve complex problems that benefit society," it continued, particularly related to keeping neighbors safe and preventing human trafficking.
Meanwhile, investor Arjuna Capital introduced a proposal asking Amazon to provide a more detailed report on pay rates by gender, race and job title.
Arjuna Capital said it was the fifth year it had introduced this proposal.
