Amazon set to raise base salary cap to $350,000
Tech and e-commerce giant Amazon (AMZN) is set to
increase its base salary for its US-based technology and corporate workers. The
company announced on Monday to employees that it has increased the maximum base
pay to $350,000 from $160,000. It also added that the increase only covers the
base pay – a portion of employees’ total salary – and doesn’t include other
benefits such as stock units and sign-on bonuses.
“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 said in an
internal memo to employees.
The memo also stated that Amazon will increase the
overall compensation ranges for its other job units globally and the increases
will be much more reasonable compared to before. The subsequent increase will
apply to Amazon corporate and technology employees worldwide.
Following the economic recovery of the nation, Amazon
like many big-name companies has struggled to hire and retain workers – due to
high competition. Before now, the company boasted of its stock awards used to
entice workers despite having a low base pay. This stock awards strategy seemed
to fail after the company's stock weakened last year, gaining just 2.4%
compared to the 27% jump S&P 500 saw. According to reports, the turnover
rate inside Amazon hit a crisis level, and about 50 vice presidents left the
company in 2021.
In a bid to save its workforce and redeem its image,
Amazon reportedly employed 1.6 million workers as of December 31, 2021. The new
employment included warehouse workers who earn by the hour, and office staff
who earn annual pay. Although Amazon's current base pay increase is only
targeted towards its annual salary earners, it increased its warehouse workers’
salary to $18 per hour from $15 per hour.
The company has spent the past few months investing
heavily in its logistics operations, employing more workers, and paying bonuses
to new employees. This became a concern for some investors who believe that the
company is spending more than it is making. However, the company reported a
strong fourth quarter last week causing its share to soar almost 14% on Friday,
and up 1% to $3,174 on Monday.
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