WHAT’S BEING CLAIMED:
- A $15 hourly compensation increase was announced by Amazon at the expense of its VCP and RSUs.
- Employees’ preference for the “predictability and immediacy of cash to RSUs,” was stated by the company as the reason for the move.
- Although many workers in Amazon criticized the news, Amazon insisted that the changes will be for their benefit.
Amazon raised its hourly minimum wage to $15 yesterday at the same time sacrificing its monthly bonuses and stock options. In a blog post yesterday, the company cited the “predictability and immediacy of cash to RSUs” is preferred by their hourly employees. However, Bloomberg just reported earlier today that a loss in monthly incentives also took effect during the wage hike.
When workers get hired, they get 2 shares of Amazon stock with an additional stock option each year. Once the changes take place, the RSU program for stocks that vest in 2020 and 2021 will be terminated. A direct stock purchase will take its stead by the end of next year.
In an email to The Verge, many warehouse employees in Amazon have denounced the news, saying that they would actually lose thousands in incentives. Many of them rely on their RSU and VCP incentives aside from their hourly compensations. A performance-based monthly bonus program pays affords workers an 8 percent bonus and 16 percent during the peak seasons of November and December.
Via Twitter, Senator Bernie Sanders heaped praises on Amazon for its wage raise. Amazon workers, however, tweeted back and said that it’s not a raise they are getting, but paychecks will actually be cut come November 1st.
Replying to @SenSandersTalked to Amazon workers yesterday and it turns out this is a scam. They are taking away certain benefits to offset the costs. In many cases, workers will be earning less. Please don’t buy this hype.
They also tweeted that they wished the wage hike news would garner more attention. This is because a lot of families working in Amazon who will lose all incentive and stock programs will be making $3-6k lesser per year now.
The much-publicized move is being viewed by most of the company’s warehouse workers as a publicity and political play. It remains to be seen if phasing out the incentive pay will actually benefit them.
However, the company emphatically states that the changes are for the interests of the employees. They say that the significant hourly wage increase is more than enough to counterbalance the eliminated RSUs and incentives.
In an emailed statement to CNBC, a spokesperson for Amazon said: “We can confirm that all hourly operations and customer service employees will see an increase in their total compensation as a result of this announcement. Additionally, because it’s no longer incentive-based, the compensation will be more immediate and predictable.”
Source: The Verge