Amazon, with centi-billionaire CEO Jeff Bezos at its helm, has increased its minimum wage for hourly workers to $15 per hour.
CNBC reported that the company confirmed via email that they are getting rid of incentive pay and stock option awards in order to afford the hike.
Amazon believes that their new plan “more than compensates” for the loss in benefits, CNBC reported.
“The significant increase in hourly cash wages more than compensates for the phase out of incentive pay and [restrictive stock units],” Amazon’s spokesperson said in a statement emailed to CNBC.
“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. In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable.”
The Guardian reported that, “The removal of employee share and incentive schemes could cost thousands of workers £1,500 in a single year, according to the GMB union, which accused the online retailer of imposing ‘a stealth tax on its own wage increase.'”
“The retailer’s warehouse workers currently receive one Amazon share, worth $1,961 (£1,508), at the end of every year they work at the company, and an additional share once every five years. If they hold on to the shares for two years, they can cash them in tax free, according to the GMB.”
CNBC reported, however, that “workers affected by the change will get a chance to review the new pay structures and share any concerns they might have with the company,” according to someone familiar with the issue.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” said Bezos, according to Amazon’s blog.
“We’re excited about this change and encourage our competitors and other large employers to join us.”
In addition to their change in payment structure, the company also advocates that the federal minimum wage be increased as well.
“We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago,” said Jay Carney, senior vice president of Amazon global corporate affairs.
“We intend to advocate for a minimum-wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.”
However, according to GBM, this is not a benefit to the employees that they represent.
According to Tim Roache, GBM’s General secretary, Amazon had not said anything about cutting staff benefits when the new hourly pay rates were announced, The Guardian reported.
“This is a basically a stealth tax by the employer on its own wage increase — a clear case of robbing Peter to pay Paul.
Roache continued, “If Jeff Bezos — the richest man in the world — really wants to give hardworking staff a pay rise, he should let them keep their share options as well as increasing their hourly rate.”
Truth and Accuracy
We are committed to truth and accuracy in all of our journalism. Read our editorial standards.