Like many others, Amazon has been struggling with hiring and retaining its talent of late.
Amazon is increasing the base salary cap for its corporate and tech employees from $160,000 to $350,000.
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To Affect Every Employee Differently
This is more than double the earlier figure, the maximum base salary it could pay to its employees.
It has not said how many will be eligible for this hike.
But it did say in an internal memo that “these updates to the base pay cap and the total compensation ranges will affect every employee differently.”
How It Will Work
It is increasing the compensation ranges of most jobs globally and will also change the timing of compensation for employees when they are promoted.
Managers will review compensation at the time of promotion and issue additional stock awards mid-year as warranted, bringing them into the new pay range.
In Light Of Great Resignation
The company said that it is taking this step due to a “particularly competitive” labor market and its need to retain the old and be attractive to new talent.
Therefore it has made “meaningfully bigger increases” to its compensation levels than it would do in a typical year.
Like many others, Amazon has been struggling with hiring and retaining its talent as of late.
Stocks No Longer Attractive
It has long depended on stock awards to entice its workers to take positions where the base pay is low.
But the stock languished in 2021, gaining just 2.4% while the S&P 500 jumped 27%, thereby lessening its appeal.
Reports began to circulate that the company was hit by crisis levels of turnover rate and that a record 50 vice presidents had left last year.
Phenomenal Quarter
As of Dec. 31, Amazon has a headcount of 1.6 million globally, including hourly paid warehouse workers and office staff with annual salaries.
Warehouse workers are paid at least $15 an hour which had increased to $18 during the pandemic as they were the backbone of the company’s logistics operations.
Investors are concerned with Amazon’s rising costs but were reassured by the company’s strong fourth quarter and its decision to increase Prime subscription costs by $20.
Trillionaire Club
In response, shares soared almost 14% and were up another 1% to $3,174.47 at 1:35 p.m. Monday in New York.
It expanded its market capitalisation by around $190 billion (roughly Rs 14,18,200 crore) by the end of trading.
Amazon is now valued at about $1.6 trillion (roughly Rs 1,41,82060 crore).
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