>>25M is about 1/4 of 1% of his amzn holdings at the current valuation.
Robert - when you calculate your net worth, do you add up only the stock you have sold?
In my view, $25 million is a lot of money for an executive to make - there are a lot of executives that have never made that much money. In a previous post, I point out that there are many executives at Amazon that have made $5-25 million to date through selling stock. Other Amazon insiders have made much more - in fact, Amazon insider sales total $700 million to date. In light of the fact that the company has yet to prove itself, I find this a bit alarming. I sometimes take a dark view of human behavior (I suppose it comes from experience and from reading too much Mark Twain) - but I can't help but feel that if an individual is rewarded for completing a task far in advance of the task being completed, and there is no obligation imposed on the individual to complete the task, well, that individual may feel less motivation to complete the task - and in some cases, much less motivation. And this is the situation in which the Amazon executive staff currently finds itself. Why did Jimmy Wright and Kavitark Shriram leave after such a short period of time - with millions? They had received the reward - so why stick around to complete the task.
$25 million is only a small fraction of Bezos's net worth. One could say, however, that Bezos has gained not $25 million, but actually $7 billion (or whatever the value of his total holdings) - $7 billion is actually his net worth. Bezos can do many things to take monetary advantage of his $7 billion holdings (I'm sure he has a rather large credit line with his personal bank - and as Kis has stated, he can trade in other securities that would allow him to realize gains on his holdings without our ever knowing about it). You could argue that Bezos is not really worth $7 billion - because he would never be able to sell all his stock to obtain the $7 billion. However, I think he probably could sell $1-2 billion before the stock might start to collapse if he chose to do so.
So in evaluating the reward that Bezos has received to date for an as yet to be completed task, I don't believe it is appropriate to look at $25 million - I believe $7 billion or $1-2 billion are more appropriate numbers. Both are extremely high rewards for an uncompleted task in my opinion. Bezos hasn't proven his business can work - and there is still a high degree of uncertainty regarding whether the Amazon business model can be profitable enough to justify the company's current stock price.
Thanks,
-Eric |
