Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (96697)	3/16/2000 9:27:00 PM
From: H James Morris	Read Replies (2) \| Respond to of 164684

>Seattle, March 16 (Bloomberg) -- Amazon.com Inc. awarded stock options that could be worth a combined $2 billion in two decades to two top executives who joined the biggest Internet retailer last year. President Joe Galli, formerly with toolmaker Black & Decker Corp., and Chief Financial Officer Warren Jenson, hired from Delta Air Lines Inc., also got cash bonuses of more than $7 million each for signing with Amazon.com. Online businesses are using lucrative compensation packages to lure executives from traditional companies, executive-pay consultants said. In Amazon.com, they're joining a company that began selling books five years ago, has annual sales of $1.6 billion last year and has yet to make money. The packages ``answer the issue of what corporations are having to do to attract the talent they need,' said Judy Fischer, managing director of Executive Compensation Advisory Services in Alexandria, Virginia. The option grants are unusual not only for their size, but also the terms during which the executives can use the options to buy shares. The options can be exercised at different points over the next 20 years, while most companies grant 10-year terms. The longer executives have to exercise options, the better the chance the company's stock will appreciate. Galli, 41, got options to purchase 3.92 million shares. The grant would have a value of $1.3 billion if the stock rises 10 percent a year through 2019, according to Amazon.com's proxy filing with the Securities and Exchange Commission. The 43-year-old Jenson got options for 2 million shares, which could realize a value of $745 million in 20 years. Those options had a value of $25.8 million at the end of last year. The proxy also included a company proposal to increase the number of authorized common shares to 5 billion from 1.5 billion to finance acquisitions, corporate operations and employee incentive packages, and to fend off hostile takeovers. Shares of Seattle-based Amazon.com rose 2 3/8 to 66 1/8 in late trading. The stock, which initially sold at a split-adjusted $1.50 in May 1997, reached a record of 113 on Dec. 9. Pay Packages Galli, who was also named chief operating officer when he joined Amazon.com in June, received a $7.9 million signing bonus. Of that, he received $2.9 million last year. The rest will be paid in June of this year and next. His incentive package includes options to purchase 1.47 million shares through 2009, and 2.45 million shares from 2009 through 2019. The exercise price is $57.95 a share. The options had a value of $71.2 million at year-end, the proxy said. Galli will get an annual salary of $200,000. Jenson, who left Delta in September, received $2.15 million of his $7.4 million signing bonus last year. The rest will be paid each year through 2003. ``In recruiting, companies are also having to resort to cash,' Fischer said. ``Executives are leaving behind a lot of money on the table, so corporations are having to make up for that.' Jenson's stock option, which vests in yearly installments over 20 years, has an exercise price of $63.25 a share, the stock price on the date of the grant. The options had a value of $25.8 million at year-end, the proxy said. He also agreed to an annual base salary of $175,000. Founder and Chief Executive Jeffrey Bezos earned $81,840 in base salary last year. He owns a third of the company's stock. As in previous years, Bezos requested not to receive additional pay -- except for $957 in royalties from a 1996 television commercial he appeared in to promote the company. Mar/16/2000 15:57