March 16, 2000 1:10 PM PST

No bonus for billionaire Bezos, again

Amazon.com chief Jeff Bezos is a paper billionaire, but his annual salary would hardly be enough for a mortgage on a Silicon Valley town house.

The chief executive and chairman of Seattle-based Amazon earned $81,840 last year, the same amount as 1998. And for the third consecutive year, he didn't receive a bonus or stock options, according to documents filed with the Securities and Exchange Commission.

Bezos, Time magazine's "Person of the Year" in 1999, owns 33.6 percent of Amazon's common stock, valued about $7.4 billion based on the current price of about $62 per share.

Bezos may be trying to make a statement to shareholders with his salary, said Carol Bowie, editor of the publication Executive Compensation Reports.

"You'd be hard pressed to find an Amazon shareholder who complained about a compensation package like that," she said.

The salary information comes as Amazon struggles toward profitability. Although its book business was profitable in the fourth quarter of last year, the e-commerce giant missed earnings expectations by losing $185 million, or 55 cents, per share during the quarter.

Bezos' pay is similar to other paltry salaries earned by such tech notables as Apple Computer chief executive Steve Jobs and former Netscape Communications chief executive James Barksdale.

Apple's Jobs draws $1 in annual salary. But the company's board of directors recently rewarded his work in restoring Apple's former luster by giving him options to purchase 10 million shares of stock and a Gulfstream V jet plane.

With a moderate appreciation in Apple's shares, the package could be worth $1 billion in a few years. The jet and the various taxes that Apple agreed to pay were valued about $90 million.

Barksdale also worked for a $1 salary in 1997 from Netscape, but he received some 300,000 stock options.

Meanwhile, other tech leaders are rewarded through a combination of options and high salaries.

IBM chief executive Louis Gerstner's salary was bumped to $2 million last year, up from $1.88 million in 1998. He also received a bonus of $7.2 million, and the company contributed $285,000 to a deferred savings plan.

Compaq Computer paid chief executive Michael Capellas about $850,000 last year, plus a $1 million bonus. Stock options added millions of dollars to his compensation.

Even Bezos' fellow Amazon executives are doing better than the CEO in the salary department. Vice president and chief information officer Richard Dalzell, who Amazon wooed from Wal-Mart in 1997, earned $206,212 in base salary and received 500,000 stock options in 1999.

Joseph Galli, Amazon's president and chief operating officer, earned $102,266 in 1999 and received 3.9 million stock options. Galli, who Amazon hired from Black & Decker in June, also received a $2.9 million signing bonus, $100,000 for signing a noncompetition agreement and $31,568 in moving expenses.

As part of Amazon's proxy filing, the company asked shareholders to increase the number of authorized shares of common stock from 1.5 billion to 5 billion. The company also asked shareholders to approve an increase in the number of shares of the company's preferred stock from 150 million to 500 million.

Public companies typically increase the number of shares to fund acquisitions.

"The company currently expects that reasons for issuing additional shares of either common stock or preferred stock will include affecting acquisitions of other businesses or properties, establishing strategic relationships with other companies and securing additional financing for the operation of the company," Amazon said in its regulatory filing.

 

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