Ever wonder how much the big dogs over at Amazon and eBay make in a year? Although both companies have established themselves as the #1 and #2 powerhouse for marketplace selling, they each take a noticeably different approach to paying their executives. Sure both companies weigh compensation based on stock and company performance, but you might be a little surprised what the base salary for these CEOs actually is. Warning: If you’re unemployed you might want to turn away.
In 2011, then current CEO of eBay John Donahoe made a combined salary of $16, 456,528 which included his eIP payout and assorted stock holdings. eBay’s compensation structure, which is often referred to as the eBay Incentive Plan (eIP), aligns salaries with the performance of the company drawing primarily on non-GAPP net income as a basis. Basically what this means is executives will not receive financial-performance bonuses unless the company meets a baseline level of revenue and net income. eBay explains Donahoe’s compensation by citing strong revenue growth, global expansion of PayPal, and the added workload Mr. Donahoe took on when taking over CEO duties following the departure of Lorrie Norrington.
Honorable mentions: eBay’s CFO Bob Swan made a grand total of $7.7 million including base salary, stock, incentives, and other compensation while Chief Technology Officer Mark Carges made a whopping $9.7 million in 2011. That’s almost a $7 million increase from his measly $2.9 million salary the year before.
In 2011, Amazon’s Jeff Bezos brought home $1,681,840 in compensation which included his base salary of $81,840. Similar to eBay’s pay structure, Amazon focuses its executive compensation on company stock with one exception–CEO Jeff Bezos does not take any of his compensation in the form of stock. When asked why the CEO of Amazon doesn’t receive any compensation from stocks the company responded by saying, “Due to Mr. Bezos’ substantial stock ownership (approximately 19%), he believes he is appropriately incentivized and his interests are appropriately aligned with shareholders’ interests. Mr. Bezos has never received any stock-based compensation from Amazon.com.” That’s pretty surprising for a guy whose company this year sold 306 items a second on Cyber Monday.
Honorable mentions: Amazon’s CFO and vice president Tom Szkutak took a base salary of $160,000 in 2011, while senior vice president of international consumer business Diego Piacentini took home $175,000. Both salaries remained unchanged from the previous two year.
“Consistent with our belief that total compensation should be tied to long-term shareholder value, base salaries for named executive officers are designed to provide a minimum level of cash compensation and to be significantly less than those paid by similarly situated companies,” Amazon said.
What do you think of the two salaries for both CEOs?