Amazon share price current and expected at 15 percent appreciation rates, chart by Mish

Stock-heavy compensation plan means Amazon employees will receive 15% to 50% below projected pay targets.

The Wall Street Journal reports Amazon Corporate Workers Face Pay Reduction After Shares Slip

Amazon pays its corporate employees a large chunk of their annual salaries in restricted stock units, and a prolonged slump in the company’s shares is causing pay for 2023 to be between 15% and 50% lower than the projected targets Amazon gave to employees, some of the people said. 

Amazon has historically given less base-pay compensation to employees than its big-tech peers but made up the difference with stock awards that vest over several years. Employees say the longer an Amazon employee stays with the company, the more their compensation can depend on stock awards, with stocks making up 50% or more of total income for some. 

Price Appreciation Expectation

When Amazon issues restricted stock units to employees, it is predicated on the longstanding assumption shared in compensation conversations that Amazon’s shares would appreciate at least 15% each year, the people said.

Nonsensical Expectations

I'm sorry, but 15 percent forever into the future is total nonsense.

Nothing grows at 15 percent forever. Moreover, those expectations kept growing despite a share price that reflected 15 percent appreciation all the way to 2030.

At 15 percent annual appreciation starting in 2010, the share price on January 1, 2023 would have been $41.29. Instead, and after a 50 percent plunge it was at $84.00.

Starting Points Matter

Starting points matter greatly. Starting in 2010, Amazon may have been one of perhaps a handful of companies that could deliver 15 percent appreciation for a couple of decades. 

But guess what. That would put the 2030 price at about $110. It's at $97.20 as I type. Zero percent gains or even losses by 2030 would not surprise me at all. 

Starting in 2021, at 15 percent annual gains, the share price would have been $571 and Amazon would have had a market cap close to $6 trillion. 

What a hoot. 

Amazon Monthly Support Levels 

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Amazon monthly chart courtesy of StockCharts.com, annotations by Mish

Amazon Technically Speaking 

Technically speaking, Amazon did a nice bounce at strong support at the $80 level. Next monthly support is at $65.20 and it is weak (only a pair of candles). 

A decline to the $50 level, which I expect, would be a 73 percent decline from the top, not at all unusual or unexpected for a technology bear market.

Understanding the Fed's Bubble Blowing Role

In an effort to boost inflation (did you forget the Fed did that), the Fed again slashed interest rates to zero and held them there too long.

The Fed did this three times in the past 20 years resulting in several bubbles in housing and the stock market.

Case-Shiller Home Price Index

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For discussion of the above chart, please see Home Prices Falling But Remain Very High, San Francisco Negative From Year Ago

How the Fed Messes With People's Lives From a Mortgage Rate Perspective

I discussed Fed's role in the housing market and its role in inflation earlier today.

Please see How the Fed Messes With People's Lives From a Mortgage Rate Perspective for discussion and many charts.  

More By This Author:

How The Fed Messes With People's Lives From A Mortgage Rate Perspective
Comments From Lacy Hunt On The Fed's Current Money Supply Numbers
Another Move In Market's Perception Of Fed Interest Rate Hikes Sooner For Longer