Amazon shareholders to challenge on pay, tax and working conditions

Amazon shareholders will challenge the company on executive pay, tax transparency, working conditions and unionisation, as chief executive Andy Jassy faces his first annual meeting at the helm of the ecommerce and cloud computing giant.

The $1tn tech company is opposing all 15 of the shareholder proposals, the most it has faced since 2010, according to regulatory filings. In that time, no proposal has secured 50 per cent support and voting has historically followed the board’s recommendations. Founder and former chief executive Jeff Bezos himself controls 12.7 per cent of the overall vote.

Still, the strength of opposition could force the company to alter its policies and practices, as Big Tech companies are increasingly challenged by investors who want them to become more responsive to public controversies.

Wednesday’s AGM also represents a test of leadership for Jassy, who took over from Bezos last July, as he seeks to navigate the high-profile challenges facing the company.

That pressure has grown since the start of the year as Amazon’s stock price has fallen almost 40 per cent amid the broad tech sell-off, but also off the back of mounting costs for Amazon’s retail arm.

Other tech giants have been vulnerable to shareholder petitions in recent years. In March, Apple shareholders supported a “civil rights audit” and more than a third of investors rebelled against the pay of chief executive Tim Cook. In November 2021, Microsoft’s shareholders overwhelmingly supported a protest vote calling on the company to reveal more about its handling of sexual harassment claims.

Previous unsuccessful but strong shareholder votes at Amazon have moved the company into publishing an environmental impact report, which it did for the first time in 2019. More recently, a report into safety at Amazon warehouses confirmed its injury rates were higher than peers in the warehousing sector.

A proposal for a racial equality audit this year was withdrawn after Amazon commissioned former US attorney-general Loretta Lynch to conduct such a report. New York State Comptroller Thomas DiNapoli, who had filed the proposal, said he was satisfied that the Lynch review would address his concerns.

The audit was proposed last year and attracted 44.18 per cent support — the highest level of support given to any shareholder proposal that year.

This year, Amazon Labor Union leader Chris Smalls will call for Amazon to issue a report detailing its policies on “freedom of association” and collective bargaining. Smalls was the architect of the first successful union drive at a US Amazon facility.

The proposal, along with another requesting an independent audit on working conditions at Amazon facilities, has been backed by influential investor advisory groups Institutional Shareholder Services (ISS) and Glass Lewis. Norwegian pension fund Norges Bank said it would vote in favour of both proposals.

Norges Bank has given similar backing to a call for more transparent tax reporting. In addition, Glass Lewis and Morningstar Sustainalytics told investors to vote in favour of the resolution which would significantly overhaul the tech giant’s disclosures on where and how much it pays in tax worldwide.

Katie Hepworth, responsible tax lead at advisory firm Pirc, which is backing the resolution, said more than 10 per cent of shareholders supporting the vote would be “significant” and could prompt Amazon into agreeing to the proposal. “This is about investors sending a message about what they care about,” she said.

Asset managers including Nordea and Royal London have previously backed the shareholder resolution on tax. Amazon said the demanded disclosures would mean revealing competitively sensitive information.

Several groups are also challenging the board on matters of company leadership, including the $214mn pay package for Jassy. ISS said the new chief’s remuneration, and that of other senior executives, lacked “objective performance criteria, exacerbating a misalignment between pay and performance”.