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Amazon’s minimum wage hike comes with a catch for some workers

10/03/2018

Summary

After raising its minimum wage to $15 an hour, Amazon cut stock options and incentive-based bonuses for some employees. Before the change, stock options guaranteed employees a future slice of Amazon’s stock at a time when individual shares are valued at more than $1,950 and warehouse employees received monthly incentive-based bonuses when their facilities hit production goals.

Key Points

  • The significant pay raise is calculated to more than compensate for the loss of stock options and incentive bonuses
  • Because the compensation is no longer incentive-based, the compensation will be more immediate and predictable
  • The phasing-out of the stock options and incentives should offset some of the costs associated with the wage hike

Discussion Questions

  1. Why do you think Amazon is now offering a minimum wage of $15 an hour?
  2. How will employee satisfaction increase or decrease due to the wage changes?

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