Board Incentive Structures in the Tech Sector: An Analysis of Amazon’s Compensation System
Research Article
Open Access
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Board Incentive Structures in the Tech Sector: An Analysis of Amazon’s Compensation System

Yitong Hao 1*
1 Taiyuan Foreign Language School
*Corresponding author: proque@hawkmail.hccfl.edu
Published on 30 July 2025
Volume Cover
AEMPS Vol.207
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-299-7
ISBN (Online): 978-1-80590-300-0
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Abstract

As global technology companies compete more and more, the way companies design their pay systems has become very important. A good pay system can help a company do well and keep talented people from leaving. This paper looks at the pay system of Amazon. This study examines the structural logic of Amazon's pay system through empirical case analysis, analyzes its benefits and drawbacks, and offers specific recommendations for improvement. First, the paper explains how Amazon pays its board members and key employees. This includes stock rewards (called RSUs), yearly pay, and the fact that Amazon does not give extra money for attending meetings. Then, the paper looks at how this system works in terms of motivation, fairness, and how well it fits the competitive job market. It also compares Amazon’s pay system with those used by other large tech companies, like Google and Microsoft, to see how well Amazon’s system helps it keep top talent and stay competitive. In the end, the paper gives some ideas for how Amazon could improve its system. These include linking pay more closely to performance, and creating more kinds of pay, not just stock.

Keywords:

Amazon, pay system, stock rewards, corporate management, pay improvement.

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Hao,Y. (2025). Board Incentive Structures in the Tech Sector: An Analysis of Amazon’s Compensation System. Advances in Economics, Management and Political Sciences,207,16-23.

References

[1]. Park, W., Sernova, E. and Park, C.-Y. (2025) From short-term volatility to long-term growth: Restricted stock units’ impact on earnings per share and profit growth across sectors. Int. J. Financ. Stud., 13(2), 104.

[2]. Frydman, C. and Jenter, D. (2010) CEO compensation. Annu. Rev. Financ. Econ., 2, 75–102.

[3]. Murphy, K.J. (1999) Executive compensation. In: Ashenfelter, O. and Card, D. (Eds.), Handb. Labor Econ., 3, 2485–2563.

[4]. Core, J.E. and Larcker, D.F. (2002) Performance consequences of mandatory ownership guidelines. J. Financ. Econ., 64(3), 487–513.

[5]. Bertrand, M. and Mullainathan, S. (2001) Are CEOs rewarded for luck? The ones without principals are. Q. J. Econ., 116(3), 901–932.

[6]. Gabaix, X. and Landier, A. (2008) Why has CEO pay increased so much? Q. J. Econ., 123(1), 49–100.

[7]. Edmans, A., Gabaix, X. and Jenter, D. (2017) Executive compensation: A survey of theory and evidence. Handb. Econ. Corp. Gov., 1, 383–539.

[8]. Jensen, M.C. and Murphy, K.J. (1990) Performance pay and top-management incentives. J. Polit. Econ., 98(2), 225–264.

[9]. Sundaramurthy, C. and Lewis, M. (2003) Control and collaboration: Paradoxes of governance. Acad. Manage. Rev., 28(3), 397–415.

[10]. Balsam, S. and Yin, J. (2005) Explaining firm performance: The role of employee stock options. Rev. Account. Finance, 4(1), 5–28.

References

[1]. Park, W., Sernova, E. and Park, C.-Y. (2025) From short-term volatility to long-term growth: Restricted stock units’ impact on earnings per share and profit growth across sectors. Int. J. Financ. Stud., 13(2), 104.

[2]. Frydman, C. and Jenter, D. (2010) CEO compensation. Annu. Rev. Financ. Econ., 2, 75–102.

[3]. Murphy, K.J. (1999) Executive compensation. In: Ashenfelter, O. and Card, D. (Eds.), Handb. Labor Econ., 3, 2485–2563.

[4]. Core, J.E. and Larcker, D.F. (2002) Performance consequences of mandatory ownership guidelines. J. Financ. Econ., 64(3), 487–513.

[5]. Bertrand, M. and Mullainathan, S. (2001) Are CEOs rewarded for luck? The ones without principals are. Q. J. Econ., 116(3), 901–932.

[6]. Gabaix, X. and Landier, A. (2008) Why has CEO pay increased so much? Q. J. Econ., 123(1), 49–100.

[7]. Edmans, A., Gabaix, X. and Jenter, D. (2017) Executive compensation: A survey of theory and evidence. Handb. Econ. Corp. Gov., 1, 383–539.

[8]. Jensen, M.C. and Murphy, K.J. (1990) Performance pay and top-management incentives. J. Polit. Econ., 98(2), 225–264.

[9]. Sundaramurthy, C. and Lewis, M. (2003) Control and collaboration: Paradoxes of governance. Acad. Manage. Rev., 28(3), 397–415.

[10]. Balsam, S. and Yin, J. (2005) Explaining firm performance: The role of employee stock options. Rev. Account. Finance, 4(1), 5–28.

Cite this article

Hao,Y. (2025). Board Incentive Structures in the Tech Sector: An Analysis of Amazon’s Compensation System. Advances in Economics, Management and Political Sciences,207,16-23.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICEMGD 2025 Symposium: Innovating in Management and Economic Development

ISBN: 978-1-80590-299-7(Print) / 978-1-80590-300-0(Online)
Editor: Florian Marcel Nuţă Nuţă, Ahsan Ali Ashraf
Conference website: https://2025.icemgd.org/Lahore.html
Conference date: 23 September 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.207
ISSN: 2754-1169(Print) / 2754-1177(Online)

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