Amazon giveth and Amazon taketh away.
The company announced Tuesday that it will raise its minimum wage to $15 an hour for all US employees. But tucked away in the announcement was the fact that Amazon will phase out its bonus and stock award programs for its hourly workers. The change was first reported by Bloomberg Wednesday.
The company maintains that workers will make more money under the new system. All hourly workers will get a bump in pay, even if they are already making $15 an hour.
“The significant increase in hourly cash wages more than compensates for the phase out of incentive pay and RSUs [restricted stock units],” a spokesperson said. “In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable.”
The company wouldn’t share details about its restricted stock unit program, though typically it’s considered part of an employee’s compensation and vests after a period of time. That perk could be pretty valuable for workers, especially since Amazon’s stock price more than doubled over the past year.
Instead, Amazon will offer a direct stock purchase plan, which usually allows an investor to purchase stock without a broker. Shares can sometimes be bought at a discount.
The new minimum wage, which will begin November 1, will apply to more than 250,000 Amazon employees, as well as more than 100,000 seasonal workers.
Amazon has come under fire from critics, including independent Senator Bernie Sanders of Vermont, who say that the company doesn’t pay its workers enough. They have drawn a contrast with CEO Jeff Bezos’ spectacular wealth: He is the richest person alive, worth an estimated $165 billion.
Sanders introduced a bill last month that would tax Amazon, Walmart and other big companies whose workers collect public assistance.
Named the Stop Bad Employers by Zeroing Out Subsidies, or the Stop BEZOS Act, Sanders’ bill would levy a tax on large companies equal to the value of the public benefits that their workers receive. He argues that if employers paid a living wage, taxpayers would save $150 billion a year on the government assistance programs, including food stamps, Medicaid and public housing.
After Amazon announced its pay hike, Sanders praised the company and its founder.
“I want to give credit where credit is due,” Sanders said. “I want to congratulate Mr. Bezos for doing exactly the right thing.”