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Business Insider reports that an internal memo at Amazon recently informed managers "that employee stock awards - called restricted stock units, or RSUs - for 2025 will be reduced due to the economic climate and company budget. The document also cited a possible change in Amazon's pay model that would give staff more cash, a change that could make up for any potential weakness in its stock price."

The story notes that "Amazon has historically offered less base cash pay compared to some of its peers. Instead, it has used stock grants - and the potential for massive share price increases - as a means to attract talent. That strategy worked very well when Amazon shares surged from 2009 through most of 2021. But last year, the stock plunged, undermining the value of RSUs as an employee retention tool.

"Amazon's recent decision to reduce the number of RSUs granted to staff marks a major reversal from 2022. That year, the company issued a record amount of stock awards, as Insider previously reported. In 2022, it disclosed $19.6 billion in stock-based compensation, up 54% from the year before and more than double the level from 2020."

The story notes that "the potential change in pay structure could address frustration among Amazon employees. Departing staff often cited low base cash pay as the primary reason for leaving, according to an internal document seen by Insider and people familiar with the matter. The current compensation approach has become a major issue in recent years, driving higher turnover and causing Amazon to identify it as one of the factors it must tackle to become 'Earth's Best Employer,' as Insider previously reported.

"An internal survey last year found that employees preferred higher base pay, according to people familiar with the matter. The employees put a higher value on a package with 75% cash and 25% equity, versus those with a lower cash component, they said."

KC's View:

This makes sense at a time when Amazon's share price has been struggling, and we've even begun to see some headlines questioning whether the company is being overvalued.  To be fair, though, there also have been a lot of stories lately suggesting that Amazon's stock is a great buy at current levels, that a price surge in inevitable.

I like the idea that the company is responding to employee concerns by giving them what they appear to want.  Though, if I worked for Amazon - and depending on what my financial solution happened to be at the time - I'd like to think that I would prefer lots of stock.  Assuming, of course, that I continued to believe in the company and current management.