The Information has an excellent story about "a growing number of investors are complaining about Amazon’s management, specifically a lack of transparency about how much money it’s been pouring into ambitious satellite internet and grocery initiatives and how those bets have been paying off, investors and analysts told The Information.
"The complaints follow five years of Amazon shares underperforming the company’s big tech peers and the broader market alike. Investors say they are hoping Amazon at the very least will start disclosing more basic information such as how many corporate employees it has in specific divisions and how big its Prime subscription business is in different parts of the world."
Essentially, the investor class is arguing that Amazon management needs to be be more forthcoming about the money it is spending on so-called "big bets," and in many cases, perhaps cut back on those investments.
The story also suggests that investors may have greater sway at Amazon these days as founder-chairman Jeff Bezos has reduced his ownership stake, currently at about 12 percent of the company.
The Information writes that "there are signs Amazon is taking investors more seriously. Since 2019, Amazon has detailed the efforts it has made to communicate with big shareholders. In the latest release of its proxy statement, which it puts out every spring ahead of its annual shareholder meeting, Amazon said its board members had met with shareholders owning more than 29% of its shares during the prior year. In its 2022 proxy statement, Amazon said it had met with investors owning over 35% of its shares and had held meetings with shareholders owning at least 30% of its shares, specifically to discuss executive compensation." And CEO Andy Jassy has begun "joining quarterly earnings calls with analysts … giving investors an opportunity to ask the Amazon CEO questions for the first time in years."
- KC's View:
This is something that Tom and I talk about in today's Innovation Conversation, but let me expand on some of that here.
Transparency is a good thing, but Amazon has to be careful about getting away from the approach that got it to this point. Bezos always made the points that a) it isn't an experiment if you know how it is going to turn out, b) Amazon was going to experiment a lot, and c) investors uncomfortable with this approach and looking for short-term profits should probably invest elsewhere.
I'm not sure Amazon is telling that story effectively these days, and it may just be that Jassy isn't as good a storyteller. He's also operating in a different climate than Bezos did, and because of the company's relative maturity and size, he has a bigger target on his back. But as Tom puts it, if you get away from a Today-Is-Day-One mindset, you find yourself on Day Two. That's just different, and could undermine the core value at the center of everything Amazon ever has done.