UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

(AMENDMENT NO.    )

 

 

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☐		Soliciting Material under §240.14a-12

AMAZON.COM, INC.

(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

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Notice of 2020 Annual Meeting of Shareholders & Proxy Statement   9:00 a.m., Pacific Time Wednesday, May 27, 2020   Virtual Meeting Site: www.virtualshareholdermeeting.com/AMZN2020

 

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

 

NOTICE OF 2020 ANNUAL MEETING

OF SHAREHOLDERS

 

		Date and Time				Virtual Meeting Site

Wednesday, May 27, 2020 9:00 a.m., Pacific Time				www.virtualshareholdermeeting.com/AMZN2020

 

Items of Business:		Our Board of Directors Recommends You Vote:
•  To elect the ten directors named in the Proxy Statement to serve until the next Annual Meeting of Shareholders or until their respective successors are elected and qualified		FOR the election of each director nominee
•  To ratify the appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2020		FOR the ratification of the appointment
•  To conduct an advisory vote to approve our executive compensation		FOR approval, on an advisory basis
•  To approve an amendment to our Restated Certificate of Incorporation to lower the stock ownership threshold from 30% to 25% for shareholders to request a special meeting		FOR approval of the amendment to our Restated Certificate of Incorporation
•  To consider and act upon the shareholder proposals described in the Proxy Statement, if properly presented at the Annual Meeting		AGAINST each of the shareholder proposals
•  To transact such other business as may properly come before the meeting or any adjournment or postponement thereof

The Board of Directors has fixed April 2, 2020 as the record date for determining shareholders entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. Only shareholders of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting.

By Order of the Board of Directors

 

 

 

David A. Zapolsky

Secretary

Seattle, Washington

April [•], 2020

Important Notice Regarding the Availability of Proxy Materials for the Amazon.com, Inc. Shareholder Meeting to be Held on May 27, 2020. The Proxy Statement and our 2019 Annual Report are available at www.proxyvote.com.

TABLE OF CONTENTS

 

ANNUAL MEETING INFORMATION				1
General				1
Outstanding Securities and Quorum				1
Internet Availability of Proxy Materials				1
Proxy Voting				2
Voting Standard				3
Revocation				3
Participating in the Annual Meeting				3
ITEM 1—Election of Directors				5
BOARD OF DIRECTORS INFORMATION				5
Biographical Information				6
Director Nominee Tenure, Skills, and Characteristics				11
Corporate Governance				11
Board Meetings and Committees				14
Compensation of Directors				16
ITEM 2—Ratification of the Appointment of Ernst  & Young LLP as Independent Auditors				18
AUDITORS				18
Fee Information				18
Pre-Approval Policies and Procedures				19
Audit Committee Report				19
ITEM  3—Advisory Vote to Approve Executive Compensation				21
ITEM  4—Approval of Amendment to Restated Certificate of Incorporation				22
SHAREHOLDER PROPOSALS				23
BENEFICIAL OWNERSHIP OF SHARES				47
EXECUTIVE COMPENSATION				48
Compensation Discussion and Analysis				48
Leadership Development and Compensation Committee Report				53
Summary Compensation Table				54
Grants of Plan-Based Awards				55
Outstanding Equity Awards and Stock Vested				56
Potential Payments Upon Termination of Employment or Change-in-Control				57
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS				58
PAY RATIO DISCLOSURE				59
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS				59
OTHER INFORMATION				60

This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current facts, including statements regarding our environmental and other sustainability plans and goals, made in this document are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons. Risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in our 2019 Annual Report on Form 10-K. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.

 

AMAZON.COM, INC.

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Wednesday, May 27, 2020

ANNUAL MEETING INFORMATION

General

The enclosed proxy is solicited by the Board of Directors of Amazon.com, Inc. (“Amazon” or the “Company”) for the Annual Meeting of Shareholders to be held at 9:00 a.m., Pacific Time, on Wednesday, May 27, 2020, and any adjournment or postponement thereof. We will conduct a virtual online Annual Meeting this year, so our shareholders can participate from any geographic location with Internet connectivity. We believe this is an important step to enhancing accessibility to our Annual Meeting for all of our shareholders and reducing the carbon footprint of our activities, and is particularly important for our shareholders, employees, and community this year in light of evolving public health and safety considerations posed by the potential spread of the coronavirus, or COVID-19. Shareholders may view a live webcast of the Annual Meeting at www.virtualshareholdermeeting.com/AMZN2020 and may submit questions during the Annual Meeting. Our principal offices are located at 410 Terry Avenue North, Seattle, Washington 98109. This Proxy Statement is first being made available to our shareholders on or about April [•], 2020.

Outstanding Securities and Quorum

Only holders of record of our common stock, par value $0.01 per share, at the close of business on April 2, 2020, the record date, will be entitled to notice of, and to vote at, the Annual Meeting. On that date, we had [•] shares of common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each other item to be voted on at the Annual Meeting. A majority of the outstanding shares of common stock entitled to vote, present or represented by proxy, constitutes a quorum for the transaction of business at the Annual Meeting. Abstentions and broker nonvotes will be included in determining the presence of a quorum for the Annual Meeting.

Internet Availability of Proxy Materials

We are furnishing proxy materials to some of our shareholders via the Internet by mailing a Notice of Internet Availability of Proxy Materials, instead of mailing or e-mailing copies of those materials. The Notice of Internet Availability of Proxy Materials directs shareholders to a website where they can access our proxy materials, including our proxy statement and our annual report, and view instructions on how to vote via the Internet, mobile device, or by telephone. If you received a Notice of Internet Availability of Proxy Materials and would prefer to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you have previously elected to

 

		2020 Proxy Statement		1

ANNUAL MEETING INFORMATION

 

receive our proxy materials via e-mail, you will continue to receive access to those materials electronically unless you elect otherwise. We encourage you to register to receive all future shareholder communications electronically, instead of in print. This means that access to the annual report, proxy statement, and other correspondence will be delivered to you via e-mail.

Proxy Voting

Shares that are properly voted via the Internet, mobile device, or by telephone or for which proxy cards are properly executed and returned will be voted at the Annual Meeting in accordance with the directions given or, in the absence of directions, will be voted in accordance with the Board’s recommendations as follows: “FOR” the election of each of the nominees to the Board named herein; “FOR” the ratification of the appointment of our independent auditors; “FOR” approval, on an advisory basis, of our executive compensation as described in this Proxy Statement; “FOR” approval of the amendment to our Restated Certificate of Incorporation; and “AGAINST” each of the shareholder proposals. It is not expected that any additional matters will be brought before the Annual Meeting, but if other matters are properly presented, the persons named as proxies in the proxy card or their substitutes will vote in their discretion on such matters.

Voting via the Internet, mobile device, or by telephone helps save money by reducing postage and proxy tabulation costs. To vote by any of these methods, read this Proxy Statement, have your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form in hand, and follow the instructions below for your preferred method of voting. Each of these voting methods is available 24 hours per day, seven days per week.

We encourage you to cast your vote by one of the following methods:

 

VOTE BY INTERNET Shares Held of Record: http://www.proxyvote.com		VOTE BY QR CODE Shares Held of Record: See Proxy Card		VOTE BY TELEPHONE Shares Held of Record: 800-690-6903
Shares Held in Street Name: http://www.proxyvote.com		Shares Held in Street Name: See Voting Instruction Form		Shares Held in Street Name: See Voting Instruction Form

The manner in which your shares may be voted depends on how your shares are held. If you own shares of record, meaning that your shares are represented by certificates or book entries in your name so that you appear as a shareholder on the records of Computershare, our stock transfer agent, you may vote by proxy, meaning you authorize individuals named in the proxy card to vote your shares. You may provide this authorization by voting via the Internet, mobile device, by telephone, or (if you have received paper copies of our proxy materials) by returning a proxy card. You also may participate in and vote during the Annual Meeting. If you own common stock of record and you do not vote by proxy or at the Annual Meeting, your shares will not be voted.

If you own shares in street name, meaning that your shares are held by a bank, brokerage firm, or other nominee, you may instruct that institution on how to vote your shares. You may provide these instructions by voting via the Internet, mobile device, by telephone, or (if you have received paper copies of proxy materials through your bank, brokerage firm, or other nominee) by returning a voting instruction form received from that institution. You also may participate in and vote during the Annual Meeting. If you own common stock in street name and do not either provide voting instructions or vote during the Annual Meeting, the institution that holds your shares may nevertheless vote your shares on your behalf with respect to the ratification of the appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2020, but cannot vote your shares on any other matters being considered at the meeting.

 

2

ANNUAL MEETING INFORMATION

 

Voting Standard

A nominee for director shall be elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. If the votes cast for any nominee do not exceed the votes cast against the nominee, the Board will consider whether to accept or reject such director’s resignation, which is tendered to the Board pursuant to the Board of Directors Guidelines on Significant Corporate Governance Issues. Abstentions and broker nonvotes will have no effect on the outcome of the election. Broker nonvotes occur when a person holding shares in street name, such as through a brokerage firm, does not provide instructions as to how to vote those shares and the broker does not then vote those shares on the shareholder’s behalf.

For the amendment to our Restated Certificate of Incorporation, the affirmative vote of a majority of the outstanding shares of common stock entitled to vote is required to approve this matter. Abstentions and broker nonvotes, if any, are not counted as affirmative votes on this matter but are counted as outstanding and entitled to vote.

For all other matters proposed for a vote at the Annual Meeting, the affirmative vote of a majority of the outstanding shares of common stock present or represented by proxy and entitled to vote on the matter is required to approve the matter. For these matters, abstentions are not counted as affirmative votes on a matter but are counted as present and entitled to vote, and broker nonvotes, if any, will have no effect on the outcome of these matters.

Revocation

If you own common stock of record, you may revoke your proxy or change your voting instructions at any time before your shares are voted at the Annual Meeting by delivering to the Secretary of Amazon.com, Inc. a written notice of revocation or a duly executed proxy (via the Internet, mobile device, or telephone or by returning a proxy card) bearing a later date or by participating in and voting during the Annual Meeting. A shareholder owning common stock in street name may revoke or change voting instructions by contacting the bank, brokerage firm, or other nominee holding the shares or by participating in and voting during the Annual Meeting.

Participating in the Annual Meeting

This year’s Annual Meeting will be accessible through the Internet. We are conducting a virtual online Annual Meeting so our shareholders can participate from any geographic location with Internet connectivity. We believe this is an important step to enhancing accessibility to our Annual Meeting for all of our shareholders and reducing the carbon footprint of our activities, and is particularly important for our shareholders, employees, and community this year in light of evolving public health and safety considerations posed by the potential spread of the coronavirus, or COVID-19. We have worked to offer the same participation opportunities as were provided at the in-person portion of our past meetings, while providing an online experience available to all shareholders regardless of their location. The accompanying proxy materials include instructions on how to participate in the meeting and how you may vote your shares.

You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on April 2, 2020, the record date, or hold a valid proxy for the meeting. To participate in the Annual Meeting, including to vote and to view the list of registered shareholders as of the record date during the meeting, you must access the meeting website at www.virtualshareholdermeeting.com/AMZN2020 and enter the 16-digit control number found on the Notice of Internet Availability of Proxy Materials or on the proxy card or voting instruction form provided to you with this Proxy Statement, or that is set forth within the body of the email sent to you with the link to this Proxy Statement.

Regardless of whether you plan to participate in the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Accordingly, we encourage you to log on to www.proxyvote.com and vote in advance of the Annual Meeting.

Shareholders are able to submit questions for the Annual Meeting’s question and answer session during the meeting through www.virtualshareholdermeeting.com/AMZN2020. We will post answers to shareholder questions received regarding our Company on our investor relations website at www.amazon.com/ir after the meeting. We also will post a webcast with video and audio of the Annual Meeting on our investor relations website, which will be available for replay following the meeting.

 

		2020 Proxy Statement		3

ANNUAL MEETING INFORMATION

 

We encourage you to access the Annual Meeting before it begins. Online check-in will be available at www.virtualshareholdermeeting.com/AMZN2020 approximately 15 minutes before the meeting starts on May 27, 2020. If you have difficulty accessing the meeting, please call 800-586-1548 (toll free) or 303-562-9288 (international). We will have technicians available to assist you.

 

4

 

 

ITEM 1—ELECTION OF DIRECTORS

 

 

In accordance with our Bylaws, the Board has fixed the number of directors constituting the Board at ten. The Board, based on the recommendation of the Nominating and Corporate Governance Committee, proposed that the following ten nominees be elected at the Annual Meeting, each of whom will hold office until the next Annual Meeting of Shareholders or until his or her successor shall have been elected and qualified:

 

Each of the nominees is currently a director of Amazon.com, Inc. and has been elected to hold office until the 2020 Annual Meeting or until his or her successor has been elected and qualified. The nominees were most recently elected at the 2019 Annual Meeting. Biographical and related information on each nominee is set forth below.

Although the Board expects that the ten nominees will be available to serve as directors, if any of them should be unwilling or unable to serve, the Board may decrease the size of the Board or may designate substitute nominees, and the proxies will be voted in favor of any such substitute nominees.

 

The Board of Directors recommends a vote “FOR” each nominee.

BOARD OF DIRECTORS INFORMATION

In evaluating the nominees for the Board of Directors, the Board and the Nominating and Corporate Governance Committee took into account the qualities they seek for directors, and the directors’ individual qualifications, skills, and background that enable the directors to effectively and productively contribute to the Board’s oversight of Amazon, as discussed below in each biography and under “Director Nominee Tenure, Skills, and Characteristics.” When evaluating re-nomination of existing directors, the Committee also considers the nominees’ past and ongoing effectiveness on the Board and, with the exception of Mr. Bezos, who is an employee, their independence.

 

		2020 Proxy Statement		5

BOARD OF DIRECTORS INFORMATION

 

Biographical Information

 

Jeffrey P. Bezos       Founder, Chairman, and     CEO of Amazon		Background   Mr. Bezos has been Chairman of the Board since founding the Company in 1994 and Chief Executive Officer since May 1996. Mr. Bezos served as President from founding until June 1999 and again from October 2000 to the present.   Qualifications and Skills   Mr. Bezos’ individual qualifications and skills as a director include his customer-focused point of view, his willingness to encourage invention, his long-term perspective, and his on-going contributions as founder and CEO.

Age:		Director since:		Board committees:		Other current public company boards:
56		July 1994		None		None

 

Rosalind G. Brewer       Group President, Americas and     COO of Starbucks Corporation		Background   Ms. Brewer has been the Group President, Americas and Chief Operating Officer of Starbucks Corporation, a roaster, marketer, and retailer of specialty coffee, since October 2017, where she has also served as a director since March 2017. From February 2012 to February 2017, she was President and Chief Executive Officer of Sam’s Club, a membership-only retail warehouse club and a division of Walmart Inc., and from 2006 to January 2012, she served in numerous leadership positions at various regional business units for Walmart.   She served as a director of Lockheed Martin Corporation from April 2011 to October 2017.   Qualifications and Skills   Ms. Brewer’s individual qualifications and skills as a director include her leadership and operations experience as a senior executive at large, multinational corporations, through which she gained experience with regulatory and compliance requirements applicable to public companies, as well as her customer experience skills.

Age:		Director since:		Board committees:		Other current public company boards:
57		February 2019		Leadership Development and Compensation		Starbucks Corporation

 

6

BOARD OF DIRECTORS INFORMATION

 

Jamie S. Gorelick       Partner with Wilmer Cutler     Pickering Hale and Dorr LLP		Background   Ms. Gorelick has been a partner with the law firm Wilmer Cutler Pickering Hale and Dorr LLP since July 2003. She has held numerous positions in the U.S. government, serving as Deputy Attorney General of the United States, General Counsel of the Department of Defense, Assistant to the Secretary of Energy, and a member of the bipartisan National Commission on Terrorist Threats Upon the United States.   Ms. Gorelick has served as a director of VeriSign, Inc. since January 2015, a director of United Technologies Corporation from February 2000 to December 2014, and a director of Schlumberger Limited from April 2002 to June 2010.   Qualifications and Skills   Ms. Gorelick’s individual qualifications and skills as a director include her experience as a lawyer, her leadership experience in senior governmental positions, including experience with regulatory and compliance matters, as well as her customer experience skills and skills relating to public policy and financial statement and accounting matters.

Age:		Director since:		Board committees:		Other current public company boards:
69		February 2012		Nominating and Corporate Governance (Chair)		VeriSign, Inc.

 

Daniel P. Huttenlocher       Dean of MIT Schwarzman College     of Computing		Background   Mr. Huttenlocher has been the Dean of MIT Schwarzman College of Computing since August 2019. He served as Dean and Vice Provost, Cornell Tech at Cornell University from 2012 to July 2019 and worked for Cornell University from 1988 to 2012 in various positions.   Mr. Huttenlocher has served as a director of Corning Incorporated since February 2015.   Qualifications and Skills   Mr. Huttenlocher’s individual qualifications and skills as a director include his experience in senior positions at MIT and Cornell University, both leading universities, Cornell Tech, a research, technology commercialization, and graduate-level educational facility, and the Xerox Palo Alto Research Center, a technology research facility, through which he gained experience with emerging technologies, as well as his customer experience skills.

Age:		Director since:		Board committees:		Other current public company boards:
61		September 2016		Leadership Development and Compensation		Corning Incorporated

 

		2020 Proxy Statement		7

BOARD OF DIRECTORS INFORMATION

 

Judith A. McGrath       Senior Advisor to     Astronauts Wanted * No     experience necessary		Background   Ms. McGrath serves as a senior advisor to Astronauts Wanted * No experience necessary, a multimedia joint venture that Ms. McGrath formed with Sony Music Entertainment, and served as President of Astronauts Wanted from June 2013 to March of 2018. The company is currently a subsidiary of Sony Pictures Television. Ms. McGrath served as Chair and Chief Executive Officer of MTV Networks Entertainment Group worldwide, a division of Viacom, Inc., including Comedy Central and Nickelodeon, from July 2004 until May 2011. She was part of the original founder and launch team for MTV.   Qualifications and Skills   Ms. McGrath’s individual qualifications and skills as a director include her leadership and multimedia operations experience as a longtime senior executive of MTV Networks Entertainment Group, through which she gained experience with content creation, advertising, and content distribution, as well as her customer experience skills. Ms. McGrath further honed her digital and entrepreneurial experience with global customers in her role at Astronauts Wanted * No experience necessary.

Age:		Director since:		Board committees:		Other current public company boards:
67		July 2014		Leadership Development and Compensation (Chair)		None

 

Indra K. Nooyi       Former Chairman and CEO     of PepsiCo, Inc.		Background   Mrs. Nooyi was the Chief Executive Officer of PepsiCo, Inc., a multinational food, snack, and beverage company, from October 2006 to October 2018, where she also served as the Chairman of its board of directors from May 2007 to February 2019. She was elected to PepsiCo’s board of directors and became its President and Chief Financial Officer in 2001, and held leadership roles in finance, corporate strategy and development, and strategic planning after joining PepsiCo in 1994.   Mrs. Nooyi has served as a director of Schlumberger Limited since April 2015.   Qualifications and Skills   Mrs. Nooyi’s individual qualifications and skills as a director include her leadership experience as a longtime senior executive at a large corporation with international operations, through which she gained experience with consumer-focused product development, international operations, and marketing issues, as well as her customer experience skills and skills relating to financial statement and accounting matters.

Age:		Director since:		Board committees:		Other current public company boards:
64		February 2019		Audit		Schlumberger Limited

 

8

BOARD OF DIRECTORS INFORMATION

 

Jonathan J. Rubinstein       Former co-CEO of Bridgewater     Associates, LP		Background   Mr. Rubinstein was co-CEO of Bridgewater Associates, LP, a global investment management firm, from May 2016 to April 2017. Previously, Mr. Rubinstein was Senior Vice President, Product Innovation, for the Personal Systems Group at the Hewlett-Packard Company (“HP”), a multinational information technology company, from July 2011 to January 2012, and served as Senior Vice President and General Manager, Palm Global Business Unit, at HP from July 2010 to July 2011. Mr. Rubinstein was Chief Executive Officer and President of Palm, Inc., a smartphone manufacturer, from June 2009 until its acquisition by HP in July 2010, and Chairman of the Board of Palm, Inc. from October 2007 through the acquisition. Prior to joining Palm, Mr. Rubinstein was a Senior Vice President at Apple Inc., also serving as the General Manager of the iPod Division.   Mr. Rubinstein served as a director of Qualcomm Incorporated from May 2013 to May 2016.   Qualifications and Skills   Mr. Rubinstein’s individual qualifications and skills as a director include his leadership and technology experience as a senior executive at large financial and technology companies, through which he gained experience with hardware devices and emerging technologies, as well as his customer experience skills and skills relating to financial statement and accounting matters.

Age:		Director since:		Board committees:		Other current public company boards:
63		December 2010		Nominating and Corporate Governance		None

 

Thomas O. Ryder       Former Chairman and CEO of     Reader’s Digest Association, Inc.		Background   Mr. Ryder was Chairman of the Reader’s Digest Association, Inc. from April 1998 to December 2006, and was Chief Executive Officer from April 1998 to December 2005. From 1984 to 1998, Mr. Ryder worked in several roles at American Express, including as President of American Express Travel Related Services International.   Mr. Ryder served as a director of ILG, Inc. from May 2016 to September 2018, a director of RPX Corporation from December 2009 to June 2017, a director of Quad/Graphics, Inc. from July 2010 to May 2017, a director of Starwood Hotels & Resorts Worldwide, Inc. from April 2001 to September 2016, and Chairman of the Board of Directors at Virgin Mobile USA, Inc. from October 2007 to November 2009.   Qualifications and Skills   Mr. Ryder’s individual qualifications and skills as a director include his leadership experience as a senior executive of Reader’s Digest, a large media and publishing company, and American Express, a large financial services company, through which he gained experience with intellectual property, media, enterprise sales, payments, and international operations, as well as his customer experience skills and skills relating to financial statement and accounting matters.

Age:		Director since:		Board committees:		Other current public company boards:
75		November 2002		Audit (Chair)		None

 

		2020 Proxy Statement		9

BOARD OF DIRECTORS INFORMATION

 

Patricia Q. Stonesifer       Former President and CEO of     Martha’s Table		Background   Ms. Stonesifer served as the President and CEO of Martha’s Table, a non-profit, from April 2013 to March 2019. She served as Chair of the Board of Regents of the Smithsonian Institution from January 2009 to January 2012 and as Vice Chair from January 2012 to January 2013. From September 2008 to January 2012, she served as senior advisor to the Bill and Melinda Gates Foundation, a private philanthropic organization, where she was Chief Executive Officer from January 2006 to September 2008 and President and Co-chair from June 1997 to January 2006. Since September 2009, she has also served as a private philanthropy advisor. From 1988 to 1997, she worked in many roles at Microsoft Corporation, including as a Senior Vice President of the Interactive Media Division, and also served as the Chairwoman of the Gates Learning Foundation from 1997 to 1999.   Qualifications and Skills   Ms. Stonesifer’s individual qualifications and skills as a director include her leadership experience as a senior executive at the Bill and Melinda Gates Foundation and at Microsoft, through which she gained experience with emerging technologies and consumer-focused product development and marketing issues, her knowledge of Amazon from having served as a director since 1997, as well as her customer experience skills and skills relating to public policy and financial statement and accounting matters.

Age:		Director since:		Board committees:		Other current public company boards:
63		February 1997		Nominating and Corporate Governance		None

 

Wendell P. Weeks       Chairman, President, and CEO     of Corning Incorporated		Background   Mr. Weeks has been the Chief Executive Officer of Corning Incorporated, a glass and materials science innovator, since April 2005; Chairman of the board of directors since April 2007; and President since December 2010. He has held leadership roles in financial management, business development, commercial leadership, and general management across many of Corning’s businesses and technologies since joining the company in 1983.   Mr. Weeks has served as a director of Merck & Co., Inc. since February 2004.   Qualifications and Skills   Mr. Weeks’ individual qualifications and skills as a director include his leadership and operations experience as a senior executive at a large corporation with international operations, experience with product development, as well as his customer experience skills and skills relating to financial statement and accounting matters.

Age:		Director since:		Board committees:		Other current public company boards:
60		February 2016		Audit		Corning Incorporated, Merck & Co., Inc.

 

10

BOARD OF DIRECTORS INFORMATION

 

Director Nominee Tenure, Skills, and Characteristics

The Nominating and Corporate Governance Committee annually reviews the tenure, performance, and contributions of existing Board members to the extent they are candidates for re-election, and considers all aspects of each candidate’s qualifications and skills in the context of the Company’s needs at that point in time and, as stated in the Board of Directors Guidelines on Significant Corporate Governance Issues, seeks out candidates with a diversity of experience and perspectives, including diversity with respect to race, gender, geography, and areas of expertise. The Nominating and Corporate Governance Committee includes, and has any search firm that it engages include, women and minority candidates in the pool from which the Committee selects director candidates. When considering candidates as potential Board members, the Board and the Nominating and Corporate Governance Committee evaluate the candidates’ ability to contribute to such diversity. The Board assesses its effectiveness in this regard as part of its annual Board and director evaluation process. Currently, over half of our independent director nominees are women and almost half of our independent director nominees have served for fewer than five years. Our Board’s composition also represents a balanced approach to director tenure, allowing the Board to benefit from the experience of longer-serving directors combined with fresh perspectives from newer directors (with two new directors on-boarding and two directors leaving in the last three years). The tenure range of our director nominees is as follows:

 

Tenure on Board		Number of Director Nominees
More than 10 years		3
6-10 years		3
1-5 years		4

Among the qualifications and skills of a candidate considered important by the Nominating and Corporate Governance Committee are: a commitment to representing the long-term interests of shareholders; customer experience skills; Internet savvy; an inquisitive and objective perspective; the willingness to take appropriate risks; leadership ability; human capital management; personal and professional ethics, integrity, and values; practical wisdom and sound judgment; international business experience; and business and professional experience in fields such as retail, operations, technology, finance/accounting, product development, intellectual property, law, multimedia entertainment, and marketing.

Corporate Governance

Board Leadership

The Board is responsible for the control and direction of the Company. The Board represents the shareholders and its primary purpose is to build long-term shareholder value. The Chair of the Board is selected by the Board and currently is the CEO, Jeff Bezos. The Board believes that this leadership structure is appropriate given Mr. Bezos’ role in founding Amazon and his significant ownership stake. The Board believes that this leadership structure improves the Board’s ability to focus on key policy and operational issues and helps the Company operate in the long-term interests of shareholders. In addition, the independent directors on the Board have appointed a lead director from the Board’s independent directors, currently Jonathan J. Rubinstein, in order to promote independent leadership of the Board. The lead director presides over the executive sessions of the independent directors, chairs Board meetings in the Chair’s absence, works with management and the independent directors to approve agendas, schedules, information, and materials for Board meetings, and is available to engage directly with major shareholders where appropriate. In addition, the lead director confers from time to time with the Chair of the Board and the independent directors and reviews, as appropriate, the annual schedule of regular Board meetings and major Board meeting agenda topics. The guidance and direction provided by the lead director reinforce the Board’s independent oversight of management and contribute to communication among members of the Board.

 

		2020 Proxy Statement		11

BOARD OF DIRECTORS INFORMATION

 

Director Independence

The Board has determined that the following directors are independent as defined by Nasdaq rules: Ms. Brewer, Ms. Gorelick, Mr. Huttenlocher, Ms. McGrath, Mrs. Nooyi, Mr. Rubinstein, Mr. Ryder, Ms. Stonesifer, and Mr. Weeks. In addition, the Board determined that Tom A. Alberg, who served as a director through May 2019, was independent during the time he served as a director. In assessing directors’ independence, the Board took into account certain transactions, relationships, and arrangements involving some of the directors and concluded that such transactions, relationships, and arrangements did not impair the independence of the director. For Ms. Brewer and Mr. Weeks, the Board considered payments in the past three years in the ordinary course of business from the Company to Starbucks Corporation and Corning Incorporated, respectively, or their affiliates. All such payments were not significant for any of these companies. For Mr. Alberg, the Board considered that Amazon and its executive officers have in the past invested in investment funds managed by entities where Mr. Alberg is a managing director or partner or in companies in which those funds invest, and that Amazon has in the past engaged in transactions with companies in which these funds have invested. For Mr. Ryder, the Board considered that his son-in-law has been employed with Amazon since 2008 in a non-officer and non-strategic position, as disclosed in “Certain Relationships and Related Person Transactions.”

Risk Oversight

As part of regular Board and committee meetings, the directors oversee executives’ management of risks relevant to the Company. While the full Board has overall responsibility for risk oversight, the Board has delegated responsibility related to certain risks to the Audit Committee, the Leadership Development and Compensation Committee, and the Nominating and Corporate Governance Committee. The Audit Committee is responsible for overseeing management of risks related to our financial statements and financial reporting process, data privacy and security, business continuity, and operational risks, the qualifications, independence, and performance of our independent auditors, the performance of our internal audit function, legal and regulatory matters, and our compliance policies and procedures. The Leadership Development and Compensation Committee is responsible for overseeing management of risks related to succession planning and compensation for our executive officers and our overall compensation program, including our equity-based compensation plans, as well as risks related to other human capital management matters, including workplace safety, culture, diversity, discrimination, and harassment. The Nominating and Corporate Governance Committee is responsible for overseeing management of risks related to our environmental, sustainability, and corporate social responsibility practices, including risks related to our operations and our supply chain. The full Board regularly reviews reports from management on various aspects of our business, including related risks and tactics and strategies for addressing them. At least annually, the Board reviews our CEO succession planning as described in our Board of Directors Guidelines on Significant Corporate Governance Issues.

Corporate Governance Documents

Please visit our investor relations website at www.amazon.com/ir, “Corporate Governance,” for additional information on our corporate governance, including:

 

•

our Restated Certificate of Incorporation and Bylaws;

 

•

the Board of Directors Guidelines on Significant Corporate Governance Issues, which includes policies on shareholder communications with the Board, director attendance at our annual meetings, director resignations to facilitate our majority vote standard, director stock ownership guidelines, succession planning, and compensation clawbacks;

 

•

the charters approved by the Board for the Audit Committee, the Leadership Development and Compensation Committee, and the Nominating and Corporate Governance Committee;

 

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the Code of Business Conduct and Ethics; and

 

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our Political Expenditures Statement.

 

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BOARD OF DIRECTORS INFORMATION

 

Sustainability

Information regarding our sustainability, environmental, social, and human capital management activities is available in our “Sustainability: Thinking Big” Fall 2019 report and on our website. In 2019, we announced The Climate Pledge with our co-founder Global Optimism. The Climate Pledge is a commitment to be net zero carbon by 2040, a decade ahead of the Paris Agreement’s goal of 2050. We also announced a commitment to power our global infrastructure with 100% renewable energy by 2030 and 80% renewable energy by 2024. As part of our commitment to achieving these goals, we announced the order of 100,000 fully-electric delivery vehicles from Rivian and a $100 million investment in natural climate solutions around the world to help remove carbon from the atmosphere in partnership with The Nature Conservancy. These ambitious and impactful goals and initiatives build on Amazon’s long-term commitment to sustainability, including through previously announced programs such as: Shipment Zero, a commitment that 50% of all Amazon shipments will be net zero carbon by 2030; renewable energy programs that include significant investments in large-scale wind farms and solar rooftop systems; and sustainable packaging and waste reduction initiatives. In addition to these initiatives, in 2019 we reported on our carbon footprint, which quantifies the total greenhouse gas emissions attributed to our direct and indirect activities, as well as other sustainability metrics.

In 2019, we also published our Amazon Global Human Rights Principles, an update to our Supply Chain Standards, and information about our global supply chain. We also have innumerable large and small sustainability initiatives underway at any point in time, as we seek to constantly invent across the Company.

We encourage you to learn more about our many sustainability initiatives and our progress towards meeting our goals, as well as the many other ways we are addressing topics such as human rights and human capital management, by reviewing our “Sustainability: Thinking Big” Fall 2019 report and website at sustainability.aboutamazon.com, our views on certain issues at www.aboutamazon.com/our-company/our-positions, and other postings on our “About Amazon” website at www.aboutamazon.com.

Shareholder Engagement

We believe that effective corporate governance includes year-round engagement with our shareholders. We meet regularly with our shareholders, including both large and small investors, to discuss business strategy, performance, compensation philosophy, corporate governance, and environmental and social topics. In a typical year, we will engage with 25 to 50 shareholders, including our largest shareholders, two to three times a year. We find it beneficial to have ongoing dialogue with our shareholders throughout the year on a full range of investor priorities (instead of engaging with shareholders only prior to our annual meeting on issues to be voted on in the proxy statement). Depending on the topics, our lead director or another independent director may engage in these conversations with a few shareholders each year as well. In 2019, as part of our corporate governance engagement, we met with corporate governance representatives at shareholders owning over approximately 25% of our stock (excluding the approximately 15% voted by our founder and Chief Executive Officer). Our direct engagement with shareholders helps us better understand our shareholders’ priorities, perspectives, and issues of concern, while giving us an opportunity to elaborate on our many initiatives and practices and to address the extent to which various aspects of these matters are (or are not) significant given the scope and nature of our operations and our existing practices. We take insights from this feedback into consideration and share them with our Board as we review and evolve our practices and disclosures.

 

		2020 Proxy Statement		13

BOARD OF DIRECTORS INFORMATION

 

Board Meetings and Committees

The Board meets regularly during the year, and holds special meetings and acts by unanimous written consent whenever circumstances require. During 2019, there were six meetings of the Board. All incumbent directors attended at least 75% of the aggregate of the meetings of the Board and committees on which they served occurring during 2019. All directors then serving attended the 2019 Annual Meeting of Shareholders.

The Board has established an Audit Committee, a Leadership Development and Compensation Committee, and a Nominating and Corporate Governance Committee, each of which is comprised entirely of directors who meet the applicable independence requirements of the Nasdaq rules. The Committees keep the Board informed of their actions and provide assistance to the Board in fulfilling its oversight responsibility to shareholders. The table below provides current membership information as well as meeting information for the last fiscal year.

 

Name		Audit Committee		Leadership Development and Compensation Committee		Nominating and Corporate Governance Committee
Jeffrey P. Bezos
Rosalind G. Brewer
Jamie S. Gorelick
Daniel P. Huttenlocher
Judith A. McGrath
Indra K. Nooyi
Jonathan J. Rubinstein
Thomas O. Ryder
Patricia Q. Stonesifer
Wendell P. Weeks
Total Meetings in 2019		6		3		5

  Committee Chair

The functions performed by these Committees, which are set forth in more detail in their charters, are summarized below.

 

Audit Committee

The Audit Committee represents and assists the Board in fulfilling its oversight responsibility relating to our financial statements and financial reporting process, the qualifications, independence, and performance of our independent auditors, the performance of our internal audit function, legal and regulatory matters, data privacy and security matters, and our compliance policies and procedures. The Board has designated each of Messrs. Ryder and Weeks and Mrs. Nooyi as an Audit Committee Financial Expert, as defined by Securities and Exchange Commission (“SEC”) rules. During the past year, the Audit Committee met with management and reviewed matters that included the Company’s risk assessment and compliance functions, data privacy and security, public policy expenditures, treasury and investment matters, accounting industry issues, the reappointment of our independent auditor, and pending litigation. The Audit Committee annually reviews the Company’s political contribution and expenditure policy and statement and a report on the Company’s political contributions and expenditures. The Audit Committee also met with the auditors to review the scope and results of the auditor’s annual audit and quarterly reviews of the Company’s financial statements.

 

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BOARD OF DIRECTORS INFORMATION

 

Leadership Development and Compensation Committee

The Leadership Development and Compensation Committee evaluates our programs and practices relating to talent and leadership development, reviews and establishes compensation of the Company’s executive officers, oversees management of risks for succession planning and our overall compensation program, including our equity-based compensation plans, and oversees the Company’s strategies and policies related to human capital management, all with a view toward maximizing long-term shareholder value. The Committee may engage compensation consultants but did not do so in 2019. The Committee oversees the Company’s Code of Business Conduct and Ethics with respect to compliance with, and reports pursuant to, the Company’s workplace non-discrimination and anti-harassment policies. Additional information on the Committee’s processes and procedures for considering and determining executive compensation is contained in the “Compensation Discussion and Analysis” section of this Proxy Statement. During the past year, the Leadership Development and Compensation Committee met with management and reviewed matters that included the design, amounts, and effectiveness of the Company’s compensation of senior executives, management succession planning, the Company’s benefit and compensation programs, the Company’s human resources programs, including review of workplace discrimination and harassment reports, and feedback from the Company’s shareholder engagement.

 

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee reviews and assesses the composition and compensation of the Board, assists in identifying potential new candidates for director, recommends candidates for election as director, and oversees the Company’s environmental, social, and corporate governance policies and initiatives. The Nominating and Corporate Governance Committee also recommends to the Board compensation for newly elected directors and reviews director compensation as necessary. During the past year, the Nominating and Corporate Governance Committee met with management and reviewed matters that included the Board’s composition, diversity, and skills in the context of identifying and evaluating new director candidates to join the Board, the Board’s recruitment and self-evaluation processes, Board compensation, Board Committee membership and qualifications, consideration of the Company’s policies and initiatives regarding the environment and sustainability, corporate social responsibility, and corporate governance, and feedback from the Company’s shareholder engagement on the foregoing matters.

Director Nominations

The Nominating and Corporate Governance Committee considers candidates for director who are recommended by its members, by other Board members, by shareholders, and by management, as well as those identified by a third-party search firm retained to assist in identifying and evaluating possible candidates. The Nominating and Corporate Governance Committee evaluates director candidates recommended by shareholders in the same way that it evaluates candidates recommended by its members, other members of the Board, or other persons, as described above under “Director Nominee Tenure, Skills, and Characteristics.” Shareholders wishing to submit recommendations for director candidates for consideration by the Nominating and Corporate Governance Committee must provide the following information in writing to the attention of the Secretary of Amazon.com, Inc. by certified or registered mail:

 

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the name, address, and biography of the candidate, and an indication of whether the candidate has expressed a willingness to serve;

 

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the name, address, and phone number of the shareholder or group of shareholders making the recommendation; and

 

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the number of shares of common stock beneficially owned by the shareholder or group of shareholders making the recommendation, the length of time held, and to the extent any shareholder is not a registered holder of such securities, proof of such ownership.

To be considered by the Nominating and Corporate Governance Committee for the 2021 Annual Meeting of Shareholders, a director candidate recommendation must be received by the Secretary of Amazon.com, Inc. by December [•], 2020.

Our Bylaws provide a proxy access right for shareholders, pursuant to which a shareholder, or group of up to 20 shareholders, may include director nominees (representing up to 20% of the number of directors in office) in our proxy

 

		2020 Proxy Statement		15

BOARD OF DIRECTORS INFORMATION

 

materials for annual meetings of our shareholders. To be eligible to utilize these proxy access provisions, the shareholder or group must have owned at least 3% of the aggregate of the issued and outstanding shares of our common stock continuously for at least the prior three years and must satisfy the additional eligibility, procedural, and disclosure requirements set forth in our Bylaws.

Compensation of Directors

Our directors do not receive cash compensation for their services as directors or as members of committees of the Board, but we pay reasonable expenses incurred for attending meetings. At the discretion of the Board, directors are eligible to receive stock-based awards under the 1997 Stock Incentive Plan (the “1997 Plan”). Similar to compensation for our employees, the compensation for our Board members is aligned with long-term value creation because it consists solely of restricted stock unit awards that have three-year vesting periods. Likewise, because our compensation program is designed to promote long-term performance and operate over a period of years, directors typically do not receive stock-based awards every year, and instead have in the past received awards only once every three years. Our Board members’ compensation will be negatively impacted if our stock price declines and will be favorably impacted if the stock performs beyond the initial stock price at grant date. By not accepting cash compensation, only restricted stock unit awards, the Board sets a tone at the top that compensation should be based on long-term value creation.

Based on the Nominating and Corporate Governance Committee’s recommendation, the Board approved restricted stock unit awards for: (1) 570 shares to Ms. Brewer and Mr. Weeks on February 4, 2019, vesting in three equal annual installments on February 15, 2020, February 15, 2021, and February 15, 2022; and (2) 549 shares to Mrs. Nooyi on February 25, 2019, vesting in three equal annual installments on May 15, 2020, May 15, 2021, and May 15, 2022. Based on the Nominating and Corporate Governance Committee’s recommendation, the Board approved restricted stock unit awards for 516 shares to Ms. Stonesifer and Messrs. Huttenlocher, Rubinstein, and Ryder on September 12, 2019, vesting in three equal annual installments on November 15, 2020, November 15, 2021, and November 15, 2022. The February 2019 awards were designed to provide approximately $300,000 in compensation annually, and the September awards were designed to provide approximately $310,000 in compensation annually, in each case based on an assumed value of the restricted stock units vesting in each year, which compensation represents the 50^th percentile for annual director compensation among a group of peer companies. When determining the amount and vesting schedule for directors’ restricted stock unit awards, the Nominating and Corporate Governance Committee and Board have not varied awards based on specific committee service.

Each grant compensates for future performance, and no portion of a restricted stock unit award vests until the year after it is granted. If a director leaves the Board prior to a vest date for any reason, he or she will forfeit all or any portion of the restricted stock unit award that has not previously vested.

 

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BOARD OF DIRECTORS INFORMATION

 

The following table sets forth for the year ended December 31, 2019 all compensation reportable for directors who served during 2019, as determined by SEC rules.

Director Compensation for 2019

 

Name		Stock  Awards(1)
Jeffrey P. Bezos(2)		$	—
Tom A. Alberg(3)			—
Rosalind G. Brewer(4)			929,992
Jamie S. Gorelick(5)			—
Daniel P. Huttenlocher(6)			951,489
Judith A. McGrath(7)			—
Indra K. Nooyi(8)			901,729
Jonathan J. Rubinstein(6)			951,489
Thomas O. Ryder(6)			951,489
Patricia Q. Stonesifer(6)			951,489
Wendell P. Weeks(4)			929,992

 

(1)

Stock awards are reported at aggregate grant date fair value as determined under applicable accounting standards. The grant date fair value for restricted stock units as reported in the table above is determined based on the number of shares granted multiplied by the average of the high and the low trading price of common stock of the Company on the grant date, without regard to the fact that the grants vest over a number of years. See Note 1, “Description of Business and Accounting Policies—Stock-Based Compensation,” in Item 8, “Financial Statements and Supplementary Data,” in our 2019 Annual Report on Form 10-K.

 

(2)	Mr. Bezos does not receive any compensation for his services as a director in addition to his compensation as Chief Executive Officer.

 

(3)	Mr. Alberg, who ceased to serve as a director in May 2019, did not hold any unvested restricted stock units as of December 31, 2019.

 

(4)	Ms. Brewer and Mr. Weeks held 570 unvested restricted stock units as of December 31, 2019.

 

(5)	Ms. Gorelick held 414 unvested restricted stock units as of December 31, 2019.

 

(6)	Ms. Stonesifer and Messrs. Huttenlocher, Rubinstein, and Ryder each held 516 unvested restricted stock units as of December 31, 2019.

 

(7)	Ms. McGrath held 304 unvested restricted stock units as of December 31, 2019.

 

(8)	Mrs. Nooyi held 549 unvested restricted stock units as of December 31, 2019.

 

		2020 Proxy Statement		17

 

 

ITEM 2—RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS

 

Under the rules and regulations of the SEC and Nasdaq, the Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent auditors. In addition, the Audit Committee considers the independence of our independent auditors and participates in the selection of the independent auditor’s lead engagement partner. The Audit Committee has appointed, and, as a matter of good corporate governance, is requesting ratification by the shareholders of the appointment of, the registered public accounting firm of Ernst & Young LLP (“E&Y”) to serve as independent auditors for the fiscal year ending December 31, 2020. E&Y has served as our independent auditor since 1996. The Audit Committee considered a number of factors in determining whether to re-engage E&Y as the Company’s independent registered public accounting firm, including the length of time the firm has served in this role, the firm’s professional qualifications and resources, the firm’s past performance, and the firm’s capabilities in handling the breadth and complexity of our business, as well as the potential impact of changing independent auditors.

The Board of Directors and the Audit Committee believe that the continued retention of E&Y as the Company’s independent auditor is in the best interests of the Company and its shareholders. If shareholders do not ratify the selection of E&Y, the Audit Committee will evaluate the shareholder vote when considering the selection of a registered public accounting firm for the audit engagement for the 2021 fiscal year. In addition, if shareholders ratify the selection of E&Y as independent auditors, the Audit Committee may nevertheless periodically request proposals from the major registered public accounting firms and as a result of such process may select E&Y or another registered public accounting firm as our independent auditors.

 

The Board of Directors recommends a vote “FOR” ratification of the appointment of E&Y as our independent auditors for the fiscal year ending December 31, 2020.

AUDITORS

Representatives of E&Y are expected to participate in the Annual Meeting and will have an opportunity to make a statement and to respond to appropriate questions from shareholders.

Fee Information

Audit Fees

Audit fees include the aggregate fees for the audit of our annual consolidated financial statements and internal controls, and the reviews of each of the quarterly consolidated financial statements included in our Forms 10-Q. These fees also include statutory and other audit work performed with respect to certain of our subsidiaries. The aggregate audit fees billed and expected to be billed by E&Y for the fiscal year ended December 31, 2019 were $22,486,000. The aggregate audit fees we were billed by E&Y for the fiscal year ended December 31, 2018 were $20,676,000.

Audit-Related Fees

Audit-related fees include accounting advisory services related to the accounting treatment of transactions or events, including acquisitions, and to the adoption of new accounting standards, as well as additional procedures related to accounting records performed to comply with regulatory reporting requirements and to provide certain attest reports. The

 

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AUDITORS

 

aggregate audit-related fees billed and expected to be billed by E&Y for services rendered during the fiscal year ended December 31, 2019 were $2,966,000. The aggregate audit-related fees we were billed by E&Y for services rendered during the fiscal year ended December 31, 2018 were $2,092,000.

Tax Fees

Tax fees were for tax compliance services and assistance with federal and provincial tax-related matters for certain international entities. The aggregate tax fees billed and expected to be billed by E&Y for services rendered during the fiscal year ended December 31, 2019 were $0. The aggregate tax fees we were billed by E&Y for services rendered during the fiscal year ended December 31, 2018 were $0.

All Other Fees

All other fees were for advisory services related to compliance with regulatory reporting requirements. The aggregate other fees billed and expected to be billed by E&Y for services rendered during the fiscal year ended December 31, 2019 were $181,000. The aggregate other fees we were billed by E&Y for services rendered during the fiscal year ended December 31, 2018 were $62,000.

Pre-Approval Policies and Procedures

All of the fees described above were approved by the Audit Committee. The Audit Committee is responsible for overseeing the audit fee negotiations associated with the retention of E&Y to perform the audit of our annual consolidated financial statements and internal controls. The Audit Committee has adopted a pre-approval policy under which the Audit Committee approves in advance all audit and non-audit services to be performed by our independent auditors. As part of its pre-approval policy, the Audit Committee considers whether the provision of any proposed non-audit services is consistent with the SEC’s rules on auditor independence. In accordance with the pre-approval policy, the Audit Committee has pre-approved certain specified audit and non-audit services to be provided by E&Y if they are initiated within 18 months after the date of the pre-approval (or within such other period from the date of pre-approval as may be provided). If there are any additional services to be provided, a request for pre-approval must be submitted by management to the Audit Committee for its consideration under the policy. Finally, in accordance with the pre-approval policy, the Audit Committee has delegated pre-approval authority to each of its members. Any member who exercises this authority must report any pre-approval decisions to the Audit Committee at its next meeting.

Audit Committee Report

The Audit Committee is composed solely of independent directors meeting the applicable requirements of the Nasdaq rules. The Audit Committee reviews the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for establishing and maintaining adequate internal control over financial reporting, for preparing the financial statements, and for the reporting process. The Audit Committee members do not serve as professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The Company’s independent auditors are engaged to audit and report on the conformity of the Company’s financial statements to accounting principles generally accepted in the United States and the effectiveness of the Company’s internal control over financial reporting.

In this context, the Audit Committee reviewed and discussed with management and the independent auditors the audited financial statements for the year ended December 31, 2019 (the “Audited Financial Statements”), management’s assessment of the effectiveness of the Company’s internal control over financial reporting, and the independent auditors’ evaluation of the Company’s system of internal control over financial reporting. The Audit Committee has discussed with Ernst & Young LLP, the Company’s independent auditors, the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission. In addition, the Audit Committee has received the written disclosures and the letter from the independent auditors required by applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence, and has discussed with the independent auditors the independent auditors’ independence.

 

		2020 Proxy Statement		19

AUDITORS

 

Based upon the reviews and discussions referred to above, the Audit Committee recommended to the Board that the Audited Financial Statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the Securities and Exchange Commission.

The Audit Committee

Indra K. Nooyi

Thomas O. Ryder

Wendell P. Weeks

 

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ITEM 3—ADVISORY VOTE TO APPROVE

EXECUTIVE COMPENSATION

 

We are asking shareholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables and narrative.

As described in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Leadership Development and Compensation Committee has structured our executive compensation program to tie total compensation to long-term performance that supports shareholder value, as reflected primarily in our stock price. We urge shareholders to read the “Compensation Discussion and Analysis,” as well as the Summary Compensation Table and related compensation tables and narrative, which provide detailed information on the compensation of our named executive officers. The Leadership Development and Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers has supported and contributed to our success.

This item is being presented pursuant to Section 14A of the Securities Exchange Act of 1934, as amended. After the 2020 Annual Meeting, our next advisory vote on executive compensation will occur at our 2021 Annual Meeting of Shareholders. Although this advisory vote is not binding, the Leadership Development and Compensation Committee will consider the voting results when evaluating our executive compensation program.

 

The Board of Directors recommends a vote “FOR” approval, on an advisory basis, of our executive compensation as described in this proxy statement.

 

 

		2020 Proxy Statement		21

 

 

ITEM 4—APPROVAL OF AMENDMENT TO

RESTATED CERTIFICATE OF INCORPORATION TO

LOWER STOCK OWNERSHIP THRESHOLD FOR

SHAREHOLDERS TO REQUEST A SPECIAL MEETING

 

We are asking shareholders to approve an amendment to our Restated Certificate of Incorporation to lower the stock ownership threshold from 30% to 25% for shareholders to request that the Company call a special meeting of shareholders (the “Proposed Certificate Amendment”). Specifically, the Proposed Certificate Amendment, which the Board has approved and declared advisable, would amend the second sentence of Article 12 as follows:

“A special meeting of the shareholders shall be held if the holders of not less than thirty twenty-five percent (3025%) of all the votes entitled to be cast on any issue proposed to be considered at such special meeting have dated, signed and delivered to the Secretary one or more written demands for such meeting, describing the purpose or purposes for which it is to be held.”

As part of its regular ongoing review of our corporate governance practices, the Board carefully considered the appropriate threshold for shareholders to be able to request a special meeting. The Board continues to believe that it is important for shareholders to have the ability to call special shareholder meetings. Too low a threshold could expose shareholders to the risk of special meetings being called by a few shareholders focused on narrow or short-term interests, rather than the long-term best interests of the Company and shareholders generally. After considering evolving governance practices as well as investor feedback and previous shareholder votes on the matter, the Board believes that a 25% threshold strikes an appropriate balance between enhancing shareholder access and minimizing the potential harms associated with allowing a small number of shareholders to call special meetings.

The Bylaws currently contain the same 30% ownership threshold for requesting a special meeting that is set forth in the Restated Certificate of Incorporation. The Board has approved a corresponding amendment to Section 2.2.2 of our Bylaws, contingent upon shareholder approval and implementation of the Proposed Certificate Amendment, to change the 30% threshold to 25%. The Board has not approved any other changes to the special meeting provisions in the Bylaws at this time. Complete copies of the current Restated Certificate of Incorporation and Bylaws are available on the Corporate Governance section of our website at www.amazon.com/ir.

The Proposed Certificate Amendment is binding. If the Proposed Certificate Amendment is approved, the Company intends to file a certificate of amendment to the Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, and the Proposed Certificate Amendment will become effective at the time of that filing. If the Proposed Certificate Amendment is not approved by the requisite vote, then neither the Proposed Certificate Amendment nor the Bylaw amendment will become effective.

 

The Board of Directors recommends a vote “FOR” approval of the amendment to our Restated Certificate of Incorporation to lower the stock ownership threshold for shareholders to request a special meeting.

 

 

22

 

SHAREHOLDER PROPOSALS

We believe that effective corporate governance includes year-round engagement with our shareholders. We meet regularly with both large and small investors to discuss business strategy, performance, compensation philosophy, corporate governance, and environmental and social topics. This direct engagement helps us better understand our shareholders’ priorities, perspectives, and issues of concern, while giving us an opportunity to elaborate on our many initiatives and practices and to address the extent to which various aspects of these matters are (or are not) significant given the scope and nature of our operations and our existing practices. We take insights from this feedback into consideration and share them with our Board as we review and evolve our practices and disclosures.

Items 5 through 14 are shareholder proposals that will be voted on at the Annual Meeting only if properly presented by or on behalf of the shareholder proponent. Some of these proposals contain assertions that we believe are incorrect, and we have not attempted to refute all of the inaccuracies.

Certain of the shareholder proposals relate to environmental, sustainability, social, or governance issues, often requesting that we prepare a report, adopt a policy, or take some other particular action. In many cases, we already support some of the initiatives or share the concerns addressed in such proposals, and we often already have taken actions that we believe address the underlying concerns of a proposal, but we may disagree with how the proposal seeks to prescribe the manner in which we approach or report on the issue.

For example, in 2019, we announced The Climate Pledge with our co-founder Global Optimism. The Climate Pledge is a commitment to be net zero carbon by 2040, a decade ahead of the Paris Agreement’s goal of 2050. We also announced a commitment to power our global infrastructure with 100% renewable energy by 2030 and 80% renewable energy by 2024. As part of our commitment to achieving these goals, we announced the order of 100,000 fully-electric delivery vehicles from Rivian and a $100 million investment in natural climate solutions around the world to help remove carbon from the atmosphere in partnership with The Nature Conservancy. These ambitious and impactful goals and initiatives build on Amazon’s long-term commitment to sustainability, including through previously announced programs such as: Shipment Zero, a commitment that 50% of all Amazon shipments will be net zero carbon by 2030; renewable energy programs that include significant investments in large-scale wind farms and solar rooftop systems; and sustainable packaging and waste reduction initiatives. In addition to these initiatives, in 2019 we reported on our carbon footprint, which quantifies the total greenhouse gas emissions attributed to our direct and indirect activities, as well as other sustainability metrics.

In 2019, we also published our Amazon Global Human Rights Principles, an update to our Supply Chain Standards, and information about our global supply chain. We also have innumerable large and small sustainability initiatives underway at any point in time, as we seek to constantly invent across the Company.

For these reasons, we generally oppose proposals requesting other specific reports, policies, or initiatives as they do not reflect the actions we are already taking to address such issues, the decisions we have made in prioritizing our initiatives, or the unique and evolving nature of our operations. Instead, we are transparent about our many sustainability initiatives and our progress towards meeting our goals, as well as the many other ways we are addressing topics such as human rights and human capital management, and we encourage you to review our “Sustainability: Thinking Big” Fall 2019 report and website at sustainability.aboutamazon.com, our views on certain issues at www.aboutamazon.com/our-company/our-positions, and other postings on our “About Amazon” website at www.aboutamazon.com.

We will promptly provide each shareholder proponent’s name, address, and, to our knowledge, share ownership upon a shareholder’s oral or written request to the Corporate Secretary of Amazon.com, Inc. at Amazon.com, Inc., 410 Terry Avenue North, Seattle, Washington 98109.

 

		2020 Proxy Statement		23

SHAREHOLDER PROPOSALS

 

ITEM 5—SHAREHOLDER PROPOSAL REQUESTING A REPORT ON EFFECTS OF FOOD WASTE

Beginning of Shareholder Proposal and Statement of Support:

Resolved: Shareholders request that Amazon.com, Inc. issue an annual report, at reasonable cost and omitting proprietary information, on the environmental and social impacts of food waste generated from the company’s operations given the significant impact that food waste has on societal risk from climate change and hunger.

Supporting Statement: Shareholders leave the method of disclosure to management’s discretion. Shareholders also defer to management on the specific approaches used to mitigate food waste and which parts of Amazon’s operations are best to target. Some options we recommend as guidelines include:

 

•

Conducting evaluations to determine the causes, quantities, and destinations of food waste;

 

•

Estimating greenhouse gas (GHG) emissions reductions that could be achieved or amounts of food redistributed to the food insecure if the company reduced the generation of food waste;

 

•

Assessing the feasibility of setting goals to reduce food waste and progress made towards meeting these targets.

Whereas: Despite one in seven U.S. households struggling to afford regular, healthy meals, 40 percent of all food produced in the U.S. is wasted, generating devastating social and environmental consequences. Decomposing food in landfills generates 23 percent of U.S. methane emissions, exacerbating climate change. Wasted food production is responsible for consuming 25 percent of U.S. freshwater, 19 percent of fertilizer, and 18 percent of cropland.

Project Drawdown cited food waste reduction as the third most impactful tactic in reducing global GHG emissions.

According to the U.N. Food and Agriculture Organization, ending food waste would preserve enough food to feed 2 billion people – more than twice the number of undernourished people in the world.

Industry peers such as Hello Fresh, Kroger, Walmart, Wegmans, Ahold USA, and Weis Markets disclose or have committed to quantitative disclosure of food waste levels, set targets for food waste reduction, and publish information on progress towards these goals. Unfortunately, Amazon has yet to report any company-wide food waste management strategy including context, metrics, and quantitative improvement goals.

Action to reduce food waste is even more imperative for online grocery retailers because they may be more susceptible to high rates of food waste given complex distribution systems and the inability to rely on solutions employed by conventional retailers. Amazon has captured 30% of U.S. online grocery spending, outpacing its peers. Amazon invested heavily in its Amazon Fresh and Amazon Direct online grocery services, and spent $13.7 billion to acquire Whole Foods, thereby increasing the company’s exposure to products with greater rates of food waste and spoilage.

The Sustainability Accounting Standards Board cites food waste management as material to food distributors’ operating performance, recommending disclosure of the aggregate amount of food waste generated and the percentage diverted from landfills.

Strengthened disclosure of food waste reduction efforts could help Amazon meet its social and environmental goals, combat climate change and hunger, and bolster its brand reputation in a rapidly changing market.

End of Shareholder Proposal and Statement of Support

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 5

The Board recognizes the importance of good corporate citizenship and is committed to sustainability and social responsibility, including the reduction of food waste and limiting the environmental and social impacts of food waste.

 

24

SHAREHOLDER PROPOSALS

 

Amazon is actively implementing a number of grocery inventory management approaches that address food waste by minimizing the amount of food going to landfills (mirroring the U.S. Environmental Protection Agency’s Food Recovery Hierarchy) and putting excess food to better use. For the past several years, our fulfillment centers have been helping our local communities by donating food and nonfood products to hundreds of food banks and non-profits. Amazon has launched initiatives with Feeding America and Good360 to donate usable goods and ensure these products are directed to communities in need.¹ In addition, Whole Foods Market maintains strong partnerships with food donation programs such as the Food Donation Connection, which reduces food waste by distributing unsold food to local food kitchens and shelters. In 2019, Amazon and Whole Foods Market donated 28 million meals through donation programs with Food Donation Connection and Feeding America.

We also have implemented food waste strategies based on the U.S. Environmental Protection Agency’s Food Recovery Hierarchy. All Whole Foods Market stores participate in a variety of food waste diversion and recycling programs, such as composting, anaerobic digestion to create renewable energy, and animal feed programs, and Whole Foods Market team members are trained on food waste efficiency, from smart ordering to food donation. In addition, Whole Foods Market is continually assessing emerging technologies and new opportunities to further increase its landfill diversion and recycling rates. Amazon Fresh, Amazon Go, Prime Now, and Prime Pantry partner with local non-profits to donate food we do not sell. Our initiatives to address food waste supplement and support the many other sustainability initiatives we have in place. Our sustainability website and report, available at https://sustainability.aboutamazon.com/, provides information on our sustainability and social responsibility efforts, including waste minimization for our operations. These waste minimization efforts include reducing waste in packaging and circular economy initiatives such as recycling and Amazon Second Chance, which provides customers information about re-use, refurbishment, trade-in, and recycling of products and packaging. Over time, we plan to share more publicly about the amount of food waste we divert and recycle, including for Whole Foods Market, which is the largest portion of our food-related business. As a result of Whole Foods Market’s innovative programs, the independent Center for Biological Diversity’s Population & Sustainability Program rated Whole Foods Market fourth out of ten national grocery chains in terms of efforts to reduce food waste, ahead of Target, Aldi, Albertson’s, Trader Joe’s, Costco, and Publix.²

In light of our track record and demonstrated commitment to reducing the impact of our business operations on the environment, including the management of food waste, the Board recommends that shareholders vote against this proposal.

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting a report on effects of food waste.

 

ITEM 6—SHAREHOLDER PROPOSAL REQUESTING A REPORT ON POTENTIAL CUSTOMER MISUSE OF CERTAIN TECHNOLOGIES

Beginning of Shareholder Proposal and Statement of Support:

Whereas, Amazon Web Services markets and sells to government a facial recognition system (Rekognition), that may pose significant financial risks due to privacy and human rights implications;

Human and civil rights organizations are concerned that facial surveillance technology may violate civil rights by unfairly and disproportionately targeting and surveilling people of color, immigrants and civil society organizations;

Nearly 70 organizations asked Amazon to stop selling Rekognition, citing its role enabling “government surveillance infrastructure”;

Hundreds of Amazon employees petitioned Amazon’s Chief Executive Officer to stop providing Rekognition to government, a practice detrimental to internal company cohesion, morale, and undermining employees’ commitment to retail customers by placing those customers at risk of warrantless, discriminatory surveillance, as Amazon faced year-long protests after reportedly pitching Rekognition to Immigration and Customs Enforcement;

 

1	See https://www.aboutamazon.com/amazon-fulfillment/community-impact/cultivating-community-through-a-culture-of-giving.

 

2	See https://www.biologicaldiversity.org/programs/population_and_sustainability/grocery_waste/.

 

		2020 Proxy Statement		25

SHAREHOLDER PROPOSALS

 

The American Civil Liberties Union found Rekognition matched 28 members of Congress, incorrectly identifying them as individuals who have been arrested for a crime, and later found Rekognition falsely matched 1 in 5 California lawmakers, while other research shows Rekognition is worse at identifying black women than white men and misgenders nonbinary people;

Led by San Francisco, multiple cities have banned government facial recognition and multiple state legislatures have proposed legislation reining in facial recognition;

There is little evidence our Board of Directors, as part of its fiduciary oversight, has rigorously assessed risks to Amazon’s financial performance associated with privacy and human rights threats to customers and other stakeholders;

Amazon announced Rekognition detects all “seven emotions”, including “Fear”. If sold to government, the technology could be used to repress dissenters and produce errors, discrimination and harm;

At the 2019 Amazon shareholders meeting, a similar proposal was introduced and received approximately 28% of shareholder support;

Resolved: Shareholders request the Board of Directors commission an independent study of Rekognition and report to shareholders regarding:

 

•

The extent to which such technology may endanger, threaten or violate privacy and/or civil rights, and unfairly or disproportionately target or surveil people of color, immigrants and activists in the United States;

 

•

The extent to which such technologies may be marketed and sold to authoritarian or repressive governments, including those identified by the United States Department of State Country Reports on Human Rights Practices;

 

•

The potential loss of good will and other financial risks associated with these human rights issues;

The report should be produced at reasonable expense, exclude proprietary or legally privileged information, and be published no later than September 1^st, 2020.

Supporting Statement

We believe the Board of Director’s fiduciary duty of care extends to thoroughly evaluating the impacts on reputation and shareholder value, of any facial recognition technology Amazon develops, produces or markets on which significant concerns are raised regarding the danger to civil and privacy rights of customers and stakeholders.

End of Shareholder Proposal and Statement of Support

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 6

Amazon recognizes the concerns that have been raised about how facial recognition could be used to discriminate and violate civil rights and has taken steps to address these concerns, which are outlined below. It is important to note that in the three-plus years AWS has been offering Amazon Rekognition, AWS has not received a single report of Amazon Rekognition being used in the harmful manner posited in the proposal. When used properly and responsibly, facial recognition technology significantly reduces the amount of time needed to identify people or objects in photos and video, making it an effective tool for business purposes as well as for law enforcement and government agencies to catch criminals, prevent crime, and find missing people.

Amazon believes that new technologies like facial recognition technology should not be banned or condemned because of their potential misuse. Instead, we believe governments should work quickly to put in place a regulatory framework for facial recognition technology to ensure it is used appropriately, and we have proposed guidelines for a national legislative framework that help protect individual civil rights and ensure that customers are transparent in their application of the technology. We also value open dialogue, and in this regard, we believe that the third-party tests cited above by the shareholder proponent do not fairly or honestly address Amazon’s Rekognition technology. While the advocacy group publishing the tests has not published its data set, methodology, or results in detail, using information made available publicly, we have demonstrated that the technology was not used properly (for example, by using an 80% confidence threshold when we recommend a 99% threshold in scenarios where highly accurate facial matches are important, such as when used in law enforcement). When we have attempted to re-create their tests using the service correctly, the misidentification rate dropped to zero despite the fact that we used a much larger dataset of faces.³

 

3	See https://aws.amazon.com/blogs/aws/thoughts-on-machine-learning-accuracy/.

 

 

26

SHAREHOLDER PROPOSALS

 

Amazon Rekognition’s technology can be used to help identify objects, people, text, scenes, and activities, as well as to detect inappropriate content. Customers provide images and video they want to have analyzed, and Amazon Rekognition analyzes the customer’s images or video and returns an output, including a confidence score indicating how accurate the service believes the output to be. Since being introduced in 2016, non-profit, advocacy, and government groups have used Amazon Rekognition to protect human rights, including tracking and stopping child exploitation and rescuing victims of human trafficking, as well as reuniting more than 100 missing children with their families. It has also been applied extensively to build educational apps for children, enhance security through multi-factor authentication, and identify suggestive or explicit website content in order to block or remove those images, among numerous other examples.

We recognize the concerns about risks related to how customers could potentially misuse the results generated by our technology, just as people may misuse laptop computers, mobile phones, video cameras, or many other technologies. Accordingly, Amazon takes many steps to review and address concerns around potential misuse related to the use of Amazon Rekognition, including the following:

 

•

As a condition to using Amazon Rekognition, a customer (including any government or law enforcement customer) must enter into a legal agreement with AWS that includes the AWS Acceptable Use Policy, which prohibits use of AWS’s services “for any illegal, harmful, fraudulent, infringing or offensive use,” including “[a]ny activities that are illegal, that violate the rights of others, or that may be harmful to others, our operations or reputation.”4 This includes the violation of any laws related to privacy, discrimination, and civil rights. AWS may suspend or terminate access to Amazon Rekognition if it determines a customer is violating these terms.

 

•

AWS provides a website and e-mail address where any person can report suspected abuse, and AWS employs trained staff that review every report that is received. Again, in the three-plus years AWS has been offering Amazon Rekognition, AWS has not received a single report of Amazon Rekognition being used in the harmful manner posited in the proposal.

 

•

AWS dedicates significant resources to testing, auditing, and improving its technology so that it is constantly learning and improving accuracy, including providing diverse perspectives on development teams, using training data sets that reflect gender, racial, ethnic, religious, and cultural diversity, and incorporating feedback from third parties.

 

•

AWS provides guidance to customers on best practices for utilizing and analyzing the results from using facial recognition technology, particularly in public safety use cases. For example, AWS recommends that customers use a 99% confidence/similarity threshold in scenarios where highly accurate facial matches are important, such as when used in law enforcement, and that human reviewers verify the system’s results before decisions are made. AWS also recommends customers be transparent about the use of face detection and recognition systems, including, to the extent possible, informing end users about the use of these systems, obtaining consent for that use, and providing a means for end users to provide helpful feedback for the system’s improvement.5

 

•

As noted above and in our published positions statement, Amazon believes governments should work quickly to put in place a regulatory framework for facial recognition technology.6 In support of this effort, we have proposed guidelines for a national legislative framework that help protect individual civil rights and ensure that customers are transparent in their application of the technology.7 AWS engages with a large number of diverse stakeholders on these issues, including civil society groups, academia, policymakers, and law enforcement officials.

 

•

We believe it is important that there be standardized testing and benchmarks for facial recognition. AWS encourages and supports the development of independent standards for facial recognition technology by entities like the National Institute of Standards and Technology (“NIST”), including efforts by NIST and other independent and recognized research organizations and standards bodies to develop tests that support cloud-based facial recognition software. We are engaging with NIST and other stakeholders to offer our direct assistance towards this effort. We also support efforts by members of the academic community to establish independent and trusted criteria, benchmarks, and evaluation protocols around facial recognition services.

Our Board also actively oversees potential risks related to our operations, including through periodic briefings to our Board’s committees. Under its charter, the Nominating and Corporate Governance Committee, which is comprised of directors with experience in emerging technologies and public policy, is given responsibility for overseeing and monitoring the Company’s

 

4	Available at https://aws.amazon.com/aup.

 

5	Available at https://docs.aws.amazon.com/rekognition/latest/dg/rekognition-dg.pdf.

 

6	Available at https://www.aboutamazon.com/our-company/our-positions.

 

7	Available at https://aws.amazon.com/blogs/machine-learning/some-thoughts-on-facial-recognition-legislation/.

 

		2020 Proxy Statement		27

SHAREHOLDER PROPOSALS

 

policies and initiatives relating to corporate social responsibility, including human rights and ethical business practices, and related risks most relevant to the Company’s operations and engagement with customers, suppliers, and communities.

In light of our commitment to customer trust, privacy, and security; the material benefits to both society and organizations of Amazon Rekognition’s image and video analysis capabilities; and our ongoing efforts to address potential misuse of Amazon Rekognition, the Board recommends that shareholders vote against this proposal.

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting a report on potential customer misuse of certain technologies.

 

ITEM 7—SHAREHOLDER PROPOSAL REQUESTING A REPORT ON EFFORTS TO RESTRICT CERTAIN PRODUCTS

Beginning of Shareholder Proposal and Statement of Support:

On average, 250,000 hate crimes were perpetrated in America each year between 2004 and 2015 according to the Bureau of Justice Statistics, which defines hate crimes as “crimes that the victim perceived to be motivated by bias due to the victim’s race, ethnicity, disability, sexual orientation, or religion.” (https://bit.ly/2vO6T0c) Hate crimes appear to be on the rise (https://wapo.st/2zNrNM4), and some have suggested that online hate speech, which Merriam-Webster defines as speech expressing hatred of a particular group of people, can weaken inhibitions against harmful acts. (https://ti.me/2qtvdzh)

Amazon.com, Inc.’s (“Amazon’s”) Offensive Products policies state that “Amazon does not allow products that promote, incite or glorify hatred, violence, racial, sexual or religious intolerance or promote organizations with such views.” (https://amzn.to/2WZTa0q, accessed November 9, 2019)

Unfortunately, this policy appears to be applied inconsistently, which may indicate a lack of clear internal policies and effective controls. A 2018 report found racist, Islamophobic, homophobic and anti-Semitic items on Amazon’s platforms. (https://bit.ly/2NxgaRk) While Amazon removed some products after the report’s publication, as of November 2019, searches on Amazon.com showed that controversial products continue to be available. A search for “Kek,” a satirical religion associated with the white nationalist movement, returned results for multiple items. In December 2019, Huffpost reported that Holocaust-themed items, including ornaments and mouse pads, were available on Amazon, some with a seller description reading “Massacre Auschwitcz [sic] Birkenau Jewish Death.” (https://bit.ly/2PuF1VX)

Amazon’s Offensive Products policies do not apply to books, music, video and DVD. According to a recent report, with respect to these products, Amazon’s algorithm for product search proactively directs customers who search for white supremacist or other extremist content to additional extremist content. (https://bit.ly/332jgBy)

Facilitating the sale of offensive products could expose Amazon to reputational damage and impair relationships with key stakeholders. This is particularly true as Amazon continues to pursue growth in diverse and culturally complex international markets.

Other companies, including Ryanair and Waffle House, have faced boycotts for failing to address racism encountered by customers. Both Germany and the European Union have enacted laws restricting hate speech. For instance, a German law requires the removal of hate speech within 24 hours and levies fines against companies that do not comply.

Amazon’s employees may feel uncomfortable aiding in the dissemination of hateful materials and employees belonging to targeted groups may feel unsupported by Amazon. According to research published in the Harvard Business Review, disengaged employees have 37% higher absenteeism, 49% more accidents, and 18% lower productivity. (https://bit.ly/37wmmRV)

 

28

SHAREHOLDER PROPOSALS

 

Resolved:

Investors request that Amazon report on its efforts to address hate speech and the sale or promotion of offensive products throughout its businesses. The report should be produced at reasonable cost, exclude proprietary information and discuss Amazon’s process for developing policies to address hate speech and offensive products, including the experts and stakeholders with whom Amazon consulted, and the enforcement mechanisms it has put in place, or intends to put in place, to ensure hate speech and offensive products are effectively addressed.

End of Shareholder Proposal and Statement of Support

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 7

We take seriously our commitment to diversity and respect for people from all backgrounds, including gender, race, ethnicity, religion, sexual orientation, disability, and other dimensions of diversity, which are enduring values for us as reflected in a number of Company policies.⁸ We recently reaffirmed this commitment in our Global Human Rights Principles and the statement of our positions.⁹ This commitment extends not only to our workforce,¹⁰ but to the customer experience as well. Our policies prohibit the sale of products that promote, incite, or glorify hatred, violence, racial, sexual, or religious intolerance or promote organizations with such views. It is also our policy to remove listings that graphically portray violence or victims of violence. We maintain these policies to ensure a welcoming environment for our global customers and selling partners to do business while offering the widest selection of items on earth. We strive to promote trust and respect, as well as adherence to the law. If we find that a seller has supplied a product in violation of our offensive products policies, we take corrective actions, as appropriate, including but not limited to immediately suspending or terminating seller privileges, destroying inventory in our fulfillment centers, and permanent withholding of payments (as applicable).

An example of these policies is our “Offensive and Controversial Materials” policy, which is available at https://sellercentral.amazon.com/gp/help/external/200164670. As stated in that policy, “[w]e exercise judgment in allowing or prohibiting listings and we keep our global community of customers and cultural differences and sensitivities in mind when reviewing and making a decision on products” and reserve the right to determine the appropriateness of listings on our website.

We have, and will continue to develop and implement, processes to enforce compliance with our offensive products policies. Our Offensive Products team covers global operations and monitors information about potentially offensive products from various sources including customer contacts, social media posts, and the press. This process is global and involves obtaining multiple internal perspectives from both senior leadership and global points of contact. To support our efforts to enforce offensive products policies, we have developed (and continue to iterate on and monitor the effectiveness of) automated systems, which may also trigger a manual review for ambiguous cases, to remove products that violate our policies. Once we become aware of products that violate our policies, we remove them quickly and then scan our vast catalog every five minutes to identify any products that sellers might attempt to list in violation of our policies. Under the processes outlined above, we have blocked or removed hundreds of thousands of product listings from our stores during the past 12 months, including products that promote, incite, or glorify hatred, violence, racial, sexual, or religious intolerance or promote organizations with such views.

While we use sophisticated tools to implement our policies, we recognize that we are not able to stop all bad actors. As a result, we provide a number of ways for regulatory agencies, industry organizations, customers, and our customer service teams to report products that may be in violation of our policies. When we receive these reports, we investigate the complaints, remove products that violate our policies, and take appropriate remedial action against sellers.

 

8

See, e.g., Amazon.com Code of Business Conduct and Ethics, https://ir.aboutamazon.com/corporate-governance/documents-charters/code-business-conduct-and-ethics (“Amazon.com provides equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind. For more information, see the Amazon.com policies on Equal Employment Opportunity and Workplace Harassment in the Amazon.com Owner’s Manual.”).

 

9	See https://sustainability.aboutamazon.com/governance/amazon-global-human-rights-principles; https://www.aboutamazon.com/our-company/our-positions.

 

10

Independent data continues to show that Amazon is a sought after and great place to work. LinkedIn’s 2019 Top Companies List recognized Amazon as one of the most desirable places to work in nine different counties: the U.S., U.K., Australia, India, Japan, China, Canada, Germany, and Mexico (see https://blog.aboutamazon.com/working-at-amazon/amazon-recognized-as-a-linkedin-top-company-in-nine-countries).

 

		2020 Proxy Statement		29

SHAREHOLDER PROPOSALS

 

For the foregoing reasons, the Board recommends that shareholders vote against this proposal.

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting a report on efforts to restrict certain products.

 

ITEM 8—SHAREHOLDER PROPOSAL REQUESTING A MANDATORY INDEPENDENT BOARD CHAIR POLICY

Beginning of Shareholder Proposal and Statement of Support:

RESOLVED: Shareholders of Amazon.com Inc. (“Amazon” or the “Company”) urge the Board of Directors (the “Board”) to adopt a policy to require that the Chair of the Board shall be an independent director who has not previously served as an executive officer of the Company.

This policy should be implemented so as not to violate any contractual obligations, with amendments to the Company’s governing documents as needed. The policy should also specify the process for selecting a new independent Chair if the current Chair ceases to be independent between annual meetings of shareholders. Compliance with the policy may be excused if no independent director is available and willing to be Chair.

SUPPORTING STATEMENT

Amazon’s Chief Executive Officer (CEO) Jeff Bezos also serves as Board Chair. We believe the combination of these two roles in a single person weakens a corporation’s governance, which can harm shareholder value. In our view, the Board’s oversight of management can be diminished when the Board Chair is not an independent director.

According to Institutional Shareholder Services, “the past decade has witnessed a significant rise in the number of companies with independent Chairs and a corresponding decline in the prevalence of combined CEO-Chairs” and that “the percentage of S&P 500 companies with an independent Chair has doubled, from 15 percent of firms in 2008 to 31 percent of companies in 2018.”ⁱ

According to Glass Lewis, “shareholders are better served when the board is led by an independent chairman who we believe is better able to oversee the executives of the Company and set a pro-shareholder agenda without the management conflicts that exists when a CEO or other executive also serves as chairman.”ⁱⁱ

An independent Board Chair will be particularly useful at Amazon to provide more robust oversight of risk, including on environmental, social, and governance issues. We believe that an independent Board Chair will strengthen the ability of the Board to provide objective feedback to the CEO and enhance management accountability.

Amazon has faced increasing criticism over its relationships with key constituencies, such as its workersⁱⁱⁱ and the communities in which it operates.^iv Amazon’s surveillance technology has provoked concern from civil rights organizations,^v while its management team has attracted public scrutiny for its lack of female representation.^vi

These various controversies and operating challenges may have resulted from Amazon’s rapid growth, but they also threaten to damage our Company’s corporate reputation and financial performance. In our view, an independent Board Chair would more likely result in improved policies and practices to mitigate these business risks.

For these reasons, we urge you to vote FOR this resolution.

 

i	Independent Board Leadership Matters: Evidence from Governance Practices, ISS, November 9, 2018, available at https://www.issgovernance.com/library/independent-board-leadership-matters/

 

ii	https://www.glasslewis.com/wp-content/uploads/2016/03/2016-In-Depth-Report-INDEPENDENT-BOARD-CHAIRMAN.pdf

 

iii	https://gizmodo.com/amazons-aggressive-anti-union-tactics-revealed-in-leake-1829305201; https://www.vice.com/en_uk/article/7xm4dy/ambulances-were-called-to-amazon-warehouses-600-times-in-three-years

 

iv	https://www.nytimes.com/2019/02/14/opinion/amazon-hq2-new-york.html; hftps://www.theatlantic.com/ideas/archive/2018/11/amazons-hq2-spectacle-should-be-illegal/575539/

 

v	https://www.forbes.com/sites/thomasbrewster/2018/05/22/amazon-now-sells-facial-recognition-to-american-police/#4eb5e9c54b58;

https://www.nydailynews.com/news/national/ny-news-amazon-tech-companies-transforming-immigration-enforcement-20181023-story.html

 

 

30

SHAREHOLDER PROPOSALS

 

vi	https://www.inc.com/huffington-post/big-problem-with-amazon-pay-gap-ratio-of-male-to-female-employees.html; https://www.vox.com/2017/10/21/16512448/amazon-gender-diversity-leadership-executives-jeff-bezos

End of Shareholder Proposal and Statement of Support

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 8

The Board is committed to strong, independent leadership of the Board. The independent directors on the Board have appointed a lead director from the Board’s independent directors, currently Jonathan J. Rubinstein, to promote independent leadership of the Board and address the purported governance concerns listed in the shareholder proposal. The lead director presides over the executive sessions of the independent directors, chairs Board meetings in the Chair’s absence, works with management and the independent directors to approve agendas, schedules, information, and materials for Board meetings, and is available to engage directly with major shareholders where appropriate. In addition, the lead director confers from time to time with the Chair of the Board and the independent directors and reviews, as appropriate, the annual schedule of regular Board meetings and major Board meeting agenda topics. The guidance and direction provided by the lead director reinforce the Board’s independent oversight of management and contribute to communication among members of the Board. The Board believes that this leadership structure improves the Board’s ability to focus on key policy and operational issues and helps us operate in the long-term interests of shareholders, while maintaining a strong, independent perspective.

While the proposal argues that an independent Chair would provide more robust oversight of risk, including on environmental, social, and governance issues, we believe the Company already handles these issues appropriately. The Board has delegated oversight of environmental, social, and governance issues, and related risks, to its committees. Specifically, the Nominating and Corporate Governance Committee oversees and monitors the Company’s policies and initiatives relating to corporate social responsibility, including human rights and ethical business practices, and related risks most relevant to the Company’s operations and engagement with customers, suppliers, and communities, other than with respect to human capital management matters, which are overseen by the Leadership Development and Compensation Committee, and compliance and controls matters, which are overseen by the Audit Committee.

In addition, the Board believes flexibility in board leadership structure is more suitable for us than a rigid and prescriptive approach. Instead, this proposal, if implemented, would require the Board to immediately remove Mr. Bezos from his position as Chair, rather than allowing the Board to, for example, assess the issue from time to time in the future. We do not believe that such an immediate transition would be in the best interests of Amazon or our shareholders. Our directors have a fiduciary duty to routinely evaluate and determine the most appropriate leadership structure for Amazon and its shareholders in light of our specific characteristics or circumstances at any given time. Accordingly, our governing documents provide the Board with the flexibility to determine the optimal leadership structure for Amazon, including, when appropriate, separating the positions of Chair of the Board and CEO. The Board believes that Amazon and its shareholders benefit from this flexibility, and that the directors are best positioned to lead this evaluation given their knowledge of our leadership team, strategic goals, opportunities, and challenges.

The Board has determined that at the present time shareholders and the Board are best served by having Mr. Bezos serve as the Chair of the Board. This is due in part to Mr. Bezos’ significant ownership stake in Amazon since its founding in 1994, which provides a long-term focus that benefits the Board’s decision-making and aligns his interests with those of other long-term shareholders. In this regard, our stock has significantly outperformed the S&P 500 over the last 3, 5, and 10-year periods. For example, over the last five years, between January 2015 and December 2019, our stock has increased approximately 495% while the S&P 500 has risen approximately 57%. In addition, in November 2019 the Drucker Institute recognized the effectiveness of our management team by naming Amazon America’s best-managed company in its Management Top 250 ranking, which assesses corporate performance on the following principles: customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength.¹¹ We are at or near the top of other customer experience and reputation surveys, including ranking in the top ten of the Harris Poll Reputation

 

11	See https://www.wsj.com/articles/the-best-managed-companies-of-2019and-how-they-got-that-way-11574437229; https://www.drucker.institute/2019-drucker-institute-company-ranking/.

 

 

		2020 Proxy Statement		31

SHAREHOLDER PROPOSALS

 

Quotient eleven years running, top ten of the American Customer Satisfaction Index ten years running, top five of the Fortune World’s Most Admired Companies nine years running, and one of the LinkedIn Top Companies in nine countries in 2019.¹²

Further, in the last few years, the Company has taken a leadership position on many environmental and social issues, including raising our minimum wage in the U.S. to $15 an hour, announcing and co-founding The Climate Pledge, building a first-of-its-kind family shelter (the largest in Washington State) within an Amazon office building in the center of our headquarters opening in 2020,¹³ making a $700 million commitment to upskill 100,000 employees in the U.S. in response to the changing American workforce,¹⁴ and funding computer science courses for more than 2,000 high schools and 100,000 students through the Amazon Future Engineers program.¹⁵ Amazon has been transparent about its most carefully considered and deeply held positions – including LGBTQ+ rights, immigration reform, federal minimum wage, and more – and published them in 2019 to provide customers, investors, policymakers, employees, and others our views on important issues.¹⁶

We believe that it is important for the Board to continue to determine on a case-by-case basis the most effective leadership structure for us, rather than take a rigid approach to board leadership, as called for by the shareholder proposal. In addition, in reviewing this proposal, the Board took into consideration relevant benchmarking data and concluded that the proposal’s approach is not common practice. For example, as noted in the proposal’s supporting statement, as of 2018, only 31% of S&P 500 companies had an independent chair.¹⁷ In addition, our existing corporate governance practices reinforce the Board’s alignment with, and accountability to, shareholders. The Board’s committee charters delineate the significant authority and responsibilities of the Board committees, and the Board as well as its committees can retain outside advisors to assist in the performance of their duties. Other current governance practices include annual election of directors, majority voting for each director, proxy access, an annual director evaluation process, shareholders’ right to call special meetings at which they can nominate director candidates or propose other business, shareholders’ ability to submit names of director candidates directly to the Board for consideration, and shareholders’ ability to communicate directly with the Board in the manner described in our Board of Directors Guidelines on Significant Corporate Governance Issues.

For the foregoing reasons, the Board recommends that shareholders vote against this proposal.

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting a mandatory independent board chair policy.

 

ITEM 9—SHAREHOLDER PROPOSAL REQUESTING AN ALTERNATIVE REPORT ON GENDER/RACIAL PAY

Beginning of Shareholder Proposal and Statement of Support:

Gender/Racial Pay Equity

Whereas: The World Economic Forum estimates the gender pay gap costs the economy 1.2 trillion dollars annually. The median income for women working full time in the United States is 80 percent that of men. This disparity can equal half a million dollars over a career. Intersecting race, the gap for African American and Latina women is 60 percent and 55 percent. At the current rate, women overall will not reach pay equity until 2059, African American women until 2130, and Latina women until 2224.

 

12	See https://www.aboutamazon.com/our-company/select-awards-and-recognition.

 

13	See https://blog.aboutamazon.com/community/building-a-home-with-heart.

 

14	See https://www.aboutamazon.com/working-at-amazon/upskilling-2025.

 

15	See https://press.aboutamazon.com/news-releases/news-release-details/amazons-future-engineer-program-now-funding-computer-science.

 

16	See https://www.aboutamazon.com/our-company/our-positions.

 

17	See Independent Board Leadership Matters: Evidence from Governance Practices, ISS, November 9, 2018, available at https://www.issgovernance.com/library/independent-board-leadership-matters/.

 

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Research suggests diverse leadership leads to superior stock performance and return on equity. McKinsey states, “the business case for the advancement and promotion of women is compelling.” Best practices include “tracking and eliminating gender pay gaps.”

Women account for 41.7 percent of our company’s workforce, but only 26.8 percent of leadership. Actively managing pay equity “is associated with higher current female representation at the professional through executive levels and a faster trajectory to improved representation.”

Assessing if a company has pay gaps requires analyzing both equal pay and equal opportunity by using adjusted and unadjusted (median) pay data. The objective of this proposal – median pay gap disclosure – addresses the structural bias affecting the jobs women and minorities hold, when white men hold most higher paying jobs. It is the key metric used by the Organization for Economic Cooperation and Development, World Economic Forum, and United States Department of Labor.

Companies have begun reporting statistically adjusted equal pay numbers, assessing the pay of men and women, minorities and non-minorities, performing similar jobs, but ignore unadjusted median pay gaps. Amazon reports women earn, excluding equity, 99.5 percent the compensation received by men and minorities earn 98.5 percent the compensation received by non-minorities on an equal pay basis. Yet, that adjusted number is only half the story, failing to consider how discrimination affects opportunity.

The United Kingdom mandates disclosure of median gender pay gaps. Amazon reported no median base pay gap and a 3.4 percent bonus gap in the United Kingdom, but has not published its global median pay gap.

Public policy risk is of concern. The Paycheck Fairness Act pends before the United States Congress. California, Massachusetts, New York, and Maryland have strengthened pay legislation. The Congressional Joint Economic Committee reports 40 percent of the wage gap may be attributed to discrimination.

Resolved: Shareholders request Amazon report on the company’s global median gender/racial pay gap, including associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent. The report should be prepared at reasonable cost, omitting proprietary information, litigation strategy and legal compliance information.

The gender pay gap is the difference between male and female median earnings as a percentage of male earnings (Organization for Economic Cooperation and Development).

Supporting Statement: A report adequate for investors to assess company strategy and performance would include the percentage global median pay gap between male and female employees across race and ethnicity, including base, bonus and equity compensation.

End of Shareholder Proposal and Statement of Support

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 9

We believe that people should receive equal pay for equal work, regardless of gender or race, and we are committed to compensating our employees fairly and equitably. Since at least 2016, Amazon has reported on key workforce demographics, including providing information on its gender pay gap on an annual basis. Our reported gender and minority pay statistics demonstrate that Amazon pays its employees comparably when analyzing the work of people performing the same jobs. When evaluating 2019 compensation in the U.S., our reported data demonstrates that women earned 99.3 cents for every dollar that men earned performing the same jobs, and minorities earned 99.1 cents for every dollar that white employees earned performing the same jobs.¹⁸

We are strongly committed to increasing gender and racial diversity, including among our leadership ranks as disclosed on our diversity website. We believe “[d]iversity and inclusion are good for business—and more fundamentally—simply right,”¹⁹

 

18	See https://www.aboutamazon.com/working-at-amazon/diversity-and-inclusion/our-workforce-data.

 

19	See https://www.aboutamazon.com/our-company/our-positions.

 

 

		2020 Proxy Statement		33

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and, as our CEO has stated, “[t]hese are enduring values for us—and nothing will change that.” We are continuing to invest in our efforts to bring more women and minorities into leadership positions at Amazon—we have teams in every business and in executive recruiting dedicated to hiring diverse talent, we participate in events and partnerships with groups like AnitaB.org, GEM Consortium Fellows, AfroTech, Lesbians Who Tech, Girls in Tech, and the American Indian Science and Engineering Society, and we invest in several programs to assist diverse leaders to advance into more senior roles.

We also believe it is critical that we increase opportunity for underrepresented groups to enter the technology workforce. To find the best talent for technical and non-technical roles, we actively partner with academic institutions that reach underrepresented communities. Some examples of our efforts to recruit women globally and underrepresented racial/ethnic minority talent in the U.S. include recruiting from diverse colleges and universities (including Historically Black Colleges and Universities (“HBCUs”), Hispanic Serving Institutions, women’s colleges, and tribal colleges), hosting hiring fairs within underrepresented communities around the world, and committing to the HBCU Partnership Challenge to support greater engagement between private companies and HBCUs. Amazon’s Student Programs also offer internships across Amazon’s business units and look for interns through campus organizations like the National Society of Black Engineers, the Society of Hispanic Professional Engineers, Society of Women Engineers, American Indian Science and Engineering Society, and others.²⁰ As another example, Amazon Amplify is a program designed to increase the number of women in technology and innovation jobs in our U.K. business.

We also know that the American workforce is changing—there’s a greater need for technical skills in the workplace than ever before, and a huge opportunity for people with the right skills to move into better paying jobs. Amazon already leads the way in pay with a $15 minimum wage, and offers competitive benefits to our employees, like healthcare from day one and up to 20 weeks of parental leave. In 2019, Amazon announced it will invest $700 million in upskilling training programs designed to provide our employees access to the education and training they need to grow their careers. This new initiative will provide 100,000 Amazon employees with access to training programs in high-demand areas like medicine, cloud computing, and machine learning.

In 2017, Amazon pioneered a progressive parental leave policy in the U.S., which provides new birth or adoptive parents, regardless of gender, who have worked for the Company for at least a year with six weeks of paid parental leave. Birth parents may take up to 14 weeks of fully paid disability leave (four weeks prior to birth and eight weeks following birth) in addition to their six weeks of parental leave. Parental leave benefits apply to all full-time hourly and salaried employees, including our customer service and fulfillment center workers. For Amazonians whose spouses’ jobs don’t provide paid leave, Amazon offers Leave Share – an innovative program that enables employees to share any amount of their unused parental leave with their partner. Amazon also offers a way for new parents to ease back to work, through Ramp Back, which is eight weeks of optional, flexible, reduced work hours.

In addition to our hiring efforts, we are investing in building the next generation of technical leaders by providing broader access to STEM education. We have committed $50 million to support computer science and STEM programs for underserved and underrepresented communities. Our Amazon Future Engineer program is a comprehensive childhood-to-career initiative to inspire, educate, and train children and young adults from underserved and underrepresented communities to pursue careers in computer science. We aim to inspire more than 10 million kids each year to explore computer science through coding camps and online lessons, fund introductory and Advanced Placement courses in computer science for over 100,000 young people in 2,000 low-income high schools across the U.S., award 100 students from underserved communities pursuing degrees in computer science four-year $10,000 annual scholarships and offer internships at Amazon to provide students work experience. We also work with organizations like Code.org and Ada Developers Academy to promote diversity in the STEM pipeline. Other organizations with which we partner to inspire young girls in tech include Girls’ Brigade Singapore and Technovation Spain.

As noted above, for 2019 compensation in the U.S., we report that women earned 99.3 cents for every dollar that men earned performing the same jobs, and minorities earned 99.1 cents for every dollar that white employees earned performing the same jobs. Reporting an unadjusted global median pay gap statistic annually would not advance our deep commitment to ensuring equal pay for equal work. An unadjusted global median pay statistic does not account for differences in pay practices across countries such as cost of living, job function, level, labor force participation rates, country currency, geography, and other factors that impact differences in compensation on a global basis. Furthermore, the

 

20	See https://www.aboutamazon.com/working-at-amazon/diversity-and-inclusion/hiring-the-best-talent.

 

34

SHAREHOLDER PROPOSALS

 

unadjusted global median pay statistic does not provide the information our managers and leaders need to make hiring, promotion, and retention decisions in a way that drives representation of women and minorities in management and leadership roles. We believe that the global pay gap information that we review and disclose publicly each year, which incorporates these differences, provides a more accurate picture of our global pay policies and practices.

As reflected by our published pay information, we are committed to fairly and equitably compensating our employees. Our compensation policies and practices are designed to ensure that employees are compensated in accordance with their jobs and level, without regard to gender, race, or other protected categories. We ensure that our policies and practices are consistently implemented in accordance with the law by annually reviewing employee compensation.

Along with providing equitable compensation, we are deeply committed to creating an environment where all employees can be successful and thrive. Here too, the workforce demographics demonstrate that Amazon continues to make progress year over year. With more than 750,000 employees worldwide, we have increased the percentage of women and U.S. underrepresented racial/ethnic minorities across our tech and non-tech corporate roles over the past three years.

Our commitment to diversity and inclusion is further fostered by our ten employee-led Affinity Groups, reaching more than 40,000 employees in over 190 chapters globally. These include Amazon People with Disabilities, Amazon Women in Engineering, Asians@Amazon, the Black Employee Network, Body Positive Peers, Families@Amazon, glamazon, Indigenous@Amazon, Latinos@Amazon, Warriors@Amazon, Women@Amazon, and the Women in Finance Initiative. We also have innovative benefit offerings, and host annual and ongoing learning experiences, including our annual AmazeCon and Conversations on Race and Ethnicity (CORE) conferences. At AmazeCon, our largest global internal conference, Amazonians examine the intersection of gender with race, sexual orientation, disability status, veteran status, and other dimensions of diversity. This conference has included diversity-oriented talks from academics and external leaders on technology, entrepreneurship, entertainment, and leadership and includes Amazon-specific training programs focused on personal and team development. Our focus on diversity and inclusion has been independently recognized by the Human Rights Campaign’s Corporate Equality Index; the NAACP Equity, Inclusion, and Empowerment Index; the Disability Equality Index; and by the 2019 American Foundation for the Blind Helen Keller Achievement Award. More information about Amazon’s diversity and inclusion efforts and employee demographics is publicly available at http://www.amazon.com/diversity.

In addition, pursuant to its charter, the Leadership Development and Compensation Committee of the Board oversees the Company’s strategies and policies related to human capital management. Its responsibilities specifically include overseeing and monitoring the Company’s policies on diversity and inclusion, compensation and benefits, and retention. The Board is also committed to its own diversity. The Nominating and Corporate Governance Committee of the Board includes, and has any search firm that it engages include, women and minority candidates in the pool from which it selects director candidates. Currently, over half of our independent directors are women, two (22%) of our independent directors are minorities, and two of the three Board committees are chaired by women.

Further, the proposal requests that we report on a “global median gender/racial pay gap” but does not define this term. The proposal defines “gender pay gap” but makes no attempt to articulate or describe the concept of a “racial pay gap,” much less how to measure such a gap on a global basis. For a global company like Amazon, the racial and ethnic composition of minority groups varies depending on the country or geographic region. Therefore, given the proposal’s vagueness on what a “global median gender/racial pay gap” would entail, it may not be possible to calculate and disclose a global racial pay gap statistic.

Given our focused attention on ensuring equal pay practices through our policies and practices as reflected by our published pay statistics and our commitment to hiring and identifying the best talent from all backgrounds for diverse and inclusive teams, the Board recommends that shareholders vote against this proposal.

 

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting an alternative report on gender/

racial pay.

 

 

 

		2020 Proxy Statement		35

SHAREHOLDER PROPOSALS

 

ITEM 10—SHAREHOLDER PROPOSAL REQUESTING A REPORT ON CERTAIN COMMUNITY IMPACTS

Beginning of Shareholder Proposal and Statement of Support:

WHEREAS:

“Environmental racism” occurs when pollution is disproportionately concentrated in communities of color. “Environmental justice” occurs when pollution is borne equitably across communities regardless of their racial profile.

Popular and governmental attention to environmental justice increased in 2019:

 

•

First Presidential forum held on environmental justice (https://www.theguardian.com/environment/2019/nov/09/warren-booker-environmental-justice-forum-south-carolina)

 

•

Senator Cory Booker introduced “The Environmental Justice Act of 2019” and co-founded an “Environmental Justice Caucus” within the Senate (https://www.booker.senate.gov/?p=press_release&id=966)

 

•

House Natural Resources Committee Chair Raul Grijalva and Rep. McEachin began a process to draft an environmental justice bill (https://naturalresources.house.gov/media/press-releases/chair-grijalva-rep-mceachin-launch-historic-effort-to-draft-environmental- justice-bill-based-on-public-feedback-at-environmental-justice-convening)

 

•

California passed Assembly member Robert Rivas’s environmental justice bill (https://a30.asmdc.org/press-releases/20190912-state-legislature-approves-assemblymember-robert-rivas-environmental-justice)

 

•

A New School report counted 40 local policies aimed at achieving environmental justice (https://static1.squarespace.com/static/5d14dab43967cc000179f3d2/t/5d5c4bd0e1d5150001a5a919/1566329811163/NRDC_FinalReport_ 04.15.2019.pdf).

Evidence suggests Amazon’s logistics operations may have an environmentally racist impact. Beyond carbon dioxide which drives climate change, diesel trucks also emit other dangerous substances:

 

•

Nitrogen dioxide and microscopic particles permanently stunt lung development in children. (https://www.citylab.com/environment/2019/04/air-pollution-data-health-effects-child-asthma-choked-book/587545/)

 

•

Heat causes nitrogen oxides to combine with volatile organic compounds to become ozone. Ozone causes breathing problems and premature death. (https://www.lung.org/our-initiatives/healthy-air/outdoor/air-pollution/ozone.html)

San Bernardino, California is a major logistics hub for Amazon and has some of the worst air quality in the country. Children in this region have many adverse health symptoms linked to diesel emissions. (https://www.lung.org/about-us/blog/2016/11/battling-for-breath.html)

A coalition representing the “majority-minority” community is opposing a proposed air hub where Amazon is the “rumored tenant” and which would draw more trucks, worsening the pollution in the community. (https://www.sbsun.com/2019/12/06/bernie-sanders-xavier-becerra-urge-faa-to-study-impacts-of-planned-logistics-center-at-san-bernardino-airport/)

The following are Amazon warehouses in communities of color, defined as zip codes with “majority-minority” populations, that are also within a top-20 smog-polluted metropolitan region, according to the American Lung Association.

Communities where a large proportion of the population is Latinx:

 

•

California: San Bernardino, Eastvale, Fontana, Rialto, Redlands, Riverside, Moreno Valley, Perris, Beaumont, Long Beach, Fresno, Sacramento, Stockton, Tracy, Patterson

 

•

Arizona: Phoenix, Tolleson

 

•

Connecticut: Windsor

 

•

Illinois: Waukegan

 

36

SHAREHOLDER PROPOSALS

 

•

Nevada: North Las Vegas

 

•

Texas: Houston, Dallas, Wilmer

 

•

New Jersey: Carteret

 

•

Utah: Salt Lake City

Communities where a large proportion of the population is Black:

 

•

Colorado: Aurora

 

•

Georgia: Union City, Lithia Springs, Stone Mountain

 

•

Illinois: Joliet, Romeoville

 

•

Texas: Fort Worth, Dallas, Lancaster

This list reveals that many communities of color throughout the United States are heavily impacted by Amazon’s pollution. When considering freight routes, including rail and air transportation, Amazon has an even larger impact on communities of color.

Amazon could face regulatory, operational, and reputational risk from the possible disproportionate impact of its pollution on communities of color.

Resolved:

Shareholders request that Amazon prepare a public report, describing its efforts, above and beyond legal and regulatory compliance, to identify and reduce disproportionate environmental and health harms to communities of color, associated with past, present and future pollution from its delivery logistics and other operations. The report should be prepared at reasonable expense and may exclude confidential information.

End of Shareholder Proposal and Statement of Support

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 10

Amazon is committed to sustainability and social responsibility as we outline in the Amazon Global Human Rights Principles, which manifests our commitment to the people, workers, and communities that support our entire value chain so that they are treated with fundamental dignity and respect.²¹

For the operations sites in the locations the proponents list above, it is important to note that we are taking steps to significantly reduce the level of emissions from trucks used to transport products to and from the sites. We are in the process of converting much of our transportation fleet from diesel and other fossil fuels to electric, and in 2019, we announced the order of 100,000 Rivian electric vehicles (“EVs”) customized for package delivery, the largest order ever of EV vehicles. We plan to have 10,000 of these EVs on the road by 2021 and all 100,000 EVs on the road by 2030, saving 4 million metric tons of carbon per year by 2030. We are also investing in the electrification of Class 8 tractors, Class 6 box trucks, yard hostlers, and airport ground handling equipment, and will have electric models of each on the road in 2020.

We regularly analyze environmental and social impacts of our businesses and assess how we can positively contribute to and manage impacts on the many communities in which we operate across the United States and the world. We report on many of these activities through our sustainability website available at https://sustainability.aboutamazon.com/. The website provides information on our sustainability efforts, our community impact and work, and how we strive to support underrepresented and underprivileged communities. In addition to our efforts to reduce the environmental impact of our operations, we strive to have a positive impact on other aspects of the communities in which we operate by driving economic growth and supporting non-profits and community organizations. Among other things, when a fulfillment center is first established in a community, it is generally accompanied by significant capital investments by Amazon and others, the creation of new jobs with Amazon and other employers, and sizeable increases in sales tax revenue.²²

 

21	See https://sustainability.aboutamazon.com/governance/amazon-global-human-rights-principles.

 

22	See https://blog.aboutamazon.com/job-creation-and-investment/the-amazon-effect-what-a-fulfillment-center-means-to-its-community.

 

 

		2020 Proxy Statement		37

SHAREHOLDER PROPOSALS

 

In September 2019, we announced The Climate Pledge with our co-founder Global Optimism. The Climate Pledge is a commitment to be net zero carbon by 2040—a decade ahead of the Paris Agreement’s goal of 2050.²³ In furtherance of this goal, we launched Shipment Zero, our vision to make all Amazon shipments net zero carbon, with 50% of all shipments net zero by 2030. Our sustainability website also includes information on our carbon footprint and other sustainability metrics that share the progress that we are making towards reaching The Climate Pledge. To execute on the Climate Pledge, we will need to reduce carbon emissions in all communities in which we operate around the world.

To help us meet The Climate Pledge, we are rapidly transitioning to renewable energy, which further helps the communities in which we operate. We have committed to operating with 80% renewable energy by 2024 and 100% by 2030. We have installed over 60 solar rooftops on fulfillment centers across the world, with 40 located in the United States, including 29 of the 34 communities listed in the shareholder proposal, and we are in the process of installing solar rooftops in many of the remaining communities. The capacity of the solar rooftops installed in the identified communities total 59 MW, enough to power 9,400 average U.S. homes. Alongside our investments in large, off-site wind and solar farms, this rooftop solar program reduces our use of fossil fuel and carbon emissions. Our largest renewable energy project to date is Amazon Wind Farm Texas in Scurry County, West Texas, about 3.5 hours from the Dallas-Fort Worth metro area. In addition, we have implemented energy efficiency projects including Retro-Commissioning, LED upgrades, Building Management System (BMS) upgrades, and High efficiency HVAC system upgrades at all locations where we have not yet installed rooftop solar systems and at the majority of all other locations listed.

Finally, we are committed to making the communities in which we operate better from an employment and financial, as well as environmental, perspective. We pay a minimum wage of $15 an hour to all of our full-time, part-time, temporary, and seasonal employees across the U.S.²⁴ We provide industry-leading, comprehensive benefits. We create long-term, innovative, and high impact programs that leverage our unique assets and culture. For example, we have donated more than $1.5 million to charities in California through monetary and in-kind donations. As part of our efforts to invest in school robotics and STEM education programs, libraries, and after-school programs supporting families, Amazon contributes to various groups in California’s Inland Empire, including the Corona High School STEM and Robotics program, Feeding America of San Bernardino, the San Bernardino Library Foundation, and the San Bernardino Parks and Recreation.²⁵ We make similar contributions to support schools and organizations in other communities cited in the proposal, including in Arizona (Phoenix and Tolleson), Colorado (Aurora), Illinois (Waukegan and Joliet), Nevada (North Las Vegas), and Utah (Salt Lake City). We publish additional information regarding investments we make in our communities through various pages on our website, such as our website dedicated to job creation and investment at https://www.aboutamazon.com/job-creation-and-investment and our blog’s community page at https://blog.aboutamazon.com/community.

The Board believes that our existing initiatives, including those detailed above, demonstrate that we are already responsibly managing the environmental impact of our operations on the communities in which we operate, including communities of color, and recommends that shareholders vote against this proposal.

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting a report on certain community impacts.

 

ITEM 11—SHAREHOLDER PROPOSAL REQUESTING A REPORT ON VIEWPOINT DISCRIMINATION

Beginning of Shareholder Proposal and Statement of Support:

Viewpoint Discrimination Risk Reporting

Whereas, Shareholders of Amazon.com, Inc. (“Amazon”) invest in the company to receive maximum return on their ownership investment in Amazon, without the costs and risks associated with Amazon restricting specific social, political, or religious views.

 

23	See https://blog.aboutamazon.com/sustainability/the-climate-pledge.

24	See https://www.aboutamazon.com/our-company/our-positions.

25	See https://blog.aboutamazon.com/job-creation-and-investment/the-amazon-effect-what-a-fulfillment-center-means-to-its-community.

 

38

SHAREHOLDER PROPOSALS

 

Whereas, any decision by Amazon to either endorse or reject social, political, or religious views may alienate customers, harm the company’s reputation, and negatively impact business performance.

Whereas, the City of Seattle, the State of Washington, the United States, and several International Conventions prohibit discrimination against religious groups and beliefs, and the City of Seattle prohibits discrimination against political ideology.

Resolved: Shareholders request that Amazon issue a report, at reasonable cost and omitting proprietary information, evaluating the range of risks and costs associated with discriminating against different social, political, and religious viewpoints.

Supporting Statement

A large part of Amazon’s dynamic success is its integration with the global economy through partnerships with logistical service providers and independent content creators. Any policy that discriminates against delivery partners, content creators, or customers based on social, political, or religious views obstructs the near-limitless potential that Amazon’s innovative approach has unlocked.

One example of Amazon’s choice to discriminate against social, political, or religious views is its exclusion of U.S. Internal Revenue Service-approved charities from receiving customer-selected donations through the Amazon Smile Program. This program has donated over $100 million to nonprofits, making it one of the largest sources of consumer earmarked charitable support in the United States.¹ Amazon’s implementation of viewpoint-discriminatory policies in the Smile Program itself stems from a reliance on viewpoint-discriminatory, partisan, and discredited sources.²

We are also concerned that the Company’s failure to respect diverse social, political, and religious viewpoints in the Smile program is symptomatic of a tendency to discriminate against such views more broadly. For example, although Amazon’s policies state “we provide our customers with access to a variety of viewpoints, including books that some customers may find objectionable,” it has recently begun removing books based on customer objections.³ And, while Amazon publicly affirms its commitment to different perspectives, it officially opposed a shareholder proposal to gauge progress in ideological diversity on the Board of Directors in its 2019 proxy materials.

The shareholders should be aware of the extent to which discrimination against social, political, or religious views by Amazon in its partnerships, content policies, and options for customer-selected charitable donations may jeopardize Amazon’s current market-dominance and may negatively affect important social dynamics beyond Amazon’s immediate business impact.

We therefore ask and recommend that the report called for include, among other issues at board and management discretion:

 

1.	Risks associated with relying on a partisan and external source to determine eligibility for charitable support from third-party customers.

 

2.	Risks associated with regulating content on the platform based on its social, political, or religious viewpoint.

 

3.	A full evaluation of viewpoint bias and associated risks to ensure that Amazon is making balanced decisions and that it is acting consistent with its commitment to diversity.

 

1	https://techcrunch.com/2018/10/29/amazonsmile-has-raised-100-million-for-charity/

 

2	https://www.currentaffairs.org/2019/03/the-southern-poverty-law-center-is-everything-thats-wrong-with-liberalism;

https://www.politico.com/magazine/story/2017/06/28/morris-dees-splc-trump-southern-poverty-law-center-215312; https://www.cnn.com/2019/03/29/us/splc-leadership-crisis/index.html.

 

3	https://www.christianpost.com/news/christian-authors-blast-amazon-banning-their-books-selling-pedophilia-titles.html

End of Shareholder Proposal and Statement of Support

 

		2020 Proxy Statement		39

SHAREHOLDER PROPOSALS

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 11

We take seriously our commitment to diversity and respect for people from all backgrounds, including gender, race, ethnicity, religion, sexual orientation, disability, and other dimensions of diversity, which are enduring values for us as reflected in a number of Company policies, including the Amazon Global Human Rights Principles.²⁶ Diversity and inclusion are cornerstones of our continued success and critical components of our culture, “help[ing] us better serve customers, selling partners, content creators, employees, and community stakeholders from every background.”²⁷ We serve diverse customer sets, operate in diverse communities, and rely on a diverse workforce. The policies and procedures we have in place for our employees, sellers, and customers are intended to foster diversity and inclusion and promote respect for all people. We maintain these policies to facilitate a welcoming environment for our global customers and selling partners while offering the widest selection of items on earth. We believe “[d]iversity and inclusion are good for business—and more fundamentally—simply right.”²⁸

In addition to measures designed to combat discrimination, we have thorough risk management processes to protect against risks to the Company, including risks related to the application of our policies. As part of this process, the Nominating and Corporate Governance Committee oversees and monitors the Company’s policies and initiatives relating to corporate social responsibility, including human rights and ethical business practices, and related risks most relevant to the Company’s operations and engagement with customers, suppliers, and communities, other than with respect to human capital management matters, which are overseen by the Leadership Development and Compensation Committee, and compliance and controls matters, which are overseen by the Audit Committee.

In light of our demonstrated commitment to our core values of diversity and inclusion for all stakeholders of Amazon, from customers to sellers to employees, as well as our robust risk management process, the Board recommends that shareholders vote against this proposal.

 

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting a report on viewpoint discrimination.

 

ITEM 12—SHAREHOLDER PROPOSAL REQUESTING A REPORT ON PROMOTION DATA

Beginning of Shareholder Proposal and Statement of Support:

Whereas: Institutionalized sexism, compounded by racism, has become an undeniable, visible, widespread, and multifaceted problem in the tech industry:

 

•

The topic of sexism in the tech industry has been covered by major media outlets:

 

○

(https://www.washingtonpost.com/outlook/2019/02/19/women-built-tech-industry-then-they-were-pushed-out/)

 

○

(https://www.fastcompany.com/40477163/the-industry-is-fundamentally-broken-women-on-sexism-in-silicon-valley)

 

○

(https://www.theguardian.com/world/2018/mar/17/sexual-harassment-silicon-valley-emily-chang-brotopia-interview)

 

○

(https://www.newyorker.com/magazine/2017/11/20/the-tech-industrys-gender-discrimination-problem)

 

•

At Google, tens of thousands of workers walked off the job to protest the mishandling of sexual harassment. (https://www.nytimes.com/2018/11/01/technology/google-walkout-sexual-harassment.html)

 

•

The media has reported on male employees at Microsoft and Google, openly questioning the innate capacity of women to be tech workers. (https://www.nbcnews.com/business/business-news/google-employee-s-anti-diversity-manifesto-women-s-neuroticism-goes-n790401) (https://arstechnica.com/tech-policy/2019/04/now-its-microsofts-turn-for-an-anti-diversity-internal-revolt)

 

26

See, e.g., Amazon.com Code of Business Conduct and Ethics, https://ir.aboutamazon.com/corporate-governance/documents-charters/code-business-conduct-and-ethics; Amazon Global Human Right Principles, https://sustainability.aboutamazon.com/governance/amazon-global-human-rights-principles (“As outlined in our Code of Business Conduct and Ethics, we do not tolerate discrimination”).

 

27	See https://www.aboutamazon.com/working-at-amazon/diversity-and-inclusion/diversity-and-inclusion-at-amazon.

 

28	See https://www.aboutamazon.com/our-company/our-positions.

 

40

SHAREHOLDER PROPOSALS

 

•

The presence of multiple high-profile lawsuits at peer companies regarding gender discrimination or gender and race discrimination are an indication of the severity of this problem. Cases include Pao v Byers, Massouris v Microsoft, Huang v. Twitter, Hong v Facebook, Blackwell and Boyd v Salesforce, Vandermeyden v. Tesla and the Oracle case which was brought by the federal government.

 

•

Prominent social theorists assert that race and gender combine to create unique forms of discrimination. (https://en.m.wikipedia.org/wiki/Kimberl%C3%A9_Williams_Crenshaw)

Whereas: Numerous experts have noted that institutionalized sexism, compounded by racism, hurts corporate performance:

 

•

A study of employees who left companies for reasons related to equity revealed significant costs (https://www.smash.org/wp-content/uploads/2015/05/corporate-leavers-survey.pdf)

 

•

A McKinsey study revealed a correlation between more diverse leadership and superior financial performance (https://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters)

 

•

Experts have shown that women are leaving the tech industry because of lack of career advancement opportunities (https://hbr.org/2019/10/why-techs-approach-to-fixing-its-gender-inequality-isnt-working) (https://www.fastcompany.com/90274067/this-is-why-women-leave-jobs-in-tech) (https://medium.com/tech-diversity-files/the-real-reason-women-quit-tech-and-how-to-address-it-6dfb606929fd)

 

•

Other analysts have shown that race combines with gender to create even greater barriers to advancement for women of color (https://medium.com/awaken-blog/intersectionality-101-why-were-focusing-on-women-doesn-t-work-for-diversity-inclusion-8f591d196789) (https://www.vox.com/2017/10/3/16401054/gender-race-executive-professional-roles-promotion-hiring-people-color-women)

Whereas: Gender balance among Amazon’s upper ranks is a challenge

 

•

Amazon’s overall workforce is 58% men and 42% women (https://www.aboutamazon.com/working-at-amazon/diversity-and-inclusion/our-workforce-data)

 

•

Amazon’s managers are 73% men and 27% women (https://www.aboutamazon.com/working-at-amazon/diversity-and-inclusion/our-workforce-data)

 

•

Amazon’s top 22 executives – called the S-Team – are 86% men and 14% women (https://www.geekwire.com/2019/amazon-expands-bezos-elite-s-team-adding-6-execs-emerging-branches-company/)

Whereas: Researchers have noted that analyzing who a company promotes is an effective way of revealing bias against women and underrepresented minorities.

(https://hbr.org/2019/10/why-techs-approach-to-fixing-its-gender-inequality-isnt-working)

(https://www.fastcompany.com/90274067/this-is-why-women-leave-jobs-in-tech)

(https://medium.com/tech-diversity-files/the-real-reason-women-quit-tech-and-how-to-address-it-6dfb606929fd)

Whereas: Shareholders need data to determine the level of risk due to the possibility of institutionalized sexism at Amazon;

Resolved:

Shareholders request that Amazon prepare a public report, as soon as practicable, disclosing promotion velocity rates at Amazon. Promotion velocity is defined as the time it takes from the date of hire to promotion, or between one promotion and the next. The report should provide promotion velocity rates by title and level for different gender and racial identities. It should be prepared at reasonable expense and may exclude confidential information.

End of Shareholder Proposal and Statement of Support

 

		2020 Proxy Statement		41

SHAREHOLDER PROPOSALS

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 12

We are committed to increasing gender and racial diversity and are continuing to invest in our efforts to bring more women and minorities into leadership positions at Amazon. We know that diversity and inclusion matter and recognize that the advancement of diverse employees begins with proactive recruitment, retention, and development. We track representation of women and underrepresented racial/ethnic minorities because we know that diversity helps us build better teams that are obsessed over our global customer base. Our reported gender and minority pay statistics demonstrate that Amazon pays its employees comparably when analyzing the work of people performing the same jobs.²⁹ In support of our commitment to diversity, we have teams in every business and in executive recruiting dedicated to hiring diverse talent, participate in events and partnerships with groups like AnitaB.org, GEM Consortium Fellows, AfroTech, Lesbians Who Tech, Girls in Tech, and the American Indian Science and Engineering Society, and invest in programs to assist diverse leaders to advance into more senior roles. We built “We Power Tech” to make the future of technology more accessible, flexible, and inclusive.

Reporting on promotion statistics in the manner requested by the proposal would not advance our deep commitment to diversity and inclusion, or provide the information our managers and leaders need to make promotion decisions. Because promotion velocity can be affected by a combination of objective and subjective factors, including prior experience, individual performance, qualifications, and employee interest, the proposed analysis would be uninformative and possibly misleading. Without relevant controls for these factors, simply comparing the speed with which different races and genders are promoted by title and level will not produce useful information about racial or gender disparities.

Rather than relying on misleading or unhelpful measures of promotion velocity, Amazon focuses on maintaining a process for vetting promotions that is robust, balanced, and considers a broad variety of perspectives. For example, managers promote employees based on a range of peer feedback and how an employee meets expectations for the next level. Manager training instructs managers on how to write effective promotion justifications that rely on consistent criteria to gauge an employee’s knowledge, skills, and experience necessary to successfully perform at the next level. This manager training links managers to further content on how to recognize and interrupt potential unconscious biases in decision making. The promotion process also supports fairness by considering employees on their own merits, not comparing them to others.

We also work to develop diverse leaders internally through training and mentoring. We have Leaders’ Workshops within our annual AmazeCon and Conversations on Race and Ethnicity (CORE) conferences, to help our leadership understand and build their team’s culture of inclusion. At AmazeCon, our largest global internal conference, Amazonians examine the intersection of gender with race, sexual orientation, disability status, veteran status, and other dimensions of diversity. This conference has included diversity-oriented talks from academics and external leaders on technology, entrepreneurship, entertainment, and leadership and includes Amazon-specific training programs focused on personal and team development. In addition, our employees have multiple opportunities to seek mentoring relationships, including company-sponsored mentoring programs, and affinity group-organized mentor pairings focused on various communities. Through our mentoring platform, employees are able to select preference for mentors, including by gender. Each month, over 500 new mentorship connections are made across the Company. Furthermore, in 2016 we launched an initiative in India for women-only delivery stations, aimed at empowering women and transforming their lives. Through this initiative, we engaged with women in India to open new employment and leadership opportunities for women in an area where they were not applying for traditional roles.

We also know that the American workforce is changing—there’s a greater need for technical skills in the workplace than ever before, and a huge opportunity for people with the right skills to move into better paying jobs. Amazon already leads the way in pay with a $15 minimum wage, and offers competitive benefits to our employees, like healthcare from day one and up to 20 weeks of parental leave. In 2019, Amazon announced it will invest $700 million in upskilling training programs designed to provide our employees access to the education and training they need to grow their careers. This new initiative will provide 100,000 Amazon employees with access to training programs in high-demand areas like medicine, cloud computing, and machine learning.

In addition to our internal efforts we recognize that there is a diversity pipeline problem in tech, and we are investing in building out the next generation of talent for the industry and expanding the opportunities for students from

 

29	See https://www.aboutamazon.com/working-at-amazon/diversity-and-inclusion/our-workforce-data.

 

42

SHAREHOLDER PROPOSALS

 

underrepresented backgrounds. For example, we bring college students to Amazon’s campus for programs like the Amazon Finance Diversity Leadership Summit to learn from our finance and accounting leaders, and to interview for finance internships at Amazon. We also have deep partnerships with Historically Black Colleges and Universities, Hispanic Serving Institutions, women’s colleges, and tribal colleges.

Our recruiting efforts extend to building the next generation of technical leaders by providing broader access to STEM education. We have committed $50 million to support computer science and STEM programs for underserved and underrepresented communities. Our Amazon Future Engineer program is a comprehensive childhood-to-career initiative to inspire, educate, and train children and young adults from underserved and underrepresented communities to pursue careers in computer science. We aim to inspire more than 10 million kids each year to explore computer science through coding camps and online lessons, fund introductory and Advanced Placement courses in computer science for over 100,000 young people in 2,000 low-income high schools across the U.S., award 100 students from underserved communities pursuing degrees in computer science with four-year $10,000 annual scholarships, and offer internships at Amazon to provide students work experience. We also work with organizations like Code.org and Ada Academy to promote diversity in the STEM pipeline. Other organizations with which we partner to inspire young girls in tech include Girls’ Brigade Singapore and Technovation Spain.

Our retention and development efforts are further fostered by our ten employee-led Affinity Groups, reaching more than 40,000 employees in over 190 chapters globally. These include Amazon People with Disabilities, Amazon Women in Engineering, Asians@Amazon, the Black Employee Network, Body Positive Peers, Families@Amazon, glamazon, Indigenous@Amazon, Latinos@Amazon, Warriors@Amazon, Women@Amazon, and the Women in Finance Initiative. Our focus on diversity and inclusion has been independently recognized by the Human Rights Campaign’s Corporate Equality Index; the NAACP Equity, Inclusion, and Empowerment Index; the Disability Equality Index; and by the 2019 American Foundation for the Blind Helen Keller Achievement Award.

Given our commitment to diversity and inclusion and our efforts to bring more women and minorities into leadership positions, our leadership development and mentorship programs, and our efforts to provide broader access to STEM education in underserved and underrepresented communities, the Board recommends that shareholders vote against this proposal.

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting a report on promotion data.

 

ITEM 13—SHAREHOLDER PROPOSAL REQUESTING AN ADDITIONAL REDUCTION IN THRESHOLD FOR CALLING SPECIAL SHAREHOLDER MEETINGS

Beginning of Shareholder Proposal and Statement of Support:

Special Shareholder Meetings

RESOLVED: The shareholders of Amazon.com, Inc (‘Amazon’ or ‘Company’) hereby request the Board of Directors take the steps necessary to amend our bylaws and each appropriate governing document to give holders with an aggregate of 20% net long of our outstanding common stock the power to call a special shareowner meeting. This proposal does not impact our Board’s current power to call a special meeting.

SUPPORTING STATEMENT: Amazon allows only shareholders with at least 30% of Company shares to call a special meeting, whereas Delaware law allows 10% of company shares to call a special meeting. A meaningful shareholder right to call a special meeting is a way to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle. This is important because there could be 15-months between annual meetings.

Currently, 64% of S&P 500 companies have adopted company bylaws, articles of incorporation, or charter provisions to allow shareholders to call a special meeting. More than half of all S&P 1500 companies allow shareholders this right.

In 2018, the topic of providing shareholders a right to call a special meeting or to reduce the threshold to call such meetings won 50%+ at Netflix, Lincoln National, Omnicom Group, Cummins, and Sprint Aerosystems Holdings, as well as 94% at Nuance Communications.

 

		2020 Proxy Statement		43

SHAREHOLDER PROPOSALS

 

Large funds such as Vanguard, TIAA-CREF, BlackRock and SSgA Funds Management, Inc. (State Street) support the right of shareholders to call special meetings. For example, BlackRock’s 2019 voting policy includes the following:

[S]hareholders should have the right to call a special meeting in cases where a reasonably high proportion of shareholders (typically a minimum of 15% but no higher than 25%) are required to agree to such a meeting before it is called, in order to avoid the waste of corporate resources in addressing narrowly supported interests.

It may be possible to adopt this proposal by simply incorporating this text into our governing documents:

“Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board or the President, and shall be called by the Chairman of the Board or President or Secretary upon the order in writing of a majority of or by resolution of the Board of Directors, or at the request in writing of stockholders owning 20% net long of the entire capital stock of the Corporation issued and outstanding and entitled to vote.”

We urge the Board to join the mainstream of major U.S. companies and establish a right for shareholders owning 20% of our outstanding common stock to call a special meeting.

Please vote for: Special Shareowner Meetings – Proposal 13

End of Shareholder Proposal and Statement of Support

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 13

Following consultation with shareholders in connection with the vote on a similar proposal last year, the Board has determined that the current ownership threshold of 30% for shareholders to call a special meeting should be lowered. Over the last year, we studied various voting thresholds, and selected a new threshold that responds to shareholder requests for a lower threshold but preserves the Company’s ability to focus on the long-term benefit of all shareholders. As a result, the Company determined that decreasing the current threshold from 30% to 25% was in the best interests of the Company and its shareholders. (See Item 4—Approval of Amendment to Certificate of Incorporation to Lower Stock Ownership Threshold for Shareholders to Request a Special Meeting.)

The Company believes that a 20% threshold, as suggested by the proponent, increases the risk of special meetings being called by a few shareholders focused on narrow or short-term interests. For example, event-driven hedge funds could use special meetings to disrupt our business plans or to facilitate self-serving short-term financial strategies. Even if they are ultimately not able to obtain support from a majority of shares, those who might seek to call a special shareholders meeting could subject us to considerable expense, distract management and the Board from important business initiatives, or seek self-interested concessions in exchange for avoiding a special meeting.

In addition, a 25% threshold is most common at large companies. As of January 2020, a 25% ownership threshold is the most common threshold in the S&P 100, in effect at 41% (a plurality) of those companies that permit shareholders to call special meetings.

For these reasons, our Board recommends that shareholders vote against this shareholder proposal and in favor of the proposal put forth by the Company to reduce the special meeting ownership threshold to 25%.

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting an additional reduction in threshold for calling special shareholder meetings.

 

 

44

SHAREHOLDER PROPOSALS

 

ITEM 14—SHAREHOLDER PROPOSAL REQUESTING ADDITIONAL REPORTING ON LOBBYING

Beginning of Shareholder Proposal and Statement of Support:

Lobbying Disclosure

WHEREAS: Full disclosure of Amazon.com’s (“Amazon”) lobbying activities and expenditures is needed to assess whether such lobbying fully serves shareholder best interest, and is consistent with Amazon’s policy goals.

RESOLVED: Amazon shareholders request the preparation of an annual report that discloses Amazon’s:

 

1.	Policies and procedures that govern lobbying, both direct and indirect, and its grassroots lobbying communications.

 

2.	Payments that are used for: (A) direct or indirect lobbying, or (B) grassroots lobbying communications – in each case including the amount of the payment and the recipient.

 

3.	Board and management decision-making processes, and oversight for making the payments described above.

For these purposes, a “grassroots lobbying communication” is one directed to the general public that:

 

•

Refers to specific legislation or regulation,

 

•

Reflects a view on legislation or regulation, or

 

•

Encourages the recipient to take action regarding legislation or regulation.

“Indirect lobbying” is lobbying conducted by trade associations or other organizations to which Amazon contributes. Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state, and federal levels.

This report shall be presented to the Audit Committee and posted on Amazon’s website.

SUPPORTING STATEMENT

From 2015-2018 Amazon spent $48.2 million on federal lobbying, which does not include state lobbying, where Amazon also lobbies but disclosure is uneven or entirely absent. For example, from 2012-2018 Amazon spent $1.38 million lobbying in California. Amazon’s lobbying “to tamp down ballooning scrutiny and threats of heavy regulation” has generated questionable media attention.¹ Amazon also lobbies abroad, in 2018 having spent between €1.75-2.0 million on European lobbying efforts.

Amazon fails to disclose belonging to the Business Roundtable (“BRT”), which spent $23.2 million lobbying dollars in 2018. Amazon signed the socially responsible BRT Statement on the Purpose of the Corporation, yet the BRT lobbies to limit the essential ownership right of stockholders to file shareholder proposals like this one. While Amazon does disclose the gross amounts of trade association and 501(c)4 payments, it does not break out payments by group, and fails to disclose the portions of these payments that are used for lobbying.

Lack of disclosure can present serious reputational risk when its lobbying contradicts Amazon’s public positions. For example, Amazon joined the We Are Still In campaign – launched after President Trump dropped out of the Paris climate agreement – but The New York Times reports² that Amazon donated $15,000 to the Competitive Enterprise Institute, which disputes climate change science. Amazon cofounded The Climate Pledge, announcing a commitment to meet the Paris Agreement 10 years early,³ yet is a member of the U.S. Chamber of Commerce, which has spent over $1.5 billion lobbying since 1998, working actively to undermine the Paris climate accord.⁴ Such contradictions between Amazon’s policy and its lobbying efforts can create reputational damage, negatively impact our ability to attract and retain talent, and harm long-term value.

THEREFORE: Please vote FOR an expansion of Amazon’s lobbying disclosure.

 

1	www.politico.com/story/2019/07/23/amazon-facebook-lobbying-record-1611958

 

2	https://www.nytimes.com/2019/07/10/climate/nyt-climate-newsletter-cei.html

 

3	www.sustainability.aboutamazon.com/sustainable-operations/amazon-co-founds-the-climate-pledge-setting-goal-to-meet-the-paris-agreement-10-years-early

 

4	www.bloomberg.com/news/articles/2017-06-09/paris-pullout-pits-chamber-against-some-of-its-biggest-members

End of Shareholder Proposal and Statement of Support

 

		2020 Proxy Statement		45

SHAREHOLDER PROPOSALS

 

RECOMMENDATION OF THE BOARD OF DIRECTORS ON ITEM 14

To promote transparency regarding the Company’s political contributions and expenditures, we already disclose our federal lobbying activities in compliance with applicable regulations and make our policy governing these activities publicly available. We participate in the policymaking process by informing public officials about our positions on issues significant to our customers and our business. These issues are discussed in the context of existing and proposed laws, legislation, regulations, and policy initiatives, and cover topics such as commerce, intellectual property, trade, data privacy, transportation, and web services, a number of which are discussed in our published positions (available at https://www.aboutamazon.com/our-company/our-positions).

The proposal requests an annual report disclosing our policies and procedures governing direct and indirect lobbying and grassroots lobbying communications. Our policy addressing these activities is set forth in our 2019 U.S. Political Contribution and Expenditure Policy and Statement, which is updated annually and available on our investor relations website.³⁰ As noted in our policy, our political expenditures are approved by our Vice President of Public Policy, reviewed by our Senior Vice President for Global Corporate Affairs and Senior Vice President and General Counsel, and reported on to our Audit Committee. As such, the proposal’s request for a report describing the decision-making processes and oversight for these payments is also addressed by our current disclosures.

In 2019, we complied with all applicable regulations requiring public disclosure of corporate political activity. Our spending on federal government relations efforts is required to be reported to the House and Senate and is publicly available at http://lobbyingdisclosure.house.gov/ and http://www.senate.gov/legislative/Public_Disclosure/LDA_reports.htm. Our spending on state government relations efforts is generally required to be reported and disclosed on applicable state websites such as those maintained by secretaries of state, state ethics and public disclosure commissions, state legislatures, and similar websites. In addition, our 2019 U.S. Political Contribution and Expenditure Policy and Statement annually discloses the political contributions made by the Company and the U.S.-based trade associations, coalitions, charities, and social welfare organizations to which we contributed at least $10,000 in 2019 through the Company’s Public Policy Office, including to the Business Roundtable.

For each of the past three years, our reporting on political expenditures has earned us a place in the top quintile of the CPA-Zicklin Index of Corporate Accountability and Disclosure, which ranks companies’ policies and practices on political disclosure and accountability.³¹ Notably, in previous years, the proponent of this proposal relied on the CPA-Zicklin Index as the gold standard by which companies’ political disclosure and accountability policies and practices should be measured. While the CPA-Zicklin Index is intended to cover political contributions and not lobbying, many of the same criteria analyzed by the CPA-Zicklin Index, under which we score highly, would also broadly apply to our lobbying expenditures.

In 2010, 2012, 2013, 2014, 2015, and 2016 proposals regarding political contributions reporting failed with approximately 79%, 78%, 76%, 79%, 81%, and 95% respectively, of the shares present at the meeting declining to vote for such proposal. In light of the public disclosures we provide regarding our lobbying and political expenditures, we do not believe that preparing a report regarding lobbying as requested in the proposal would be an effective and prudent use of the Company’s time and resources.

 

The Board of Directors recommends a vote “AGAINST” this proposal requesting additional reporting on lobbying.

 

30	Available at https://ir.aboutamazon.com/corporate-governance/documents-charters.

 

31	See https://politicalaccountability.net/hifi/files/index/2017%20Index.pdf; https://politicalaccountability.net/hifi/files/index/2018_CPA-Zicklin_Index.pdf; https://politicalaccountability.net/hifi/files/2019-CPA-Zicklin-Index-Report.pdf.

 

46

 

BENEFICIAL OWNERSHIP OF SHARES

The following table sets forth certain information regarding the beneficial ownership of our common stock as of February 18, 2020 (except as otherwise indicated) by (i) each person or entity known by us to beneficially own more than 5% of our common stock, (ii) each director, (iii) each executive officer for whom compensation information is given in the Summary Compensation Table in this Proxy Statement, and (iv) all directors and executive officers as a group. Except as otherwise indicated, and subject to any interests of the reporting person’s spouse, we believe that the beneficial owners of common stock listed below, based on information furnished by such owners, have sole voting and investment power with respect to such shares. As of February 18, 2020, we had 497,856,129 shares of common stock outstanding.

 

Name and Address of Beneficial Owner		Amount and Nature of Beneficial Ownership				Percent of Class
Jeffrey P. Bezos   410 Terry Avenue North, Seattle, WA 98109			75,049,750	(1)			15.1%
The Vanguard Group, Inc.   100 Vanguard Blvd, Malvern, PA 19355			32,064,108	(2)			6.4%
BlackRock, Inc.   55 East 52nd Street, New York, NY 10055			26,707,477	(3)			5.4%
Rosalind G. Brewer			190				*
Jamie S. Gorelick			6,405				*
Daniel P. Huttenlocher			950				*
Judith A. McGrath			2,324				*
Indra K. Nooyi			368				*
Jonathan J. Rubinstein			7,975				*
Thomas O. Ryder			9,319				*
Patricia Q. Stonesifer			6,845				*
Wendell P. Weeks			1,555				*
Brian T. Olsavsky			1,570				*
Jeffrey M. Blackburn			67,460	(4)			*
Andrew R. Jassy			100,540				*
Jeffrey A. Wilke			68,907	(5)			*
All directors and executive officers as a group (16 persons)			75,334,605	(6)			15.1%

 

*	Less than 1%.

 

(1)	Includes 19,498,534 shares as to which Mr. Bezos has sole voting power and no investment power.

 

(2)

As of December 31, 2019, based on information provided in a Schedule 13G filed February 12, 2020. The Vanguard Group has sole voting power with respect to 645,428 of the reported shares, shared voting power with respect to 113,503 of the reported shares, sole investment power with respect to 31,343,562 of the reported shares, and shared investment power with respect to 720,546 of the reported shares.

 

(3)

As of December 31, 2019, based on information provided in a Schedule 13G filed February 5, 2020. BlackRock, Inc. has sole voting power with respect to 22,914,682 of the reported shares, shared voting power with respect to 0 of the reported shares, and sole investment power with respect to all of the reported shares.

 

(4)	Includes 18,015 shares as to which Mr. Blackburn shares or may be deemed to share voting and investment power. Mr. Blackburn disclaims beneficial ownership of such shares.

 

(5)	Includes 45,699 shares as to which Mr. Wilke shares or may be deemed to share voting and investment power. Mr. Wilke disclaims beneficial ownership of such shares.

 

(6)	Includes 10,447 shares beneficially owned by other executive officers not individually listed in the table.

 

		2020 Proxy Statement		47