Bonus removal cancels out Amazon’s UK pay rise
13 October 2018
Amazon’s much heralded decision to increase workers’ wages to £9.50 an hour in the UK and £10.50 in London is a fraud.
According to a report from the GMB trade union, any wage increase workers receive will be largely cancelled out by the loss of share and productivity incentive schemes.
Currently, Amazon’s warehouse workers receive one Amazon share for every year they work at the company, and one additional share after five years. If workers hold on to the shares, known as Restricted Stock Units (RSU), for two years, they are able to cash them in tax free. Under the new programme, workers will be stripped of these stock bonuses in favour of a “sharesave” scheme, which would permit Amazon employees to buy shares at a discounted price over three or five years.
With Amazon share prices having seen a 70 percent increase just this year, and continuing to grow, the loss of these share bonuses over the next years will likely see Amazon workers losing out on much more than the £1,500 a year that these stocks are currently worth.
The loss of share benefits is equivalent to roughly half the £3,120 increase promised to Amazon warehouse workers outside of London, who currently earn a poverty wage of around £17,000 a year before tax.
Amazon employees will also lose cash bonuses for meeting performance targets. These bonuses, known as Variable Compensation Pay (VCP), allow employees to earn 8 percent on top of their monthly salary, and 16 percent over the busy Christmas period. According to an Amazon employee who spoke to Yahoo Finance, the average Amazon worker usually receives between $1,800 (£1,377) and $3,000 (£2,295) a year through the VCP program.
The pay rise therefore leaves…