Jeff Bezos, the founder of Amazon, has been a household name for years, especially since he became the richest person in the world in 2017. But how exactly does Bezos make his money from Amazon? Let’s delve into the details.
Jeff Bezos primarily makes money from Amazon through his ownership of Amazon shares, which account for the majority of his wealth. As the company’s stock price increases, so does Bezos’s net worth. In addition, Bezos receives an annual salary in his role as executive chairman of Amazon. His wealth also grows due to Amazon’s expansion and diversification into various sectors, and through his investments in other companies and industries.
Amazon Shares
The primary source of Bezos’s wealth is his ownership stake in Amazon. As of 2023, he owns 12.7% of Amazon’s shares, amounting to more than 64.5 million shares. The value of Bezos’s Amazon shares has grown significantly since he founded the company in 1994 with a $10,000 investment. As the company’s stock price increases, so does Bezos’s wealth.
For instance, on August 4, 2023, Amazon’s stock price soared by 11%, resulting in a $12 billion increase in Bezos’s net worth. However, when Amazon’s stock price declines, Bezos’s net worth takes a hit. In 2022, Amazon’s stock price tumbled 51%, which significantly impacted Bezos’s net worth.
Salary and Other Compensation
In addition to his stock ownership, Bezos received an annual salary as CEO of Amazon. In 2017, his annual salary was reported to be $81,000. However, after stepping down as CEO in 2021, Bezos took on the role of executive chairman. In this position, he received a salary of $81,840 and $1.6 million in security costs in 2022.
Notably, Bezos does not receive bonuses or stock options as part of his compensation from the company. In 2022, Bezos made a total of $1,681,840 in compensation, with $81,840 received as a salary and $1,600,000 coming from other types of compensation, primarily for security arrangements.
Strategic Decisions and Amazon’s Expansion
Bezos’s wealth has also grown due to Amazon’s expansion and diversification. Amazon’s growth has been fueled by its expansion into various sectors, including e-commerce, cloud computing, digital advertising, and streaming media. The company’s revenue increased from $511,000 in 1995 to over $3 billion in 2001 and $300 billion in 2020.
Bezos’s decision-making approach has led to the growth of Amazon’s various businesses, such as Amazon Web Services (AWS), which has become a $54 billion annual sales run rate business. Amazon’s impressive financial performance, such as the 44% increase in sales in the first three months of 2021, has also contributed to the increase in Bezos’ earnings.
Other Investments and Business Ventures
Aside from Amazon, Bezos has also made significant investments in various other companies and industries through his personal venture capital firm, Bezos Expeditions. Some of his notable investments include Google, Uber, Airbnb, Twitter, and Workday. He also owns The Washington Post and the space exploration company Blue Origin.
His investments in early-stage startups have shown huge potential for growth, and he has made major philanthropic donations through initiatives like the Bezos Day One Fund.
In Comparison with Other Billionaires
As of May 2023, Jeff Bezos’s net worth is $139 billion, making him the third-richest person in the world. His wealth is surpassed by Bernard Arnault, with a net worth of $211 billion, and Elon Musk, with a net worth of $180 billion.
In conclusion, Jeff Bezos makes money from Amazon primarily through his ownership of Amazon shares and his role as the executive chairman. His wealth has also grown due to Amazon’s expansion, diversification, and impressive financial performance. His other investments and business ventures also contribute to his overall net worth.
Frequently Asked Questions
What was Jeff Bezos’s role at Amazon?
Jeff Bezos was the CEO of Amazon from its inception in 1994 until 2021. After stepping down as CEO, he took on the role of executive chairman.
What is the Bezos Day One Fund?
The Bezos Day One Fund is a philanthropic initiative launched by Jeff Bezos. It focuses on funding existing non-profits that help homeless families and creating a network of new, non-profit tier-one preschools in low-income communities.
What other companies has Jeff Bezos invested in?
Through his personal venture capital firm, Bezos Expeditions, Jeff Bezos has made significant investments in companies like Google, Uber, Airbnb, Twitter, and Workday. He also owns The Washington Post and the space exploration company Blue Origin.
How does Amazon’s stock price affect Jeff Bezos’s net worth?
As the largest shareholder of Amazon, the value of Jeff Bezos’s net worth is closely tied to the price of Amazon’s stock. When the stock price increases, his net worth also increases. Conversely, when the stock price drops, his net worth decreases.
How much was Jeff Bezos’s salary as CEO of Amazon?
In 2017, Jeff Bezos’s annual salary as CEO of Amazon was reported to be $81,000. However, his total compensation also included other types of compensation, such as security costs.
