Does Jeff Bezos Take A Salary?

/ Maria's Green Cleaning/

Amazon founder Jeff Bezos is one of the richest men in the world. With a net worth that changes in the hundreds of billions, many wonder how much of the man earns as a salary each year. Unlike with traditional corporate executives who receive hefty annual salaries and bonuses, Bezos’ financial blueprint has always been different. His wealth, much of it not derived from a paycheck, comes from his enormous stake in Amazon. This article will discuss at whether Jeff Bezos receives a salary, how he makes his money and the financial framework that has fueled his massive wealth.

A highly detailed, realistic portrait of Jeff Bezos wearing a sharp business suit, with a confident expression.

Jeff Bezos Does Receive A Salary, But It Is Much Lower Than What Many People Expect

Most people assume billionaire Amazon founder Jeff Bezos takes home a huge paycheck every year. Yet, his reported salary has been pretty low amid his net worth. Public financial records show that Bezos has taken an annual salary of $81,840 every year. That figure has remained largely unchanged over the decades even as his wealth has soared. While the salary is still significant compared with what an average worker makes, it is nowhere near the pay top executives of other large companies make.

The Majority Of Jeff Bezos’ Wealth Comes From His Amazon Stock Holdings

Although he has a relatively low salary, Bezos’ true wealth is derived from his stake in Amazon stock. He owned a large percentage of Amazon shares since starting the company in 1994. Those shares have skyrocketed in value, propelling him to be one of the wealthiest people in the world. When Amazon’s shares go up, so does Bezos’ wealth. Rather than taking a high salary, he receives stock appreciation and will sell shares occasionally to create liquid cash when necessary.

Jeff Bezos Has Sold Billions Of Dollars Worth Of Amazon Stock Over The Years

Jeff Bezos, who stepped down as chief executive of Amazon in 2021, has kept selling parts of his portfolio. Over the years, he has sold billions of dollars in shares, using the proceeds to help pay for other ventures along the way, including his space company Blue Origin. Selling stock lets him get his hands on huge amounts of money without requiring a big paycheck from Amazon. This strategy of building wealth is typical of many of the wealthiest people on the planet.

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Jeff Bezos Also Receives Additional Compensation From Amazon For Security And Other Costs

While Bezos’ salary is just over $81,000, he does get additional compensation from Amazon for personal security costs. The company pays to provide him with security, due to the high-profile nature of his work. In certain years, those security-related costs have been greater than $1.5 million. While it is a lot of money, it still pales in comparison to the billions he has earned through his stock holdings.

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Jeff Bezos’ Earnings Have Allowed Him To Invest In Other Businesses And Industries

Outside of Amazon, Bezos has deployed his fortune to invest in a host of other businesses and sectors. He founded Blue Origin, a space exploration firm that has attracted billions in investment. He also bought The Washington Post in 2013, bringing the publication into the digital age. He also invests in a range of startups, real estate, and others, all of which serve to boost his already-solid net worth. He can also grow his fortune while not taking in the bulk of the salary he receives simply because the wealth generating feature in this case is Amazon shares.

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Jeff Bezos’ Approach To Compensation Is Similar To Other Billionaire Founders

Jeff Bezos isn’t the only billionaire who pays himself a relatively small salary and makes most of his money by seeing the stock he holds go up in value. Founders of the metaverse like Meta’s Mark Zuckerberg and Tesla’s Elon Musk use similar strategies. They choose to live on the low side of their bases, often so low as $1, excluding salary as an outlet for company wealth at the cost of stock-based compensation, options and company shares to fill the gap with the content of their incomes. This practice links their financial health to their companies’ success.

Tax Implications Play A Role In How Jeff Bezos Structures His Earnings

Jeff Bezos in front of financial graphs and tax planning documents, with Amazon stock performance and investment portfolios

By receiving a low salary and primarily generating wealth through stock, Bezos ends up paying lower income tax. In the United States, income is taxed at a higher rate than is capital gains from the sale of stock. Because he amassed his wealth by way of stock performance and selective selling, he benefits from capital gains tax rates that are generally lower than standard income tax rates. This was a way to keep more of his income for himself but live like a boss.

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Jeff Bezos’ Wealth Has Funded Philanthropic Initiatives And Charitable Giving

Jeff Bezos has been criticized for years for not giving to charity at the level of other billionaires like Bill Gates, even with his vast fortune. But for the past few years he has donated billions to various causes. He has pledged through the Bezos Earth Fund to spend money to fight climate change. He has also donated millions to groups that address homelessness and education. His wealth, which has been fueled largely by the rise in value of his stock holdings, means he is able to give such big gifts.

Jeff Bezos’ Lifestyle Reflects His Billionaire Status Even Without A High Salary

Though Bezos’ reported salary is small in comparison to his net worth, he still leads a lavish lifestyle. In Washington, he owns a sprawling estate, a beachfront house in Hawaii, and one of the most expensive houses in Los Angeles He's also got an array of luxury cars, a private jet, and often goes on extravagant trips. Trillions of dollars in wealth will be created and destroyed in the coming years  Amazon’s cash-flush role in providing such wealth to Bezos will remain in the market’s flow between stock sales and investments vs his Amazon salary.

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Jeff Bezos’ Net Worth Fluctuates Based On Amazon’s Stock Performance

Unlike with a standard salary that doesn’t vary, Bezos’ total wealth volatility is tied directly to the day-to-day price of Amazon stock. On days when Amazon shares go up, his wealth can swell by billions.

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On the other hand, drop the stock price, and he can lose billions in no time. This fluctuation underscores the difference between earning a high salary vs. building wealth through stock stock holdings.

Even After Stepping Down As CEO, Jeff Bezos Continues To Benefit Financially From Amazon

While Jeff Bezos relinquished the role of chief executive of Amazon in 2021, he is one of the biggest shareholders of the company. He remains hugely influential in Amazon’s future while collecting immense financial gains from its continued profits. His profits from stock appreciates what he could make as a typical salary, a long-term strategic wealth building move.