Amazon Raises Minimum Wage to $15 But Eliminates Bonuses and Stock Options

On October 2, 2018, one month after Bernie Sanders introduced the “Stop BEZOS Act,” Amazon CEO Jeff Bezos announced the company would raise its minimum wage to $15 per hour for all U.S. employees, effective November 1, 2018. The announcement generated widespread media coverage celebrating Amazon’s apparent responsiveness to worker demands and political pressure. However, within days it emerged that Amazon simultaneously eliminated monthly productivity bonuses and restricted stock unit (RSU) programs that many workers relied on, meaning numerous employees would actually earn less overall despite the headline wage increase.

The Announcement: Public Relations Victory

Bezos framed the wage increase as corporate leadership and responsiveness: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead. We’re excited about this change and encourage our competitors and other large employers to join us.”

The announcement came at a critical moment:

• One month after Sanders’s Stop BEZOS Act targeted Amazon’s low wages
• During escalating media scrutiny of warehouse working conditions
• Amid growing worker organizing efforts demanding $15 minimum wage
• As the holiday shopping season approached, Amazon’s most profitable period

The company positioned itself as a progressive employer voluntarily raising wages, generating positive press coverage and deflecting political criticism. Amazon stated the raise would benefit more than 250,000 full-time, part-time, temporary, and seasonal employees across the United States, including Whole Foods workers.

The Hidden Cost: Eliminated Compensation Programs

As workers received details about the new compensation structure, it became clear that Amazon was taking away benefits even as it raised base wages:

Variable Compensation Pay (VCP) Program Eliminated: Amazon ended monthly bonuses in November 2018 that rewarded workers based on attendance and warehouse productivity. According to employees, an average worker typically received $1,800 to $3,000 annually through this program. The bonuses could reach several hundred dollars per month for workers with good attendance at high-performing facilities.

Restricted Stock Unit (RSU) Program Phased Out: Amazon eliminated its RSU program, which granted shares to workers who stayed with the company for specified periods, typically vesting after one or two years. For longer-tenured workers, these stock grants represented significant compensation, especially as Amazon’s stock price had risen dramatically.

Combined Impact: Most workers who voiced concerns had been with Amazon for more than two years and were already earning close to $15 per hour before the raise. These workers faced losing thousands of dollars annually from eliminated bonuses and stock awards, with the wage increase failing to fully compensate for lost earnings. For some workers, total annual compensation actually decreased.

Worker Reactions: “A Slap in the Face”

Amazon workers expressed anger and betrayal at the compensation changes. Many described the wage announcement as misleading, noting that media coverage celebrated Amazon’s generosity while ignoring that the company was simultaneously cutting other compensation.

Workers particularly resented the timing—right before the holiday season when bonuses would have been most valuable. One Amazon employee told reporters the changes felt like “a slap in the face,” noting that the company framed the wage increase as a benefit while actually reducing overall compensation for many workers.

Longer-tenured workers who had earned promotions and wage increases over time felt especially cheated. These workers had already reached or were approaching $15 per hour through their tenure and performance. The new system eliminated their accumulated advantages—they received minimal or no base wage increase while losing bonuses and stock awards they had earned through loyalty to the company.

Amazon’s Defense: The Math Doesn’t Add Up

Amazon claimed that “the significant increase in hourly cash wages more than compensates for the phase out of incentive pay and RSUs.” However, this assertion only held true for:

• New hires starting at minimum wage
• Part-time workers who received minimal bonuses
• Workers at low-performing facilities with smaller bonus pools

For the substantial number of workers who had been with Amazon for years, earned regular bonuses, and had accumulated RSUs, the math often didn’t work. Some workers calculated they would lose $3,000-5,000 annually even after the wage increase, especially those who had received stock grants during periods when Amazon’s stock price was lower (meaning their vested shares were worth more).

Follow-Up: Damage Control

Facing worker backlash and negative media coverage, Amazon announced in late October 2018 that it would provide “additional pay bumps” to some workers to offset the eliminated bonuses. However, these adjustments were limited and didn’t fully restore lost compensation for most affected workers. The company refused to reinstate the VCP bonus program or RSU grants.

Significance: Corporate Co-optation of Worker Demands

The $15 wage increase represented a masterclass in corporate public relations that neutralized political pressure while minimizing actual costs to the company. Amazon successfully:

Generated Positive Coverage: The initial announcement dominated headlines, with many outlets reporting uncritically on Amazon’s wage increase as a victory for workers and proof of the company’s responsiveness.

Deflected Political Pressure: The announcement undercut Sanders’s Stop BEZOS Act and other political campaigns targeting Amazon’s wages, allowing the company to claim it had addressed worker concerns voluntarily.

Reduced Overall Labor Costs: By eliminating bonuses and stock awards while raising base wages, Amazon potentially reduced its total compensation costs while appearing to benefit workers. The company shifted from variable compensation (bonuses tied to performance) to fixed compensation (hourly wages), giving management more predictable labor costs.

Divided Workers: The changes created winners (new hires, lowest-wage workers) and losers (longer-tenured workers, high performers), fracturing worker solidarity that might have supported unionization or collective action.

Co-opted the $15 Demand: By adopting the $15 minimum wage demand that workers and activists had rallied around, Amazon appropriated the movement’s signature achievement while structuring compensation to minimize its cost.

The episode demonstrated how sophisticated corporations could respond to political and labor pressure in ways that appeared conciliatory while actually serving corporate interests. Amazon transformed a potential political and organizing crisis into a public relations victory, setting a pattern it would repeat in future confrontations with workers and regulators.

For labor advocates, the incident highlighted the limitations of focusing solely on headline wage numbers without addressing total compensation, working conditions, and structural power imbalances. It reinforced the need for union representation that could negotiate entire compensation packages and prevent companies from unilaterally eliminating benefits, and demonstrated why worker organizing couldn’t rely on corporate voluntarism or political pressure alone.

The Amazon wage increase also established a precedent other companies would follow: announce high-profile raises while quietly cutting other compensation, generating positive media coverage while controlling costs. This became a common corporate strategy for responding to minimum wage campaigns and political pressure without fundamentally improving worker welfare or ceding power to workers.