Are you feeling successful? Well, there’s a bit more to it than that. For the last two decades, Amazon CEO and billionaire Jeff Bezos has been paid the same salary by Amazon: $81,840. And, as the richest person in the world, Jeff Bezos is living proof that the salary doesn’t make the man. His ownership in Amazon stock is what drives his net worth, but he also hasn’t taken stock-based compensation. His fortune rides upon the success of the business itself — a major hallmark of many successful entrepreneurs.
Just a note to Bezos’ net worth: after a recent and highly publicized divorce, Bezos’ ex-wife walked away with 25% of Bezos’ interest in Amazon, making Mackenzie Bezos the third richest woman in the world. Just a fraction of the amount that Bezos had was able to grant this status, and Bezos himself remains well above the second richest man in the world: he has $128 billion in net worth over Bill Gates’ $92.8 billion. And about that net worth…
A salary of $81,840 means little to a billionaire due to his net worth. But Bezos’ net worth hasn’t been doing great lately either, because it’s been highly volatile. While Bezos has seen his net worth rise steadily year-over-year, he’s also seen it plunge by billions of dollars in a single day of trading. With his net worth completely bound up in Amazon, his own money rises and falls dependent on it. Like many billionaires, his wealth isn’t liquid and in cash: it’s all tied up in companies.
Of course, there is a certain point at which such high levels of wealth become somewhat negligible: there is hardly a thing in the world that you can’t purchase if you have $1 billion in the bank. But trending upwards or downwards can mean something very important about success.
In the past, many people have discovered exactly how much ownership in a rising company can mean — by selling stock that would eventually be worth millions for a few dollars. It’s not unusual for company founders to take supremely low salaries in lieu of growing their business. In fact, it’s more likely that non-founder CEOs are the ones that are going to be raking in millions: professional executives who have been head-hunted by the owner of the business.
Owners often take much less: Steve Jobs took a salary of $1 for years, but he owned 5.5 million shares of Apple. Taking a low salary allowed the company to focus its money elsewhere, and the success of the business was positioned upon its shares. Of course, this is also a gamble. If a company doesn’t become the next Amazon, Microsoft, or Apple, taking a low salary can just as easily leave a founder out with nothing at all.
Despite a few high ticket purchases such as $25 million in real estate and a $65 million corporate jet, Bezos himself has remained relatively humble. His every-day driver was a 1996 Honda well after he made his fortune, and most of his spending occurs through other corporations. This is not unlike the house that Warren Buffet purchased for $31,500 in 1958 and still lives in. It seems like the world’s ultra wealthy have other things on their mind.
And it’s true: when people focus on accruing wealth rather than spending it, they tend to be more successful. Choices like pulling a very low salary for a business to see the business grow are the type of anti-instant-gratification philosophies that have built the most significant business people. Of course, there’s also no telling how many people made the same choices and instead failed.
What’s next for Bezos? According to CEO, Amazon is still a fairly small amount of retail spending, and there’s still room to grow. Yet there is competition out there, including Target, Walmart, and Best Buy. With many businesses still expanding their online sectors, Amazon may survive based on its serious diversification: Amazon Web Services, Amazon Music, and Amazon Streaming. Regardless, it remains one of the major pillars of tech and retail.
Regards,
Ethan Warrick
Editor
Wealth Authority
