Among other things, Amazon’s deal to buy Whole Foods will mark the end of one of the most reasonable executive compensation schemes in America. No executive at the company is allowed to be paid more than 19 times the average worker’s salary.
Amazon’s deal to buy Whole Foods may mark a number of things: the end of Whole Foods as an independent company; the end of grocery business; the end of the hard line between the internet and brick and mortar; the moment we should have known that Amazon was going to take over the economy, though I am not entirely convinced of that.
It will also mark the end of one of the most reasonable — perhaps the only reasonable — executive compensation schemes in America.
No one will cry for Whole Foods CEO John Mackey, of course. Forbes estimates his net worth at $76 million. The Amazon deal made him $9 million richer practically overnight. That nine-figure payout is one most Americans will never see. But it should also be noted that in America’s executive suites, a nine-figure payout — especially when a megadeal like Amazon-Whole Foods is involved — is just as rare. They are usually much, much higher.
Consider the payout for another deal that was in the news recently — Verizon’s purchase of Yahoo, which closed last week. Yahoo CEO Marissa Mayer pocketed nearly a quarter of a billion dollars. That translates into $900,000 a week for her five-year run as CEO, which is widely seen as a near-total failure. The similar figure for Mackey, based on more than 2,000 weeks at the company he co-founded in 1978 and expanded into a business with $15 billion in sales: $37,500. And the entire payout comes from the fact that Mackey is, like many others, a Whole Foods shareholder. He will receive no merger bonus. No golden parachute will deploy. There are no options to vest. Mackey hasn’t be granted one in more than a decade.