Public scrutiny of Amazon is inevitable, CEO Jeff Bezos tells investors: “I think it’s a natural piece of being a large corporation.”
Amazon has tried for years to keep its annual shareholders meeting a quiet affair, a moment to reflect on the company’s year and reiterate its long-term ambitions.
Increasingly, that’s become a challenge as the retailer’s range of businesses upends industries and its growing workforce puts its practices under the microscope.
That was on display Wednesday at the company’s annual event, where investors mixed praise for Amazon’s business prowess with questions about its role in other arenas. Meanwhile, a few dozen protesters, by now a common sight at Amazon’s gatherings, stood outside the meeting at Fremont Studios in Seattle.
One shareholder asked Chief Executive Jeff Bezos about what he called “a bumpy year” for the company, citing President Donald Trump’s public attacks and rumblings that antitrust regulators may take a look at Amazon’s growing influence.
Most Read Business Stories
- The tax-filing deadline was delayed, but read the fine print. You may still need to pay by April 15.
- South Lake Union office building will become life science labs instead after $119 million deal
- Tweaked COVID vaccines in testing aim to fend off variants
- Quantum technology emerges from the lab to spark a mini startup boom
- New electrical flaw grounds more than 60 737 MAXs, adding to Boeing's woes
Such scrutiny was inevitable, Bezos responded.
“I think it’s a natural piece of being a large corporation,” he said. ”There’s only one way to handle it, and that is we have to conduct ourselves in such a way that when we are scrutinized we pass with flying colors.”
Amazon grew ever larger in the last year, posting record profit of $3 billion in 2017 and becoming the second-largest U.S.-based corporate employer behind Walmart.
The company also bought Whole Foods Market, establishing a brick-and-mortar beachhead for the company that primarily had been an online retailer.
That scale has pushed Amazon to concentrate its investments in areas where the company could make a big difference, Bezos said. The company can afford its share of failures, but “we can’t afford to do things that, if they succeed, are small.”
Areas he said could prove to be large successes include the company’s retail marketplace investments in India, the Alexa voice software, and the Amazon Studios television and film group.
Amazon perhaps grabbed its biggest headlines in the last year, and the attention of policymakers nationwide, with its surprise announcement that it would seek to build a second headquarters in another city in North America.
Chief Financial Officer Brian Olsavsky, during a recap of Amazon’s milestones, included in his presentation a slide that listed the 20 finalists for what the company calls HQ2.
“Let me preface this slide by saying we have no news to announce today,” he said to groans and laughter from the audience of a couple hundred people.
In voting largely completed before the meeting, shareholders rejected a proposal that would have required Amazon to appoint a company outsider as its board chairman. Bezos has been Amazon’s chief executive and board chair since the company’s initial public offering in 1997.
Some corporate governance-reform advocates say such a structure — essentially allowing the CEO to also run the council charged with supervising that position — can be detrimental to shareholders. Institutional Shareholder Services, which advises big investors on corporate policy, recommended Amazon split those roles.
“Having a top manager who is not his own boss is especially important,” said Lisa Lindsley, an adviser to SumOfUs, the group that spoke in favor of the proposal Wednesday.
Amazon’s board disagreed, pointing out that Bezos’ about 16 percent personal stake in the company, which recently has made him the world’s richest man, also makes him a natural advocate for his fellow owners. The proposal to split the roles drew approval from just 26 percent of shareholder votes.
Investors also voted to re-elect the company’s slate of directors. John Seeley Brown, a researcher who had been on Amazon’s board since 2004, did not seek re-election, leaving the company’s board with nine members.
Amazon did concede to one shareholder proposal before the meeting, agreeing earlier this month to formalize a rule that the board consider diverse candidates along racial and gender lines for future openings.
A shareholder group had proposed that Amazon adopt a so-called Rooney Rule, highlighting the racial homogeneity of the company’s directors.
All of Amazon’s board members are white. Three are women. Bezos, 54, is the youngest.
The Rev. Jesse Jackson, who took his campaign to push technology firms to hire more members of underrepresented groups to Amazon a year ago, thanked Bezos in person on Wednesday for the board’s move, but said more needed to be done.
“We hope you will go beyond the resolution,” the civil-rights leader said at the meeting. An all-white board, he said, was “not fair, not accurate, not good.”
Outside the meeting, a range of protesters stood behind temporary guardrails, making for a more lively scene than the crowd of executives and shareholders inside.
There was a picket line of pilots, in a long fight over what they say is low pay and poor working conditions with the two air carriers that Amazon hires to provide airfreight services.
A gathering of advocates of good corporate governance, environmentalists and labor unions spoke around a cardboard cutout of Bezos in a robot suit, a reference to the CEO’s appearance in such a machine at a conference last year.
Freeman Ryan, with Socialist Alternative, was on hand in part to highlight the group’s role in pushing for Seattle’s newly approved head tax on large employers to fund homelessness services. Amazon, Seattle’s largest employer, opposed the measure, and said its enactment caused the company to question its growth plans here.
The shareholders meeting is “an opportunity to send a message,” Freeman said.
After the meeting concluded, a group of drag queens performed on a nearby street corner. The show was convened by No Gay No Way, a campaign pushing Amazon to place its second headquarters in a city with legal protections for lesbian, gay, bisexual and transgender people. Employees have raised similar issues internally.
Conor Gaughan, the campaign’s manager, said that, increasingly, companies like Amazon were expected to take a firm and public stance on social issues.
“You can’t, as easily these days, waffle,” Gaughan said at an event this week in Seattle to spotlight his group’s campaign. “The stakes are too high.”