Jeff Bezos is secure

By Felix Salmon
April 29, 2011
Michelle Leder picks up on an unfortunate bit of English in Amazon's latest proxy filing, in the discussion of the $1.6 million that the company spent on security for CEO Jeff Bezos:

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Michelle Leder picks up on an unfortunate bit of English in Amazon’s latest proxy filing, in the discussion of the $1.6 million that the company spent on security for CEO Jeff Bezos:

We provide security for Mr. Bezos, including security in addition to that provided at business facilities and during business-related travel. We believe that all Company-incurred security costs are reasonable and necessary and for the Company’s benefit, and we believe that the amount of the reported security expenses is especially reasonable in light of Mr. Bezos’ low salary and the fact that he has never received any stock-based compensation.

If you read this closely, it’s hard to see any internal consistency here.

First of all, Amazon admits that the $1.6 million is over and above the security which is provided for Bezos at work and “during business-related travel.” I don’t have the imagination to envisage what kind of personal security $1.6 million per year buys, but I wonder whether such expenditure can ever be money well spent.

At some point, security expenses stop making executives safer, and start just making them more paranoid. Nobody ever wants to be the kind of person who sends out staffers a few days in advance when they’ve been invited over somewhere for dinner, just to check out the entrances, exits, and safe rooms. And even fewer people spend their own money on such services. But if your employer is giving you such services “for free,” then it probably gets harder to politely decline the offer — especially when your employer, which is also the company you founded, says that those services are “necessary and for the Company’s benefit.”

But then comes that telling phrase: the $1.6 million, says Amazon, “is especially reasonable in light of Mr. Bezos’ low salary.” This is basically the what-do-you-give-the-man-who-has-everything argument: Bezos neither wants nor needs a regular paycheck or more stock in Amazon, so how are we to compensate him for all the work he does? Spending $1.6 million a year on his security is a way of giving him something he otherwise wouldn’t have, but which is still valuable to him — the perfect gift. Or, in this case, compensation. It’s the Amazon equivalent of the G5 that a grateful Apple board gave Steve Jobs in 2000.

Amazon is saying here, in as many words, that if Bezos were paid the kind of money that most CEOs get paid, it would be much less reasonable for the company to spend $1.6 million a year on his personal security. But it’s hard to say that at the same time as you’re saying that the expenditure is both reasonable and necessary for the company’s benefit: you can’t really have it both ways.

I wonder how long it’s been since Bezos felt free to do something spontaneous, without worrying about the security implications. If Amazon could give him the ability to do that, it would probably be worth much more than $1.6 million to him. But the next time you’re invited round to Jeff’s place, know this: he’s paying a bunch of people a lot of money to consider you a potential risk to his security. Which might be worth bearing in mind before you offer to help with the dishes.

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