New York (CNN Business)Amazon founder Jeff Bezos will transition from CEO to executive chair and pass the reins to Andy Jassy, a 24-year Amazon veteran, later this year, the company announced Tuesday.
Though not as public a figure as Bezos, Jassy is an accomplished executive in his own right — having grown Amazon’s cloud segment, Amazon Web Services, from its inception into a $45 billion business and the company’s biggest moneymaker. Now, he will take over leading the broader company as it builds on a year of massive growth caused by the pandemic.
“Andy is well known inside the company and has been at Amazon almost as long as I have,” Bezos wrote in a letter to employees Tuesday. “He will be an outstanding leader, and he has my full confidence.”
Here are three key things to know about the new leader of the e-commerce giant.
Jassy started at Amazon (AMZN) in 1997, just about three years after Bezos launched the company in his garage and three weeks before the company went public at a valuation of $300 million. It was his first job after graduating from Harvard Business School.
“I took my last final exam at (Harvard Business School) the first Friday in May in 1997, and I started at Amazon the next Monday,” Jassy said on “The Disruptive Voice” podcast last year. “I didn’t know what my job was going to be and what group I was going to work in and what my title was going to be.”
He first worked in a marketing role, and then was placed on a “SWAT team” project exploring other potential product categories for Amazon beyond books. Jassy pitched entering the music business as part of the project.
Jassy also spent time in the early 2000s in a position referred to at the time as Bezos’ “shadow,” a role similar to a corporate chief of staff, which was designed to train promising young execs, according to Ann Hiatt, a former executive business partner for Bezos during Amazon’s early days (where she sat at one of Bezos’ now-legendary “door desks.”) Now a tech-leadership consultant, Hiatt said she worked closely with Jassy during his time as Bezos’ “shadow.”
“If you’d asked me yesterday what I thought the timeline would be of Jeff stepping down as CEO, I would not have guessed now. But if you’d said, ‘Okay, he’s stepping down, who will he choose?’ the first, instant name out of my mouth would be Andy Jassy,” Hiatt said.
“I watched him blossom into this beautiful complimentary executive to Jeff, where he learned to anticipate the questions Jeff would ask, the things he would hate, the things he would love, his leadership style,” Hiatt said. “While Andy, of course, has his own fantastic version of executive, he was trained with those instincts, to prioritize the things that Jeff would and make decisions the same way Jeff would when he’s not in the room. Obviously, he’s taken that on to great heights in his role as CEO of AWS.”
Jassy was there when Amazon decided to launch AWS and operate it as a separate company that served Amazon.com the same way it would any other customer.
“From the very start of AWS, we made a decision that if we wanted to be able to serve a lot of Amazon’s consumer competitors … that we had to make AWS its own separable business with a different leadership team and where Amazon’s consumer businesses were an important customer but just one of many important external customers,” Jassy told CNN of the decision in an interview for a 2019 CNN documentary on Amazon’s history. “We treat Amazon’s consumer business as an external customer.”
At the time, many were skeptical of the decision, given that the computing business was a far cry from Amazon’s core online retail activities. But Jassy has since overseen the growth of AWS into the backbone of much of the internet — something he managed despite not having much of a tech background.
“He brings quite a degree of humility; people didn’t quite realize who he was until recently,” said Jeffrey Sonnenfeld, a Yale School of Management professor. “He’s definitely very humble, he’s not a self promoter, which is sort of unusual to be at this level in the tech space.”
How much does he earn?
Jassy’s base salary, like that of several other top execs, was $175,000 in 2019, according to Amazon’s most recent Proxy statement published in 2020.
In 2019, his total compensation was $348,809. But a year earlier, his pay totaled more than $19.7 million, thanks to a nearly $19.5 million stock award that vested that year. By contrast, Jeff Bezos’ base salary was $81,840, and total compensation in 2019 was nearly $1.7 million, though Bezos owns a larger share of the company’s stock (nearly 15% of the total, as of the 2020 Proxy statement).
It is unclear whether Jassy’s compensation will change after becoming CEO.
The succession plan
CNN’s Poppy Harlow asked him about his CEO ambitions in an interview for a 2019 documentary about Amazon’s history.
At the time, Jassy said he didn’t expect Bezos to leave his position in the near future.
“I feel very fortunate that Jeff is not going anywhere anytime soon, and none of us want him to. He’s just such an unusual leader and so much part of the culture that I think he’s going to be here for a very long time.”
While he was coy about his plans — telling Harlow, “It’s kind of hard to imagine life without Jeff running the company” — analysts say Bezos has been planning for the transition for years.
Yale’s Sonnenfeld, who authored a book on CEO transitions called “The Hero’s Farewell,” recalled a conversation with Bezos at a tech conference about seven years ago during which the Amazon chief said he’d studied the Bill Gates-Steve Ballmer transition process.
“This has been his plan,” Sonnenfeld said of Bezos. “He wanted to pass this thing on as a healthy business, and this is the ideal time to do it.”