July 28, 2021

How Jeff Bezos, the richest man in the world, really makes a living

The Amazon boss has sold $ 27 billion in Amazon stock since its inception, which is his main source of income.

How does boss Jeff Bezos live? The question may seem absurd when we know that the heritage of the founder and soon ex-CEO of Amazon reaches 200 billion dollars.

And yet if Jeff Bezos is immensely rich, his fortune is mainly intangible. His $ 200 billion doesn’t sit in a bank account but is made up of shares in his Amazon company. But when he buys a property or a yacht, it is not in Amazon shares that he pays, but in dollars.

In fact, the boss of Amazon only receives a minimal salary compared to his fortune. He receives as CEO of the e-commerce giant $ 81,000 per year (67,800 euros), a senior executive salary, but nothing extravagant. Amazon also pays him $ 1.6 million a year, but that is to ensure his safety.

Jeff Bezos who is the main shareholder of Amazon could receive part of the profits of his company. But that’s not the case either. The company does not pay dividends to its shareholders.

The billionaire lives by selling shares in his company. And he gives in a lot. According to the calculations of Forbes, Jeff Bezos has sold $ 27 billion in shares of his company since it went public in 1997. Over the past 23 years, the billionaire has sold shares almost every year with the exception of 2005, 2006, 2007 and 2011. This also explains why he did not pay federal tax in 2007 and 2011, as the site revealed in early June. ProPublica.

And with the soaring share price, the amounts obtained by Jeff Bezos have grown strongly over the years. The company’s share price has climbed 3000% since 2008.

$ 6 billion in taxes

Thus if in 1998 the sale of the shares had brought in 46 million dollars to the founder of Amazon, in 2016 the sale of 6 million shares had enabled him to touch 793 million dollars. The record for earnings was reached last year. By selling 4 million shares in 2020, he made a colossal sum of $ 10 billion before taxes.

Over the years, Jeff Bezos’ personal participation in the capital of the company has sharply decreased. The founder who owned 42% of the shares in 1997 at the time of the IPO now only owns 10% of the capital of the company valued at 1.740 billion dollars. However, it was following his divorce from MacKenzie Scott that his participation fell most sharply. The billionaire transferred 19.7 million shares to him, or 25% of what he initially owned.

While Amazon is regularly pinned down for its tax evasion practices, Jeff Bezos personally pays taxes on its earnings. Forbes estimates that the billionaire paid $ 6 billion in federal capital taxes for a gain of $ 27 billion. Provided that he has not offset his gains by losses on other investments. ProPublica estimates that the billionaire paid 973 million federal taxes between 2014 and 2018. Over the period, he raked in $ 4 billion in resale of shares.

The billionaire has also made acquisitions (real estate, the daily Washington Post …), invested in start-ups (his space company BlueOrigin …) and started a philanthropic activity late. In total, it is $ 14 billion that would have been spent by Jeff Bezos with the resale of his shares. It would therefore have about $ 13 billion in liquidity in addition to its 200 billion Amazon shares and various investments.