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Amazon Shareholders Claim Bezos Needs a Boss

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By Published On: May 31, 20180 Comments

Consumer group, SumOfUs have submitted a shareholder resolution to Amazon on behalf of shareholders, saying the online marketplace’s CEO and Chair of the Board, Jeff Bezos, needs a boss.

Bezos currently serves as both Amazon’s CEO and its chairman, but according to shareholders, having one person filling both of these roles could be detrimental to share prices.

“We believe the combination of these two roles in a single person weakens a corporation’s governance, which can harm shareholder value,” the Shareholder Resolution reads.

“As Intel’s former Chair Andrew Grove stated, “The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee? If he’s an employee, he needs a boss, and that boss is the board. The chairman runs the board. How can the CEO be his own boss?”

According to the release, Amazon would be better served by an independent board chair who could oversee executives and set a “pro-shareholder” agenda that doesn’t have any of the “conflicts that exist when a CEO or other executive serves as the chairman”.

The consumer group believes a clear separation between the roles of CEO and chairman at Amazon could help the company’s financial position amidst claims Amazon mistreats employees and the communities it operates in. SumOfUs believes Bezos relinquishing one of his roles would help “mitigate these business risks”.

This isn’t the first time the consumer group has targeted Amazon. Earlier this year, the business also started a petition to force the e-commerce giant to stop streaming on NRATV through its Prime video service, after a school shooting in Parkland, Florida.

According to the organisation, NRATV “spreads fake news and conspiracy theories online”, as the US gun lobby’s main communication channel.

The group has also called for Mark Zuckerberg to step down from his role as the CEO of Facebook in light of the Cambridge Analytica scandal, claiming he “has continuously refused to take responsibility for some of the company’s worst offences”.

According to the Shareholder’s Resolution, independent leadership would result in “improved policies and practices”, with SumOfUs urging shareholders to vote for the proposal.

This petition comes only a month after Amazon reported total sales of $51 billion for Q1, a 43 percent growth in overall sales for the three-month period. Forward year growth is also expected to be strong, as the online marketplace also announced an increase in the price of its global Amazon Prime membership from US$99 to US$119 by the end of May.

Amazon is expecting second-quarter net sales 34 to 42 percent higher than net sales in the corresponding quarter in 2017, inclusive of an estimated $1.2 billion increase from favourable foreign exchange rates.

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