Business

Amazon set aside more than €110m in share-based payments for Irish workers in 2023

Online retailer and technology company estimates it could have to make as much as €330 million in share payments to workers in the coming five years

Amazon’s Irish subsidiaries in Ireland paid out more than €600 million in salaries, pension costs and share based payments through its various companies last year. Photograph: Gareth Chaney

Barry J Whyte
Mon Jul 1 2024 - 00:01

Amazon set aside more than €110 million in share-based payments for Irish workers in 2023, and estimates it could have to make as much as €330 million in share payments to workers in the coming five years.

Fresh accounts for several of Amazon’s Irish subsidiaries in Ireland show that it paid out more than €600 million in salaries, pension costs and share based payments through its various companies last year.

The majority of Amazon’s workers are employed through its three biggest subsidiaries, Amazon Data Services Ireland Limited, Amazon Ireland Support Services Limited and Amazon Development Centre Ireland Limited.

Amazon Ireland Support Services Limited, for example, had 2,145 employees at the end of 2023. The company is involved in “the provision of customer services, logistics and other support services to group companies”.

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Accounts for the company showed that its total staff costs for the year were €136.1 million, up from €121.2 million the year before. Of that figure, €101.1 million was made up of wages and salaries, up from €89.2 million the year before.

The company also grants its employees restricted stock units (RSUs), effectively share-based bonuses that vest at no cost to the employee over the course of a set period of time.

During 2023, the company made €20.3 million in share based payments, a rise on the previous year’s figure of €19.1 million. While the company has registered the RSUs as an expense on its balance sheet, it notes that the employees could well forfeit the shares if they leave Amazon.

Amazon Ireland Support Services’s accounts also provided an estimate of how many RSUs it may have to award over the coming five years. At Amazon’s current share price of more than $190, the full value of those shares could be worth just over $58 million (€54 million).

Another Amazon subsidiary, Amazon Data Services Ireland Limited, which is involved in the operation of data centres, saw its total staff costs rise from €187.6 million to €216.2 million, with its basic level of wages and salaries rising from €136.6 million to €155.1 million.

Its staff also received payments in the form of RSUs, the value of which it calculated at €33.3 million in 2023, up from €30.8 million the year before, the accounts show.

[ Amazon raises doubt over ‘capacity to expand’ in Republic due to limits on data centres ]

Based on its calculation of how many RSUs it may have to pay out in the coming years, the full price tag based on Amazon’s current share price could be more than $105 million (€98 million).

A third company, Amazon Development Centre Ireland Limited, which is involved in the provision of contract research and development services to other Amazon subsidiaries, had 1,493 employees and a wage bill of €279.7 million.

Of that, basic salary and wages accounted for €195.2 million, while it recorded €57.2 million in share-based payments, up from €50.6 million the year before.

Based on its declared schedule for the vesting of outstanding RSUs, its total cost could be as high as $191 million (€180 million).

The accounts also show that the three companies all had increases in revenue, but also increases in their trading losses.

Turnover at Amazon Data Services Ireland, the data centre business, leapt from €4.8 billion to €6 billion, though a rise in costs meant that its pretax profit fell from €61.5 million to €15.1 million, and it ended the year with a loss after tax.

The company paid dividends totalling €600 million to its parent company, while it also received an unconditional capital contribution of €2.7 billion from Amazon EU Sarl.

Amazon Development Centre Ireland, the contract research business, had revenue of €263.9 million, up from €228.7 million the year before. It made a loss for the year of €33.3 million, up from €29.9 million the year before, which pushed its accumulated losses to €77 million.

Amazon Ireland Support Services, meanwhile, had a rise in turnover from €261.9 million to €298 million, and booked a pretax loss of €12.6 million. Its accumulated losses rose from €55.3 million to €69.1 million.

It also paid out substantial dividends during the year, totalling €602 million.

Earlier this year Amazon announced it would be cutting hundreds of jobs from various positions including sales, marketing and global services, though it wasn’t clear how many Irish jobs would be affected.

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