What Did Amazon Do This Week?

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AMAZON BOARD REJECTS ALL 14 RESOLUTIONS

The annual shareholder meeting revealed a significant disconnect between its leadership and the concerns of its broader stakeholder community. Investors overwhelmingly rejected all 14 resolutions proposed by external parties, which included tiny(!) issues like climate impact, AI dev oversight, and corporate governance transparency. The wholesale dismissal, despite vocal advocacy from employees and activists, underscores Amazon's ruthless prioritisation of its internal agenda any actual accountability and transparency.

CEO Andy Jassy's insisted on reinvesting profits into the company rather than distributing dividends highlights Amazon's aggressive growth strategy and possible Temu and pals concern. Jassy's rationale is that this approach will enable Amazon to dominate key sectors such as retail and cloud computing, where the company believes there is still significant market share to capture. Fend off may be more likely. The strategy is in direct opposition to competitors like Meta and Alphabet, which have started paying dividends.

The refusal to increase transparency on environmental issues, such as disclosing Scope 3 emissions or reducing plastic usage, is particularly troubling. Amazon’s stance suggests a reluctance to fully engage with its environmental impact, despite its massive carbon footprint and the growing global emphasis on sustainability. The rejection could indicate a broader unwillingness to adopt more stringent environmental practices right when we need the company to push harder.

No surprises on workers’ rights and AI ethics, the big red ‘x’ over those could be seen coming a mile away. Jassy did say, “I am optimistic we'll be a leader here” but gave no timeline. The preference for maintaining control over these areas rather than being transparent and accountable is a commercial one. Both will exacerbate tensions with employees and attract regulatory scrutiny. Amazon will go to court, pay fines, and do what it can to avoid unions as they have done in the past.

SO WHAT?

For Amazon, the rejection of all 14 proposals signifies a tough stance to the outside world at a time when they could use a ‘we’re fluffy really’ win. While this strategy may drive short-term business success, it risks alienating investors and stakeholders who are increasingly valuing environmental, social, and governance (ESG) commitments. Whether or not more activist investors and stakeholders plot to disrupt is unclear right now.

Globally, Amazon's resistance to enhanced ESG disclosures could inspire others to follow suit. Expect criticism from environmentalists, regulators, and socially conscious investors, but ultimately there’s unlikely to be massive reputational damage initially although the move will increase regulatory pressures.

Competitors just got a sign that Amazon is a) focused and b) concerns about them. Reinvesting rather than distributing dividends likely will equal aggressive growth and innovation which will drain resources of competitors across multiple departments. Will investors jump ship? Time will tell. Perhaps the bigger issue will be how competitors react to Amazon’s moves - especially when it comes to the lucrative burgeoning AI market. One thing is certain, it’s not great optics and will cause problems down the line for Amazon.

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