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CEOs are a well-compensated bunch. Even the ones who run their companies into the ground get paid megamillions a year.

Go to, click on the insiders tab and, voila, you're at executive compensation. Then spend the next few hours retching. Check out gems such as Aubrey McClendon's 2008 $112 million package at Chesapeake (CHK) (his 2007 through 2011 compensation didn't fall below $17 million). Nokia's (NOK) Stephen Elop made $7.9 million even as his company's shares dropped 48% over the last year. Why, even companies near bankruptcy pay the head guy a million or more a year to push the firm into, well, the head.

That's why it's a mind blower to see a CEO of a Fortune 500 company getting a five-figure base salary. No raise in 24 years. No options. No stock vestments.

Maybe you've heard of him: Jeff Bezos, Amazon's (AMZN) founder and CEO. His pay? $81,840 a year. For his directorship and chairman position? Zero dollars. According to the SEC documents, he does receive $1.6 million a year for travel and security. I don't doubt that's what it costs for bodyguards and surveillance.

I think shareholders get a pretty good deal, especially considering the average Fortune 500 CEO makes $10 million a year. Only John Mackey of Whole Foods (WFM) makes less.

Now, don't feel sorry for Jeff. He holds over 19% of Amazon's stock, currently valued over $22 billion, making him one of the richest men in the world.

Bezos' interests are aligned with shareholders. The stock tanks, he tanks. His pay is reminiscent of Steve Jobs, who famously received $1 a year (but owned billions in stock). You can draw easy parallels between Jobs and Bezos. Amazon is Bezos' baby, just like Apple was Jobs'. Bezos, like Jobs, is building a legacy. It's not about the money.

Amazon's Whole Executive Team Is Compensated to Make the Stock Go Higher

If Bezos will work on the cheap, what about the rest of the executive team? The pay scale is from the 1950s. The CFO makes $163,000 a year. SVP of International: $175,000 a year. SVP of Consumer Business: $165,000.

Why would any exec stay on for pittance pay? The hefty stock awards Amazon hands out. For instance, the CFO and those two senior VPs each got over 6 million shares in 2010.

While Bezos and his executive board get salaries that are a twentieth of those given at comparable companies, Bezos' stock holdings are enormous and his team receives gigantic stock awards. Management's interests are unlikely to diverge from shareholders. It truly is pay for performance. How management is compensated makes a difference.

For instance, Amazon has sacrificed earnings in order to pursue top-line growth. This executive pay alignment with shareholders confirms that management is invested in making the company profitable over the long term.

As per Joel Greenblatt's thoughts about management:

If they're getting big salaries and they don't own much stock, I figure their interests aren't aligned with mine. So, I try to stick to situations where management has a very big incentive to get the stock up.

If you want a stock where management wants the stock to go higher just like you do, look at Amazon. Management's interests are aligned with those of investors. So far, it's worked out for both the executive board and shareholders: Amazon is up 50% year to date, up 1,400% over the last 10 years.

Amazon's executive compensation: One more reason to own the stock.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

Source: Amazon's Management Alignment With Investors: Another Reason To Own The Stock