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Originally published April 10, 2014 at 12:47 PM | Page modified April 10, 2014 at 4:19 PM

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Bezos’ shareholder letter promises more investment in also discloses stock holdings of top executives, including Bezos’ nearly $27 billion stake in the company.

Seattle Times business reporter


Some shareholders may have been excited about the company’s decision to increase the membership fee in its Prime two-day shipping service last month, a move that could boost margins. That seemed notable for a company that has rarely emphasized profit.

But Amazon Chief Executive Jeff Bezos made plain in his annual shareholders letter Thursday that the company has no plans to slow its investments in new business. Bezos listed 21 corporate initiatives — everything from grocery delivery to business application services — where Amazon is spending money to expand operations.

Bezos underscored the long-term nature of the company’s efforts, telling shareholders that the big bets the company is making will sometimes fail.

“Failure comes part and parcel with invention. It’s not optional,” Bezos wrote. “We understand that and believe in failing early and iterating until we get it right.”

Amazon also released its annual proxy statement to shareholders Thursday, announcing its annual meeting on May 21. In the proxy, the company disclosed that none of the top five officers of the company received stock awards last year, when the stock climbed nearly 56 percent.

Their salaries ranged from $81,840 for Bezos to $175,000 for Senior Vice President Diego Piacentini, who runs Amazon’s international operations. Bezos also received $1.6 million in “security arrangements” and Piacentini was paid $55,905 in cost-of-living and housing allowances, as well as tax reimbursement for those benefits.

All five top executives also are sitting on large chunks of Amazon stock, and four of the five, excluding Bezos, took home giant stock awards in 2012. Bezos owns 18.3 percent of Amazon’s outstanding shares, worth $26.9 billion at current prices. According to the proxy, the value of other top officers’ holdings ranged from $37.8 million to $54.4 million, at the end of last year.

Bezos’ shareholder letter didn’t offer much in the way of new details about Amazon’s initiatives. But he listed highlights from the past fiscal year to illustrate the breadth of Amazon’s ambition.

• Amazon Fresh, the grocery service the company started in Seattle five years ago, last year pushed into Los Angeles and San Francisco, where the company is experimenting to figure out if the service can be economically viable elsewhere.

“We’ll continue our methodical approach — measuring and refining Amazon Fresh — with the goal of bringing this incredible service to more cities over time,” Bezos wrote.

• Amazon also has been rapidly adding new warehouses, to be closer to consumers and cut shipping times. Bezos wrote that Amazon now has 96 warehouses. He also noted that Amazon updated the software that runs the warehouses 280 times last year.

• And Bezos talked up the drone-delivery program he revealed on CBS’s “60 Minutes” last December. Competitors mocked it. And many questioned the viability of shipping packages via unmanned drone aircraft. But Bezos said the company continues to work on the technology.

“The Prime Air team is already flight testing our 5th and 6th generation aerial vehicles, and we are in the design phase on generations 7 and 8,” Bezos wrote.

• Bezos also highlighted Amazon’s Seattle expansion, where the company added 420,000 square feet to its headquarters and broke ground on four city blocks’ worth of new construction. He wrote that urban development, which includes investments in bike lanes, may be most costly; but it’s also more environmentally friendly.

“Though I can’t prove it, I also believe an urban headquarters will help keep Amazon vibrant, attract the right talent and be great for the health and well-being of our employees and the city of Seattle,” Bezos wrote.

Jay Greene: 206-464-2231 or Twitter: iamjaygreene

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