Amazon’s board has approved the company’s first stock split in more than two decades.
Subject to shareholder approval, the 20-for-1 split would revalue Amazon’s individual shares, aiming to make them more affordable for individual investors, recognizing the long-term increase in the company’s share price.
The change will take effect in June if shareholders approve the split at the company’s annual meeting in May.
Amazon’s board also authorized a buyback of up to $10 billion of its common stock. The new authorization replaces a prior $5 billion buyback plan, approved in 2016. Amazon bought back $2.12 billion of its shares under that prior plan.
The company has split its stock three times before, all of them in the late 1990s, prior to the dot-com bust: a 2-for-1 split in June 1998; a 3-for-1 split in January 1999; and a 2-for-1 split in September 1999.
Amazon’s share price has risen from $62.44 after the last split to close at $2,785.58 on Wednesday.
The announcement follows a similar move by Google parent company Alphabet, announced in February.
“This split would give our employees more flexibility in how they manage their equity in Amazon and make the share price more accessible for people looking to invest in the company,” a spokesperson said in a statement.
Amazon offers restricted stock units as part of its standard pay package for corporate and tech employees. In February, Amazon announced an increase in maximum base pay to $350,000, from $160,000 previously, as part of an overall increase in total compensation intended to help recruit top talent and retain existing employees.
More details from an Amazon SEC filing: “Subject to shareholder approval of the Amendment, each Company shareholder of record at the close of business on May 27, 2022 will have 19 additional shares for every one share held as of such date reflected in their accounts on or about June 3, 2022. Trading is expected to begin on a split-adjusted basis on June 6, 2022.”
