Inside Amazon’s Transfer of Power

Only Amazon could upstage its own earnings announcement with a bombshell about the future of the company. But that's what happened Tuesday when the platform’s Q4 results were overshadowed by news of Jeff Bezos stepping down as CEO this summer. Bezos will assume the role of executive chair in the third quarter while Andrew Jassy, a 24-year Amazon veteran currently serving as CEO of cloud platform Amazon Web Services (AWS), will become Amazon CEO. It’s not clear who will take the helm at AWS. On the Q4 earnings call, Amazon CFO Brian Olsavsky said the executive transition demonstrates Amazon’s “highly effective succession planning,” as well as its penchant for executive development, which has yielded “a lot of bench strength within Amazon.” The platform implemented a multi-CEO structure in 2016 with Jeff Wilke serving as CEO of Amazon’s consumer business and Jassy as CEO of AWS. “[Jassy] is not only a visionary leader, he's a strong operator … and he's got a great track record of developing multiple things and businesses within Amazon, not the least of which is AWS, which is arguably the most profitable, important technology company in the world,” Olsavsky said. Wilke recently retired after more than 20 years at Amazon. Dave Clark, who was previously svp of worldwide operations, is taking over as the head of Amazon’s consumer business. Per Olsavsky, Clark has been responsible for expanding Amazon’s fulfillment network, transportation capacity and grocery delivery. But, Olsavsky stressed, Bezos is not leaving Amazon—he’s simply taking a new role and will remain actively involved. “He will be involved in many large, one-way door issues,” Olsavsky said. “As we say, one-way doors—meaning, the more important decisions. Things like acquisitions, things like strategies and going into grocery and other things. So Jeff's always been involved with that and that's where he'll keep his time focused in his new role.” Sucharita Kodali, vp and principal analyst at Forrester, was still surprised by the announcement. The modern conglomerate has only ever had one CEO. Amazon is synonymous with Bezos, who is also founder, president and chairman of the board. “Bezos is still relatively young for a CEO, and I do wonder if the pressure of the government investigations, which a PR team cannot change, played a role in this decision at this time,” she said. Kodali also questioned what the change will mean for the retail industry. “The new CEO is someone who is responsible for and is the father of the AWS business for all intents and purposes. Does this mean that it’s full steam ahead for cloud and advertising, while retail is more of a ‘maintenance,’ not growth, business?” she pondered. “It could actually be really good news for retail, but we won’t know the answer to that for months, if not years.” Peter Hanks, an analyst at DailyFX, also noted it will be quite some time before these changes impact Amazon's share price in a material way. “Immediate changes are hard to identify, especially as outsiders. But a modest gain in Amazon shares in the immediate aftermath of the announcement might suggest shareholders are pleased with the next CEO,” he added.