A few weeks ago, Jeff Bezos, owner of Amazon and richest man in the world, announced that he was “donating” 2 billion dollars to charity, specifically to help the homeless. That’s a Billion with a B. That is an immense amount of money that shouldn’t be taken lightly. Almost immediately after the announcement, however, people from all over jumped on him, saying that it was a publicity stunt, a smoke screen to hide Amazon’s poor treatment of employees, that the money would be better spent on improving the lives of Amazon employees, or that it was simply not enough money.
Now, I first heard that and thought, “How the hell is 2 billion not enough money? IT’S 2 BILLION DOLLARS!”, but after a second or two, I remembered that Jeff Bezos is the richest man in the world, who is worth, at the time of this writing, around 136 billion U.S. dollars. With that little piece of info, that 2 billion doesn’t seem so big anymore. This all got me thinking, could Bezos have given more? The answer to that question is, SPOILER, yes. He could have given more, but I wanted to find out how much more. That, as it turns out, was a much harder answer to find.
Before I start, I wanna say that I do believe that donating, no matter how big or small, is a great thing that should be celebrated. 2 billion dollars is a lot of money, and though it may not be the most that he could give, it is still an enormous amount that can change so many lives. According to this article from USA Today Bezos is using that money to set up a fund for the homeless that is run by Amazon. This makes me wonder why this couldn’t just be another part of Amazon, a company that makes far more than 2 billion every year, but what do I know? This is also clarifies that he didn’t just give 2 billion to charity. He allocated 2 billion dollars to himself, though, it is to do good things. So, this isn’t exactly a donation, but it is still a good thing. I do believe that the criticisms that people are giving Bezos are valid, but what he is doing is a good thing. Is it enough? Well, that’s what we’re trying to find out.
Another that needs to be pointed out is that the numbers I’m using are slightly outdated. When I did all of this research and math, it was February 28th, 2019. Bezos’ net worth at the time was 134.8 billion USD, and Amazon shares were worth 1,639.83 USD. We’re
Ok. With all of that out of the way, we can finally start to get to the point of the article: Could Bezos have given more, and how much more could it have been? In order to figure this out, we need to know how much money Bezos actually has. His net worth was 134.8 billion, but net worth is mostly bullshit. Net worth doesn’t tell us how much money the man actually has in the bank. How do we find that? Well, I wish I knew.
I first tracked down his annual income. According to Salary.com, Bezos makes an annual salary of 1.6 million dollars a year as CEO of Amazon. That’s a lot of money, but far from the 134.8 billion net worth. According to a Forbes article from 2013, Bezos sold 500 million USD worth of shares. Another article from Bloomberg in 2017 states that Bezos made sold 1.1 billion USD worth of shares, and says that he tries to sell a billion dollars worth of shares every year in order fund Amazon and other projects. From that, we have 1.6 billion USD. If give him a billion each for 2016 and 2018, the total comes out to 3.6 billion USD. I’m gonna round this to 4 billion, because Bezos has made many transactions since then, and most likely has way more than 4 billion anyway. It’s the most concrete number I can figure, at this time.
We now have number, sort of, of how much Bezos has in liquid capital. The number is probably a lot more than 4 billion USD, but that’s what I have for now. If this is the amount of money that he had in the bank when making his 2 billion dollar pledge, then that is a substantial amount. That’s 50 percent of his entire (estimated) savings. Now, while that seems like a lot, remember how he came into that money. He sold shares. He could easily do that again, and get all 2 billion back in less than a day. You know what that means, right? That means that we need to figure out how many shares Bezos actually has, and what’s the most he could make if he sold them.
Now, in order to do this, we have to figure out how many shares Bezos has. That answer is easy. As of 2-28-19, Bezos owned 78,814,200 shares of Amazon stock. He is the majority owner by a large margin. One might want to just liquidate all of his shares, and use that to see how much money he would have, but that’s not that simple. Bezos’s net worth was 134.8 billion USD, and most of that is due to his large stake in Amazon. That 134.8 billion number doesn’t concern me. I don’t care what he would have if he liquidated everything, in fact, I don’t want him to. I believe he should still have control of his company. In order to do that, we need to find out the number of shares he we need to keep in order to have majority ownership.
The second biggest holder of Amazon stock is a company called Van Guard Group. They owned, as 2-18-19, 30,528,310 shares of Amazon. Theoretically, Bezos would only need a single share more than that in order to keep control, but it would be really easy for Van Guard Group to buy more and gain control. I decided that 40 million shares would gives Bezos a good enough cushion to keep the majority, and protect from a take over. To get to 40 million, Bezos
Ok, in order to get down to 40 million shares, Bezos would need to sell 38,814,200 shares of stock. At 1,639.83 USD a share, that comes out to 63,648,689,586 USD. That’s nearly 64 billion USD! Add the 4 billion we figured from earlier, and that’s 67,648,689,586 USD. That’s a lot of money. With that number, the 2 billion set aside for charity seems very small, though it is just below 3 percent. Why is that important? Well, it is estimated that the average person gives 3-5 percent of their income to charity, so, at this point, he’s just slightly below the average, but we’re not done yet.We
Before we can get a good percentage of how much of his income/savings he gave to charity, we first have to figure TAXES! Ah yes, good ole taxes. For this, we are going to have him as married but filling separately, consider this all as income, and use no tax loop holes. Basically, we’re gonna do the exact opposite of what a billionaire would do. So, Bezos claims residency in Washington, so there is no state income tax. That saves some math. Everything we’re going to figure is federal. In federal income tax, he would have to pay 25,029,979,702.82 USD, Social Security Tax would be 8,239.80 USD, and Medicare Tax would be 1,589,743,080.27 USD. That’s 26,619,731,022.89 USD in total. That blows his 2 billion donation out of the water. Now, 2 billion on top of all of that would be pretty awesome, but since most of this money is in stocks and/or not considered income, it’s not taxed. Seems to me that Bezos could do more by just paying taxes, but I digress. After taxes, Bezos would be left with 41,028,958,563.11 USD. Still a lot of freaking money. If you take 2 billion out of that, that’s around 4.8 percent of his income, which is in line with the national average.
So, after all of that, we still find that his so called “donation” is in line with the national average. It’s good to note, however, that the national average is not a moral guideline. If anything, it shows that his donation isn’t really that special. In reality, his donation is less special. Donations are good thing, a great thing even, but if you want praise, then you have to go above and beyond. He didn’t. Even if you liquidate most of his assets and tax the crap out of them, it’s still just average. He didn’t liquidate these assets, nor did he pay billions of dollars in taxes that would benefit the country. Crap, he technically didn’t donate anything. It’s just a pledge. A pledge he made to himself.
Charity is a good thing. Helping the poor and the needy is a good thing, but the more I look at these numbers, the sadder I become. I hope that this venture is fruitful and helps countless people get out of poverty, but it’s hard to look at these numbers and not be cynical. To answer the question, “Could Bezos Have Given More?”, the answer is yes. So much more, but not just to charity but to the country as well. He could do all of this, then donate half of his fortune, and still be richer than most people will ever be, but he hasn’t. At most, he’s done the bare minimum, and at the least, he’s given just a sample of what he should owe the country.