Amazon Partners with Online Lender to Allow Employees to Use Stock Awards for Home Loans

Amazon (NASDAQ: AMZN) employees will soon have the option of using their company shares as collateral to buy homes, thanks to a new product, Equity Unlocker, from online mortgage lender Better.com. With its stock stuck in an extended slump, the e-commerce giant is forced to find ways to add value to its stock-heavy compensation packages.

With Equity Unlocker, employees who choose to pledge stock for mortgages will find themselves paying 0.25 to 2.5 percentage points more than the market rate. This is so Better.com can offset the value of the stock price as it drops.

READ: Bezos Vows To Give Away Much of His Fortune While Amazon Plans To Cut 10,000 Employees

However, according to the Wall Street Journal, Better.com CEO Vishal Garg says that Amazon corporate employees’ loans would be protected if the stock price falls, unlike stock-based loans that carry the risk of margin calls, requiring borrowers to top up collateral or sell assets to shrink debt.

Equity Unlocker is akin to the securities-backed loans that banks offer their high-net-worth clients, a high-risk service as the value of the assets can drop sharply, especially in the current climate. 

Much of the compensation that the e-commerce giant gives its corporate employees is in restricted stock units, and thus the extended slump — the stock price has fallen over 37% in the past year — is pushing pay packages down by 15% to 50% compared to projections the company gave the employees, according to people familiar with the matter.

READ: Amazon Prepares to Cut 18,000 Jobs as E-Commerce Demand Wanes

Instead of selling their stock while values are low, Amazon’s arrangement with Better.com allows corporate employees to hold them and wait it out until values recover, while still being able to take out a mortgage for a home.

Equity Unlocker will also be available to laid-off employees who still hold restricted stock units. It launches on Tuesday in Florida, New York, and Washington.


Information for this briefing was found via the Wall Street Journal, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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