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I froze the salaries of my executive team to benefit other workers

theguardian.com

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Re: I froze the salaries of my executive team to benefit other workers

#121

Post by c0vfefe »

SketchySeaBeast wrote: post #99
14 wrote: post #91

Earlier quoted context omitted.

I am guessing they don’t expect loyalty but rather desperation and the need to pay bills. Use the person until they move on and get a new one. I make about 9$ an hour above minimum wage and I can not even fathom how a person on minimum wage survives.

That may be the pragmatic assumption, but I've worked my fair share of low paying jobs, and there's a ton of talk of being part of the team.

There's a difference between what leadership will say publicly & what they really mean. Reading between the lines of retail manager's inspiring speeches will reveal that their personal careers are directly affected by the store's bottom line, and they're certainly not going to explicitly acknowledge their employees' desperation as a motivational tool.

Re: I froze the salaries of my executive team to benefit other workers

#122

Post by bluGill »

justaguyhere wrote: post #61
HeWhoLurksLate wrote: post #54

Earlier quoted context omitted.

Putting so many laws into place about how much you have to pay workers / etc. makes it harder for small companies to even start. To me, seeing a company pay its workers more voluntarily is the best option, and also one I wish more companies would go with.

Have you noticed the behavior of markets, especially big companies? The only things they seem to be doing voluntarily are those that help increase their profits. CEOs are getting paid tens of millions of dollars while laying off thousands of people and closing factories. Companies do every dirty little trick to avoid paying for healthcare/pension. And so on. We have already tried the "markets will fix things, markets…

A company cleaning up their own spill isn't news worthy and so you never hear about it.

When I started here the first thing they sent me to a mandatory class: 2 hours to say (in different ways) "All the drains outside go directly to the river, so if you see a chemical going towards a drain you are to find the cover near to the drain (a sticker) and block that drain, then call maintenance to figure out what it is".

The above happens several times a year, and you never hear of it because we clean up our own mess. (almost all the mess is the brake line on a delivery truck breaking)

Re: I froze the salaries of my executive team to benefit other workers

#123

Post by Kalium »

mercer wrote: post #82
Kalium wrote: post #74

Earlier quoted context omitted.

> I wonder if you could apply this to the rest of American society... At very large-scale companies, it doesn't always work as well as coud be hoped. A company ten times the size of this company may not have ten times as many extremely-highly-paid executives, but it probably has ten times as many people further down the pyramid. For example, the CEO of United Airlines is compensated $18 million-ish. There are 88,000…

What if you were to add up the income of not just the CEO, but all high level management or, say, those who make more than 500.000 a year? Honest question that I'm not sure how to answer myself, but I suspect the benefit to the lower ranks would be much more than the $200 a year.

That's an excellent question! Let's see if we can address it with some math.

I'll start with this: http://ir.united.com/corporate-governance/company-leadership

This says there are 24 executives at United (I counted). If you assume literally every single one of them is paid as much as the CEO is and redistribute all that money across the whole of United, then that's 24 * $200 = $4800. $200 was rouding a bit ($207 is ungainly to work with), so it's actually closer to $5000.

Now, $5000 a year isn't nothing. It's undoubtedly and unquestionably a life-changing amount of money for a lot of people struggling to get by on manifestly unreasonable and unfair minimum wages.

That said, $5k is also far short of the $14k number above. And we had to make several unreasonable assumptions to get here.

Realistically, the policy proposed here is freezing salaries and re-directing raises among executives. Most compensation would be unaffected. Further, not every executive will be paid as well as the CEO. Assuming generous 10% yearly raises and that other executives are paid around half of what the CEO is, you get a result that looks like $5000 / 2 = 2500 * 0.1 = $250 / yr.

Which isn't far from the initial result. (And still includes some unreasonable assumptions)

Re: I froze the salaries of my executive team to benefit other workers

#124

Post by systemtest »

CalRobert wrote: post #87
systemtest wrote: post #60

Earlier quoted context omitted.

Most Americans have smartphones worth about as much as a monthly salary in Europeans countries. Should people feel embarrassment about that?

I think most Americans have phones that are used, and not Apple, and not flagship. Europe is pretty divers so I don't know if you mean Greece ~€1000 or Norway ~€4000 but it still seems like a stretch https://en.wikipedia.org/wiki/List_of_European_countries_by_... When I lived in the US I thought more Europeans lived in gorgeous architecture and had excellent public transport. Living in Europe, I find a lot of people…

There are twelve countries in the European Union with an average net income of less than 1000 euro. The two poorest ones (Romania & Bulgaria) are at 515 euro and 406 euro. So it's not that of a stretch that Americans have phones worth more than a European monthly wage.

Re: I froze the salaries of my executive team to benefit other workers

#125

Post by c0vfefe »

maxxxxx wrote: post #63
turk73 wrote: post #55

Earlier quoted context omitted.

I'm not quite where you are wealth-wise but definitely I have had that moment several times recently where I am re-evaluating hiring out work I would have just done myself in the past. I didn't have some big windfall, but pretty much earned and saved my way to wealth. Now it is hard to not do things like fix my own cars as well as bring my own lunch. I do them out of habit now. That's the discipline. Anyways, you don…

“t makes no sense to me why the CEO and higher ups of the company I work at still work there. ” My theory is that they simply like their work and get satisfaction from it. They get paid a lot but they also work a lot and I can’t imagine anybody doing this to themselves if they didn’t genuinely like it.

There is such thing as ambition, and a desire for more power/money than you need. The human condition!

Re: I froze the salaries of my executive team to benefit other workers

#126

Post by lotsofpulp »

toss1 wrote: post #111
lotsofpulp wrote: post #102

Earlier quoted context omitted.

Supposes employer A chooses to pay their employees more than other employers. Employer B chooses to pay their employees less. Both employers are selling products or services that the purchaser finds the same, i.e. they have no preference for who they buy it from. Employer B takes the money they save by paying employees less, and invests in newer, better facilities or R&D or whatever. Now employer B is selling a bette…

True, but Employer-B now has employees who DGAF about anything in the business, and often have an adversarial, even 'eff them! attitude to the business. Employer-B's customer service and general care of its facilities & inventory will suck, and they will have much higher turnover costs, even if they have better products. So, what is the relative advantage? Moreover, the article was specifically about the tradeoff in…

There’s a reason Walmart and Dollar General are crushing others, and it’s because either their customers can’t afford good customer service or they don’t care for it and choose to shop there anyway. The proof is literally the fact that mom and pop stores and others like Sears went out of business, customers preferred saving $5 over good customer service.

As I prefaced above, this is true for business where customers aren’t differentiating between vendors except on price.

Re: I froze the salaries of my executive team to benefit other workers

#127

Post by rc_kas »

chmod775 wrote: post #2

Why does a company with only 500 regular employees even have 20 executives in the upper bracket? Are they just overpaid sales people? If the upper 5% at my company earned enough to double the wages of the other 95%, I'd be pretty damn mad about those leeches. Especially if the company is already struggling.

> If the upper 5% at my company earned enough to double the wages of the other 95%, I'd be pretty damn mad about those leeches.

I'm pretty sure every large company in America matches that criteria.

Re: I froze the salaries of my executive team to benefit other workers

#128

Post by saalweachter »

bluGill wrote: post #101
mercer wrote: post #82

Earlier quoted context omitted.

What if you were to add up the income of not just the CEO, but all high level management or, say, those who make more than 500.000 a year? Honest question that I'm not sure how to answer myself, but I suspect the benefit to the lower ranks would be much more than the $200 a year.

Still not much. I didn't bother to look it up (it probably isn't public), but doubt more than 10 people at United make more than $500,000/year, so the amount isn't significant. Now if you said $200,000/year I would expect a significant amount of people make that. However now you are getting into the middle class where lifestyles have expanded to spend most of that money, and they would feel the pinch.

The latest SEC filing does not include executive compensation, having disclosed it at the latest shareholder meeting.

The 2015 SEC filing includes 8 named individuals in its executive compensation program. In 2015, they received between $500,000 and $1.25M in base salary, and between $1 million and $10.7M in long-term incentives. In addition, they received between 110% and 150% of their base salary in annual incentives (bonuses). Two of them received additional monthly cash payments of $100,000 and $40,000 for temporary duties in addition to their normal post.

Granted, that's only the top 8 individuals at the company, but if the lowest-compensated individual among those 8 is taking home >$2M I'm fairly certain that there are a lot more than 10 making more than $500k.

It's also still the case that that pile of money is not much divided among 88,000 people, but you could still raise the income of the lowest-compensated 10k employees by several thousand dollars, or fund employee daycare, or something other than give it to a small group of people.

Re: I froze the salaries of my executive team to benefit other workers

#129

Post by c0vfefe »

saalweachter wrote: post #103
mercer wrote: post #82

Earlier quoted context omitted.

What if you were to add up the income of not just the CEO, but all high level management or, say, those who make more than 500.000 a year? Honest question that I'm not sure how to answer myself, but I suspect the benefit to the lower ranks would be much more than the $200 a year.

Or, if you take a company like Google, give every engineer a 5% haircut, bring the chefs and cleaning staff and groundkeepers and building maintenance back into the company (rather than contracting out), and distribute the money and stock grants among the support staff.

That'd cause a big morale hit & big incentive for engineers to leave. Support staff are great, but at the end of the day they're not what drives growth for the company.

Re: I froze the salaries of my executive team to benefit other workers

#130

Post by lotsofpulp »

SketchySeaBeast wrote: post #117
toss1 wrote: post #111

Earlier quoted context omitted.

True, but Employer-B now has employees who DGAF about anything in the business, and often have an adversarial, even 'eff them! attitude to the business. Employer-B's customer service and general care of its facilities & inventory will suck, and they will have much higher turnover costs, even if they have better products. So, what is the relative advantage? Moreover, the article was specifically about the tradeoff in…

For some reason in these scenarios the workers, who literally construct the product, are always framed as the adversary, and a sunk cost that needs to be avoided if at all possible. Workers are keeping the business from being as successful as it could be by being a monetary drain on the business instead of, in fact, being the business.

Labor costs are the biggest, if not one of the biggest costs for any employer, and it happens to be one the employer can sort of control.

Again, I’m not making anyone a hero or adversary, I’m just pointing out that some businesses can’t survive unless they compete on price, and that means lowering their own costs. It’s quite a blessing to be able to work in a high margin business.

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