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Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

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Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#61

Post by biot »

delinka wrote: post #49
rayiner wrote: post #41

Earlier quoted context omitted.

Without the line workers, there is no product. Without a CEO there is no product. They're both but-for causes (in the legal sense), and in that sense equally indispensable. What you need is a sensitivity analysis, of profitability of the company versus changes in CEO versus line worker performance. I'd imagine you'd find that a 20% efficiency jump in the line workers would have a much bigger change on the bottom line…

CEO takes two weeks off. What happens to the company? 10,000 "low-level" employees take two weeks off (all at once.) What happens to the company? Companies operate without CEOs while boards seek candidates. Companies can't produce product while it seeks 10,000 replacement workers. As long as we have the chief executive on one hand and the workers on the other, that is.

If you permanently eliminate the position for one line worker, there is essentially zero impact to the company; it continues along with only a 0.01% drop of efficiency. If you permanently eliminate the CEO position, there is multiple orders of magnitude greater impact to the company. That's why the compensation for each role is different.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#62

Post by rayiner »

johngalt wrote: post #57
rayiner wrote: post #41

Earlier quoted context omitted.

Without the line workers, there is no product. Without a CEO there is no product. They're both but-for causes (in the legal sense), and in that sense equally indispensable. What you need is a sensitivity analysis, of profitability of the company versus changes in CEO versus line worker performance. I'd imagine you'd find that a 20% efficiency jump in the line workers would have a much bigger change on the bottom line…

You're comparing two things which are the same. A 20% jump in efficiency per worker is precisely what CEO's are there to create.

You're missing a level of indirection.

Say you have a median CEO and median line workers. If you got a CEO 20% better than the median, would he be able to motivate the line workers to be 20% more efficient? Highly unlikely. I think you need a 10x median CEO to see something as huge as a 20% jump in the efficiency of line workers.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#63

Post by marekmroz »

johngalt wrote: post #57
rayiner wrote: post #41

Earlier quoted context omitted.

Without the line workers, there is no product. Without a CEO there is no product. They're both but-for causes (in the legal sense), and in that sense equally indispensable. What you need is a sensitivity analysis, of profitability of the company versus changes in CEO versus line worker performance. I'd imagine you'd find that a 20% efficiency jump in the line workers would have a much bigger change on the bottom line…

You're comparing two things which are the same. A 20% jump in efficiency per worker is precisely what CEO's are there to create.

...oftentimes by applying the "beatings will continue until morale improves" philosophy of firing teams, cutting departments, slashing r&d and expecting unpaid overtime. There, efficiency *= 1.20.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#64

Post by harryh »

zobzu wrote: post #50
rayiner wrote: post #25

Earlier quoted context omitted.

Why? Here in the US we have a cultural flaw where we irrationally conflate equilibria in the supply/demand of labor with distribution of credit for a company's success. The CEO gets paid a lot more because there is a much smaller supply of people who have the pedigree/qualifications to be CEO than to be a line worker. There is no chain of logic that can take you from there to the conclusion that he's more important t…

I think that's incorrect. It's not like if being a CEO was harder that many technical jobs. In fact, it's usually a whole lot easier. It is however about the amount, you're right on that. There is 1 CEO and there are 10 000 employees. It's much easier to pay 1 CEO "a lot" than 10 000 employes "a lot". (and to become CEO you have to look good/smart/etc but you don't have to be or work hard . You can however stab peopl…

Being a CEO is way way way way way way way harder than individual contributor technical jobs. The breadth of skill and degree of dedication required to do the job well is just insane.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#65

Post by adestefan »

woobles wrote: post #32

One of my old bosses thought that all Lenovos possessed BIOS-level malware that could be activated at a moment's notice by the Chinese government should the US ever got to war with them. He was a weird dude.

I had a boss that thought the same thing. He shut up when we showed him an IBM branded ThinkPad with a "Made in China" sticker, but the new Lenovo branded ThinkPad had a "Made in Singapore" sticker.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#66

Post by unreal37 »

famousactress wrote: post #33

Cynical wondering: Is this real, or a clever way to package company-wide bonuses for PR? Seems like if your company just had a great year and you wanted to boost morale with 300$ bonuses, this is a way to do it and maximize press and positive attention in the process.

I worked at a smaller company (100 people in the local office) where the executives gave out a one-time $3,000 bonus per person (~ $300,000 total I figure) that came out of the bonuses they got from head office. They took a portion of their bonus and gave it to us. Not sure how much they got above that, but $300,000 is not chump change.

Same concept as the Lenovo situation. I'm a cynic about many things, but I do believe that they could have kept the money if they wanted but decided to split it among the team. Earned my respect.

I think this kind of thing builds internal loyalty way more than the external PR aspects.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#67

Post by wtvanhest »

juststef wrote: post #60
wtvanhest wrote: post #7

Earlier quoted context omitted.

They should have been zero for him and an increase of $314 USD in revenue per employee.

No, not at all. At least not if this were in the US (or he was a US citizen). I'm not sure what the tax system is like in Taiwan. If this were the US, he'd still have to pay income tax on the $3 million he received for payment for services, and he'd essentially gift the money over to the 10K employees. Your allowed to give each individual 13K (last time I checked) in gifts each year—but there's a lifetime limit to wa…

I don't know Taiwan's tax laws either, but assuming they are similar to the US it is highly unlikely he structured the transaction that way. It is much more likely that before receiving the money he renegotiated a contract for the period and then had the company distribute the gain to employees rather than himself.

That should result in zero tax liability for him.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#68

Post by wtvanhest »

dsr_ wrote: post #36
wtvanhest wrote: post #7

Earlier quoted context omitted.

They should have been zero for him and an increase of $314 USD in revenue per employee.

Not necessarily. I don't know the tax code in Taiwan at all. In the US, he might have received the $3 million, paid income tax on it, and then gifted it to each employee, who would not have to pay tax on it. Or he could have asked the Board of Directors to not pay him the money at all, in which case he would not pay taxes on it, but each recipient would have to count it as income for tax purposes.

There is no reason he would have actually taken the $3m, then redistributed it. Sure, you can make that assumption but it is the least likely event happening possible.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#69

Post by unreal37 »

prayag wrote: post #5

Wow! All the praises aside (which Mr. Yuanqing deserves), it's interesting to see because he has ensured the loyalty of his employees to himself and to the company. It's not just a good personal move but an awesome business move too.

This is about loyalty, definitely. Good luck to the board of Lenovo when they decide to fire the CEO - he's got considerable admiration from the front line workers.

Re: Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees

#70

Post by wtvanhest »

brazzy wrote: post #43
HeyLaughingBoy wrote: post #35

Earlier quoted context omitted.

Now there's a backhanded compliment! Dude, it doesn't matter how rich he is. He gave away his own money to the people who are making him rich as a gesture of thanks and goodwill. WTF would you find anything to belittle that?

Let's put it like this: it deserves some praise, but not as much praise as someone donating a kidney, wouldn't you agree? Yet this is newsworthy and earns praise from all over the world, while people who actually do donate a kidney barely make it into local news, if at all.

I'm pretty sure Kidneys sell for less than $3m on the black market.
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