Lenovo CEO Gives His $3 Million Bonus to 10,000 Employees • Hacker News Board

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

#71

Post by sirclueless » Fri, Jul 20, 2012, 7:51 PM UTC

rayiner wrote: post #41

brazzy wrote: post #37

Earlier quoted context omitted.

I'd say it's exactly the other way round: the CEO definitely has to make decisions that impact the company far more than what 10,000 line workers do, for better or for worse. The open question is whether the commonly used pedigree/qualifications that decide who gets to be CEO actually enable people to make substantially better decisions.

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…

But think of the labor costs. Can you get a 20% better CEO with 3 million dollars? Probably. Can you get 10,000 line workers 20% better with 3 million dollars? Probably not. So even if the line workers are more important, a large CEO bonus may provide better value.

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

#72

Post by _delirium » Fri, Jul 20, 2012, 7:51 PM UTC

harryh wrote: post #64

zobzu wrote: post #50

Earlier quoted context omitted.

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.

That may be, but there's actually little evidence that compensation relates to it. There are all sorts of studies attempting to link higher CEO pay with better performance, and the data is thin. There's also some evidence that firms with less diffuse ownership structures (i.e. owners more informed and in control) pay CEOs less, which at least weakly hints that high CEO pay isn't rationally chosen by owners who are paying attention.

Now, even "less well paid" CEOs still get paid a lot, so that's not an argument for paying CEOs $100k. But it may be an argument to pay CEOs towards the lower end of the CEO payscale, rather than towards the higher end.

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

#73

Post by delinka » Fri, Jul 20, 2012, 7:53 PM UTC

biot wrote: post #61

delinka wrote: post #49

Earlier quoted context omitted.

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.

But that's not the comparison. It's CEO versus all the employees, not a single employee.

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

#74

Post by grecy » Fri, Jul 20, 2012, 7:55 PM UTC

mikeash wrote: post #27

meninpink wrote: post #13

Silly publicity stunt and unbecoming of the principles of the free market. He could have created a lot more value by investing the money in a high-powered startup; not passing handouts to janitors and secretaries.

People doing what they want to do with their own money is "unbecoming of the principles of the free market"? WTF?

I don't agree with the parent comment above yours, but here is something interesting to ponder:

What if he'd taken that 3 million, put it in a big pile and burnt it?

The "free market" doesn't want you to do this, because it needs that money to be back in the market somehow (investing, start up, salaries, purchases, whatever)

Doing 'whatever you want' with your own money is not exactly what the free market wants you to do.

As a slight aside, while I'm not burning my income, I'm not a good "market citizen" in the eyes of the free market. I have no debt, no cell phone, no car. I grow and hunt my own food, live off grid (no bills) and spend the least amount of money possible. This, the "free market" does not want. Imagine if even 25% of people in developed countries did this from now on. Market collapse.

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

#75

Post by mikeash » Fri, Jul 20, 2012, 7:58 PM UTC

grecy wrote: post #74

mikeash wrote: post #27

Earlier quoted context omitted.

People doing what they want to do with their own money is "unbecoming of the principles of the free market"? WTF?

I don't agree with the parent comment above yours, but here is something interesting to ponder: What if he'd taken that 3 million, put it in a big pile and burnt it? The "free market" doesn't want you to do this, because it needs that money to be back in the market somehow (investing, start up, salaries, purchases, whatever) Doing 'whatever you want' with your own money is not exactly what the free market wants you t…

There is no "free market" apart from the desires and actions of its participants. If he decided that burning the money was the thing he wanted to do with it, then that's what the "free market" wanted to do with it too.

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

#76

Post by _delirium » Fri, Jul 20, 2012, 8:04 PM UTC

unreal37 wrote: post #66

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 bel…

I agree it's probably for internal loyalty, but I read the question as wondering whether it's this particular manner (give it to the CEO, who then chooses out of his munificence to donate it to the workers) that has extra effect over just changing the compensation structure.

After all, if the CEO really thinks, as he says, that this is just giving the workers the share of the company's success they deserve, he is uniquely well situated to propose a change to the bonus structure so that, in the future, that would actually be how bonuses are distributed. But it might be that a $300/yr bonus delivered the normal way (via HR, according to an official bonus policy) wouldn't have the same PR effect as a bonus positioned as a personal donation from the CEO, even if it's the same amount of cash.

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

#77

Post by eswangren » Fri, Jul 20, 2012, 8:14 PM UTC

nateburke wrote: post #29

Guts. This guy has guts. Hoarding away a 3m bonus like that has an implicit statement of "I'm afraid for my own fiscal future to the tune of 3m dollars" stamped on it. Instead, he gives it away, telling the world and his employees that he is confident, nay, OPTIMISTIC about the company's future. To contrast, take the typical American CEO: he or she would have taken this money, offshored it, spent another couple of ye…

It's easy to call people cowards when you're not in their situation and likely never will be. I'd like to see what you would do if you actually made that kind of money.

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

#78

Post by bconway » Fri, Jul 20, 2012, 8:19 PM UTC

keithpeter wrote: post #9

uptown wrote: post #4

Equates to about $314, or a month's pay per employee by reported estimates.

I received the equivalent of a month's wages as a bonus when I met a certain set of criteria for my teaching. It was a nice pat on the back. This feels good.

Depending on your location and level of teaching, how did your union feel about that (if relevant)? Every time we try to reward our best teachers, it gets blocked because it's not "fair" to those who didn't excel. Go figure.

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

#79

Post by eru » Fri, Jul 20, 2012, 8:20 PM UTC

marekmroz wrote: post #63

johngalt wrote: post #57

Earlier quoted context omitted.

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.

If that works in the long run, it's great for the shareholders.

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

#80

Post by eru » Fri, Jul 20, 2012, 8:21 PM UTC

rayiner wrote: post #62

johngalt wrote: post #57

Earlier quoted context omitted.

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.

I agree that we can talk about the median CEO, because that just requires ordering. But how would you talk about a 10x CEO? That needs multiplication on CEOs, which is much harder to define in a way that makes sense.