Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

dailytech.com

Post reply on HN
Print view View original

101–110 of 153 posts

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

#101

Post by larrys »

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 don't think that it's cynical at all to consider that. I wish people also would stop jumping all over someone just because they raise a particular possibility for consideration and debate (noting you prefaced by saying "cynical wondering" to lessen the ire of anyone who might jump on you for being cynical.)

One issue though. I wonder what the tax aspect is of getting a 3 million dollar bonus and giving it away.

The story says this:

"The CEO of Lenovo, Yang Yuanqing, recently received a fat bonus of $3 million. Rather than stuffing that big bonus away in his own bank account, Yang Yuanqing gave it away."

So by "recently received" Yang received the money. So that is a taxable event (assuming US). You can't receive money and not pay taxes on it no matter what you do with it. (Even if you throw it in the trash can it's still taxable).

To answer my own question the story might leave out an important detail. That the CEO had the right to the money but said "disburse to the employees instead". That's the same thing but lacks the tax implication as the money was never received. But it would lean more toward your "cynical" view. (Good thinking by the way).

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

#102

Post by larrys »

wtvanhest wrote: post #68
dsr_ wrote: post #36

Earlier quoted context omitted.

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.

"he would have actually taken the $3m"

Story implies he received the money.

"Rather than stuffing that big bonus away in his own bank account"

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

#103

Post by ThomPete »

rayiner wrote: post #97
bherms wrote: post #94

Earlier quoted context omitted.

10,000 line workers can easily be replaced by another 10,000 people with (likely) little to no education, credentials, etc... CEO on the other hand? Doubt it.

Again, you're conflating supply and demand with contribution.

Contribution as a term here is fluffy. I know what you are getting at but it makes no sense using it for some sort of comparison.

What you need to look at is impact of decisions. If the CEO makes a wrong decision the entire company can go down. If a worker makes a wrong decision it's much less of an issue.

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

#104

Post by jonnathanson »

_delirium wrote: post #76
unreal37 wrote: post #66

Earlier quoted context omitted.

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 uni…

Sometimes these things are actually accounting issues. Employee bonuses are operating costs. But executive bonuses are a more complex instrument, and are governed by different sets of accounting and fiduciary regulations.

This is why, for instance, a firm may decide not to pay out bonuses to employees during a bad year -- but may still reward its top executives with hefty bonuses. The firm may actually be obligated to pay out the bonuses to its executives by way of their contracts, or in some cases, as scheduled advances on their insurance policies. (This latter practice is becoming increasingly common as a tax-deferral strategy).

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

#105

Post by [deleted] »

rayiner wrote: post #25
kapilkale wrote: post #18

This is great, but this statement from the author is a pretty terrible assumption: "It's nice to see an executive giving away a huge chunk of money to the employees that had as much to do with Lenovo's successful year as any executive within the company"

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…

[deleted]

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

#106

Post by ajross »

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.

Or more subtly cynical: it's a way to boost net wages without actually increasing salaries. This is a real problem in the PRC, where the enormous trade surplus has left an artificially depressed local currency. Workers are being paid much less than they should/would be in an unrestricted exchange environment. The whole point of the managed exchange rate is to keep salaries low of course (and thus preserve that trade surplus), so there's no doubt pressure on executives from boths sides: underpaid workers and government regulators trying to avoid a wage explosion.

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

#107

Post by wpietri »

mikeash wrote: post #75
grecy wrote: post #74

Earlier quoted context omitted.

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.

Yep. Otherwise it isn't free.

Burning money, by the way, doesn't actually destroy value. It just increases the value of all the other money in circulation. So in effect it's a gift to other money-holders.

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

#108

Post by rayiner »

ThomPete wrote: post #103
rayiner wrote: post #97

Earlier quoted context omitted.

Again, you're conflating supply and demand with contribution.

Contribution as a term here is fluffy. I know what you are getting at but it makes no sense using it for some sort of comparison. What you need to look at is impact of decisions. If the CEO makes a wrong decision the entire company can go down. If a worker makes a wrong decision it's much less of an issue.

Contribution is a term that can be pinned down (I suggested using a sensitivity analysis above).

I don't see any particular justification for "What you need to look at is impact of decisions." Why is "impact of decisions" a more important criterion than "who does the work."

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

#109

Post by woobles »

keithpeter wrote: post #39
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.

Would coreboot reassure the gentleman? Or would that be dismissed as an anarchist conspiracy? Seriously: are there any laptops/PCs still manufactured within the national borders of the US?

I remain unconvinced that anything would assuage his paranoia, unfortunately.

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

#110

Post by justin66 »

larrys wrote: post #101
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 don't think that it's cynical at all to consider that. I wish people also would stop jumping all over someone just because they raise a particular possibility for consideration and debate (noting you prefaced by saying "cynical wondering" to lessen the ire of anyone who might jump on you for being cynical.) One issue though. I wonder what the tax aspect is of getting a 3 million dollar bonus and giving it away. The…

> To answer my own question the story might leave out an important detail. That the CEO had the right to the money but said "disburse to the employees instead". That's the same thing but lacks the tax implication as the money was never received. But it would lean more toward your "cynical" view.

If it was possible for him to do that, it would have been wise and there's nothing cynical about it at all. Those employees would be on the hook for income taxes regardless, so it's all the same to them. If the CEO gets the money first, the total going to employees is reduced by the fraction represented by the taxes he pays, or he pays the taxes out of pocket. None of the parties involved benefit from that.

Post reply on HN