2007 LTIP Grade-20 and up bonus

Discussion in 'UPS Discussions' started by stgeorge, Mar 12, 2007.

  1. stgeorge

    stgeorge New Member

    Looks like the LTIP (long-term incentive plan) bonus for grade-20's and higher has been made into a yearly thing.

    Summary of UNITED PARCEL SERVICE INC - Yahoo! Finance

    I'll let other people do the number crunching, but by my calculations, grade-20 and up will be receiving between 2 to 4 times their salary in bonus by the third year (2008) onward.
     
  2. nhguy

    nhguy New Member

    This helps explain why we act like we are going out of business. Got to find a way to cut everywhere so we can pay for the big boys bonuses. Just another example of how the true partnership no longer exsist!!!

    It's truely not the same company it was when we were private!!!!!!!!!!!!:confused:1
     
  3. beentheredonethat

    beentheredonethat Well-Known Member

    Your calculation are a bit off. Even if you assume on the high side that they get 240% in bonus (max is 250% per article). Then they would get roughly 1/3 each year for 3 years. Once we are in full swing (3+ years) of giving this award to the grade 20's and up. What they physically would get was 1/3 of the 07 award, 1/3 of the 2008 award and 1/3 of the 2009 award. Which even at 240% each year would still give them 240%. You can rightfully only count the money once, weather you count it all in the beginning or when it is vested. But the only way you can come up with 4* is to double count the awards. BTW - I personally think this reduced number I calculated is still pretty excessive.
     
  4. dumbsup

    dumbsup Member

    Still, beenthere, it's a hell of alot more than I got for an increase this year...
     
  5. stgeorge

    stgeorge New Member

    I think you are incorrect in your assumption... 2006 award is spread over 3 years (30% in year 1, 30% in year 2 and 30% in year 3 + 10% if certain criteria is met). 2007 award is spread over 3 years... on top of the 2006 award. 2008 award is spread over 3 years again on top of 2006 and 2007 award... so by the third year they are getting 3 awards of 50-250% of their salary (the 50-250% may be different each year).

    Grade-20 making say 250k a year. They are eligible for 200% bonus 3 years in a row and never get a raise (hah):

    2007: Receive 30% of 200% of 250k (2006 year 1) = 250k+150k = 400k
    2008: Receive 30% of 200% of 250k (2006 year 2) PLUS Another 30% of 200% of 250k (2007 year 1) = 250k+400k = 550k
    2009: 30% of 200% of 250k, 30% of 200% of 250k, 30% of 200% of 250k + 10% bonus = 250k+500k+50K = 750k (or 3 times their salary)

    Not bad...
     
  6. loserupser

    loserupser Two minute Therapist

    What a shame!!!!!!
    Just shameful!!!
    Thats a big incentive for the average full-timer and mgr to suck up and take it . Hoping that one day they could make grade 20.

    P.S. very few will make that jump
     
  7. Ms Spoken

    Ms Spoken New Member

    But, with all that said.... We still have that turkey bonus you must figure it's worth.
     
  8. Channahon

    Channahon New Member

    The incentives are to compensate and keep the grade 20's and above. It's not any easy job,
    working for Corporate and the Districts in some positions. Lots of travel, away from family, relocations and on call 24/7. As regions were consolidated over the years, the workload at least doubled for most grade 20 managers.
    Not to mention the jobs overseas that some of the grade 20's take. Imagine moving your family out of the country.

    Best jobs in management are still in the districts, at least you're home most of the time.
     
  9. Hangingon

    Hangingon New Member

    It doesn't say it's a permanant plan, just mentions 2007. Does it have to be renewed every year then?
     
  10. stgeorge

    stgeorge New Member

    Screwed up the intermediate numbers, the totals were right:

    2007: Receive 30% of 200% of 250k (2006 year 1) = 250k+150k = 400k
    2008: Receive 30% of 200% of 250k (2006 year 2) PLUS Another 30% of 200% of 250k (2007 year 1) = 250k+150k+150k = 550k
    2009: 30% of 200% of 250k, 30% of 200% of 250k, 30% of 200% of 250k + 10% bonus = 250k+150k+150k+150k+50K = 750k (or 3 times their salary)

    hangingon: i don't see the board ever taking this away from grade-20's, who probably whined and complained about worthless stock options until they got this (which was paid for by neutering the MIP for everyone else)
     
  11. beentheredonethat

    beentheredonethat Well-Known Member

    I agree with most of the math you have hear. Your original statement you said was they get a bonus of 2 - 4X their annual salary. I basically said (using the 240% number) Their bonus was going to be about 2.4* their salary. You came up with 2X their salary (using 200%) Plus you added their salary or 3X. Is it a lot of money, YES. Is it excessive, I think Yes. My point is the bonus assuming your 200% number would still come out to basically 2X salary not 2-4X's. Their overall salary could be added again to get 3X total.
     
  12. SeniorGeek

    SeniorGeek Below the Line

    On April 1, 2007, the Compensation Committee of the Board of Directors of U P S, Inc. (the "Company") approved the award of restricted turkey units ("RTUs") to be granted as UPS 2007 Long-Term Employee Performance Awards ("2007 LTEP").

    Under the 2007 LTEP, RTUs are awarded to union employees, non-union non-management employees and certain other eligible employees pursuant to a RTU award agreement. RTU award grants range in size from 50% to 250% of a turkey.

    Of the total turkey award, 90% of the turkey award will be divided into three substantially equal servings, one for each calendar year in the three-year award cycle from 2007 to 2009. The specific performance measures and targets for each such serving will be determined by the Committee either before or within the first quarter of the calendar year in which the performance is measured.

    The number of RTUs earned each year will be the target number adjusted for the way the Committee feels that quarter. The Committee may provide for payment of a percentage less than or more than 100% of target RTUs based on achievement of performance criteria targets (as determined by the Committee).

    The performance criteria approved by the Committee for 2007 include no over 9.5's, no left-in-buildings, fully-completed lunch times, meeting sales lead targets, zero damages, zero misloads, zero concerns and zero backtalk. In case you have not figured it out yet, the performance criteria will be determined by the Committee in its discretion.

    The Committee will retain the discretion to adjust employees's results during the award cycle to exclude the effects of achievement. The award, if ever earned, will be released to participants for the purposes of consumption on January 31, 2010, provided the participant is employed as of the release date. Special rules will be fabricated for terminations by reason of death, disability or retirement.

    A participant's earned RTU account will be adjusted quarterly for freezer burn. The RTU awards that vest will be paid in frozen or substantially-frozen form on March 12, 2010 (or earlier in the event of death).
     
  13. nhguy

    nhguy New Member

    channahon,

    You disappoint me when you defend how hard they work. These are the people sitting in the Ivory Tower that make all the decisions that the front line people have to implement. These guys have become so out of touch with the realities of the front line people it isn' t funny! These people don't work the crap hours, the weekends, the holidays as the rest of us do. Just call any district office or region office during a holiday and see what you get. (Voice mail because they aren't there!)
    I know in one of your earlier posts you mentioned you are retired!
    You have NO IDEA of the things going on today! Anytime a company tries to justify incentive plans by saying we need to do this to keep our good people is a bunch of crap!!!
    If you saw the disgraceful part time supervisor raises that we just gave, it is embaraasing to say the least. I myself have not been given my raise yet, but based on what the partime sups got I would be surprised to see another year with a 2.5% increase. On top of that my cost for medical just went up $90.00 a month over last year. So after taxes I might net $25.00 a month.
    The part time sups, ft sups and business managers are the real nuts and bolts of the management team. The unforunate thing is that we are the ones who make all the sacrifices and get the least return for it.
    We have leadership that is reactionary. It would be nice to see someone take this company over that truley thinks outside the box . After 8 years on the public market, our stock is worth less than it was during the day the IPO was offered. I believe the peak sale on the day of the IPO was $74.00 a share.
    I just had to vent my frustration with the way this company is being run!
     
  14. tarnsman

    tarnsman Guest

    ...I certainly agree with you.....I suggest that you all apply an Inflation Table to both the stock price as well as the annual raises(?) and see the outcomes...Then figure in the yearly increase in health care costs ....If only the raises (?) were at the inflation rate !!!.......The term "raise" is quite ironic......Take a look at what Big Mike & his Cronies have given themselves in the past & what they will asuredly give themselves this year !!!......
     
  15. Channahon

    Channahon New Member

    nhguy - Sorry to disappoint you, just stating my opinion.
     
  16. HOWNOWBROWNCOW

    HOWNOWBROWNCOW New Member

    Been following this board for a long time, but never was incensed enough to post a reply - until now. The LTIP Incentive plan is the straw that broke the camels back for me, and it's a disgrace. If they wanted to give every manager at Grade 20 and above options that would be worth 1 million if the stock hit $100, that would be fine with me - we all would benefit. To give these outrageous amounts and not have it tied into the stock price is almost criminal, and by the way, I do agree that the operation Sups and Business Managers should have been the ones getting add'l compensation, not the fat cats. Anybody who thinks that the MIP wasn't cut in part to pay for this latest boondoggle just has their head in the sand. And speaking of boongoggles, $80 million to get rid of 194 Corporate people, half of which were going to retire anyway - it's unbelievable.

    There is no long term loyalty at UPS now. Everybody in Corporate spends their entire day justifying their jobs and department. Many retirees that defend UPS and post on this board have no idea how inept and self serving upper management has become - political quicksand. To them I say, you would be even more disgusted than the people who are posting on this board on a regular basis if you were still here. I will say that many of the problems we are now facing were already apparent when Mike took over, and he has tried to do the right thing. However, Mike has let the inmates run the asylum during his entire term, holding no one at the senior level accountable, promoting those that have failed miserably up the management ladder. He has not been the tough CEO that we needed, and our problems have gotten progressively worse under his watch. The LTIP was put into place to placate those upper managers that whined they weren't going to become multi-millionaires, and justified as necessary to keep good people (pure BS) and Mike caved. For the record, I am a long time UPS'er who only has 2 years left to retire, and I plan to withhold authority for every BOD nominee and any proposal put forth this year. Those of us that have substantial A shares remaining have a DUTY to hold these people accountable. We are the owners of the company - are you satisfied the way things are being run? Are you satisfied with performance of the stock the last 7 years? Are you satisfied having your MIP decimated to pay for the LTIP?
     
  17. paganpink

    paganpink New Member

    I have to say that the share price isn't always the boards fault, as the Company is making record profits and has run the business quite well in many ways such as pursuing International and SCS work so that a larger and larger percent of the profit comes either from outside the US, or from providing services other than delivering packages. UPS has excellent margins, and astute advisors such as Warren Buffett, Morningstar, and many others have bought tens of millions of dollars worth of shares indicating that they too believe the shares are underpriced. Fedex has been a darling of the investment community starting back when they really were the best bet in Transportation stocks simply because UPS was private and you couldn't buy it. Unlike UPS they have a reputation for giving conservative forecasts on their earnings, and then beating those forecasts quarter after quarter. We screwed up last year when we missed our forecast (even though it was by only a few cents) because the market is driven by emotion more than by logic much of the time. You can certainly make the argument that the earnings calls which UPS provides seem to regularly disappoint investors and business writers equally even where all the news seems to be good. We are so cash rich that many analysts believe that we aren't leveraging that money as well as we could, although it is also a primary reason we are one of less than a dozen corporations that still have a four star credit rating (and the only transport stock in the group, of course.) We remain far better managed than FDX as evidenced by the fact that we pay almost three times as much as they do for labor costs, and yet still dominate almost every aspect of our industry. It's startling to think that if FDX was unionized, with the same pay and benefits as UPS, they would undeniably be out of business tomorrow. But the board must find a better way to communicate with Wall street. I should add that I heartily agree that some of the management practices being used today are the same ones that supervisors were taught in "Peoples Workshop" training back in the eighties would not work, or would be temporary at best. All UPS'ers are in this together, which is something both sides seem more likely to forget with the present management culture. And before I get off my soapbox, I believe much of it is due to "fast tracking" female management to the extent that many are truly unprepared or incapable of handling the jobs that they are given. There is a female division manager in our District who was a part time supervisor less than five years ago and yet is responsible for both Hub and Air operations- neither of which she ever worked in, herself, in any capacity. Our managers are used to having to train their own bosses, but she not only knows nothing of those operations, she never spent any time in rotational assignments in IE, or HR, or Accounting, as used to be the case, in oder to help prepare Division management for all of their responsibilities. She has an associates degree in a non business field by the way in case anyone thinks she is relying on her education. The Company must get back to the basics that got us here, such as the partnership concept he felt was the single most important aspect of our success. And also the dedication to the customer exemplified by Jim Casey's axiom to "take care of the other mans business, and your own business will take care of itself"
     

  18. Bwahahahaha!! Print this speech out, take the printout to a car dealer, and try to give it to them as down payment on a new car. Or - try to give the printout to your kid's college as payment. Or - take the printout to the bank and ask them to loan you money using it as collateral.

    Our upper management's strategy is not creating value for shareholders. Since the stock isn't creating value it looks like they're paying each other off with this Grade 20 and up bonus...it's really disappointing. This makes me sick.
     
  19. airbusfxr

    airbusfxr New Member

    This is not only for the top, if you a "good ole partner" you can be inducted into the group. Most do not know about the secret club of invited "partners".
     
  20. Hawk780

    Hawk780 No One in Particular

    Not sure how accurate this is, would love to see some evidence of this.