Changes in Management Compensation?

[CleverNick]

Dragon:

You are not losing money.

Let's say that at the end of 2010, you are making $5000 a month. Starting in Jan 2011, your salary will now be $5210 ($5000 times 1.042). Now in April, let's say that you get a 2%. Now your paycheck is $5314 ($5210 times 1.02). Your total annual salary for 2011 is $63,456.

Compare that to what your salary would be without the change:
In Jan 2011, you'd make $5000. In April 2011, after you get your 2% raise, you'll be making $5100. Now in November 2011 you are going to get a half month bonus of $2550. Your total annual salary for 2011 is $63,450.

Under the new system, you are making about the same.

Now let's extend the scenario to 2012 assuming another 2% raise in April 2012:

New system:
$5314 times 3 months plus $5420 times 9 months = $64,722

Old system
$5100 times 3 months plus $5202 times 9 months plus $2601 half month = $64,719

Again, it's about the same.

I can continue this for 2013 and so forth but the math continues to work out the same. Put it into Excel and see for yourself. You are a management person so certainly Excel should be your friend.

I truly don't understand all of the angst about this change. You aren't losing anything.

 

[mathematics]

Okay maybe I missed it but:

In 2011 I get the half month (4.2%) spread out over 12 months and a payraise April 1, 2011 (assuming a payraise).

In 2012 I get zero half month (0 %) spread out over 12 months and a payraise April 1, 2012 (assuming a payraise).

How am I not losing money?

because if you never got the half month spread out, your 2012 half month would be based off of a lower monthly salary.

2011:

assume: 5,000/month. 3% raise. half month spread out.

that's 5208.33 per month, plus the raise gives you 5364.58/month

2012:

5364.58 + 3% raise gives you: 5525.51/month x 12 = $66,306.20

2012 if you had a half month:

pre-raise salary wouldn't be 5364.58 as it is above, it would be lower: you'd have 5,000 + 3% raise = 5,150 (2011) then 2012 is $5150+3% raise = 5304.50

= $5304.5 x 12 = 63,654 + 2652.25 = 66,306.25

SAME SALARY, BUT LOWER TAXES SINCE A HALF MONTH IS TAXED AT A HIGHER RATE =)

 

[mathematics]

damn i was typing my reply as you posted yours lol

 

[FracusBrown]

Dragon:

You are not losing money.

Let's say that at the end of 2010, you are making $5000 a month. Starting in Jan 2011, your salary will now be $5210 ($5000 times 1.042). Now in April, let's say that you get a 2%. Now your paycheck is $5314 ($5210 times 1.02). Your total annual salary for 2011 is $63,456.

Compare that to what your salary would be without the change:
In Jan 2011, you'd make $5000. In April 2011, after you get your 2% raise, you'll be making $5100. Now in November 2011 you are going to get a half month bonus of $2550. Your total annual salary for 2011 is $63,450.

Under the new system, you are making about the same.

Now let's extend the scenario to 2012 assuming another 2% raise in April 2012:

New system:
$5314 times 3 months plus $5420 times 9 months = $64,722

Old system
$5100 times 3 months plus $5202 times 9 months plus $2601 half month = $64,719

Again, it's about the same.

I can continue this for 2013 and so forth but the math continues to work out the same. Put it into Excel and see for yourself. You are a management person so certainly Excel should be your friend.

I truly don't understand all of the angst about this change. You aren't losing anything.

Excel is my friend. When I combine excel with history and the reality of my W2, the economic lesson is that I have made less with every change in compensation.

I suggest you all take a lesson in Marketing and History. The sales people selling the product will present it in the most positive light. History can't be changed. Get out your W2.

Which would you rather hear? Which is more likely the plan?

"Big Brown spreads half month bonus into 12 equal payments to simplify process - has absolutely no effect on compensation or EPS"

"Big Brown develops plan to phase out half month bonus - Future EPS expected to grow through reduction in compensation"

 

[worldwide]

"Big Brown spreads half month bonus into 12 equal payments to simplify process - has absolutely no effect on compensation or EPS"

"Big Brown develops plan to phase out half month bonus - Future EPS expected to grow through reduction in compensation"[/QUOTE]



How is the half month being phased out if it is being split into 12 parts and added to the monthly salary?

 

[Dragon]

Dragon:

You are not losing money.

Let's say that at the end of 2010, you are making $5000 a month. Starting in Jan 2011, your salary will now be $5210 ($5000 times 1.042). Now in April, let's say that you get a 2%. Now your paycheck is $5314 ($5210 times 1.02). Your total annual salary for 2011 is $63,456.

Compare that to what your salary would be without the change:
In Jan 2011, you'd make $5000. In April 2011, after you get your 2% raise, you'll be making $5100. Now in November 2011 you are going to get a half month bonus of $2550. Your total annual salary for 2011 is $63,450.

Under the new system, you are making about the same.

Now let's extend the scenario to 2012 assuming another 2% raise in April 2012:

New system:
$5314 times 3 months plus $5420 times 9 months = $64,722

Old system
$5100 times 3 months plus $5202 times 9 months plus $2601 half month = $64,719

Again, it's about the same.

I can continue this for 2013 and so forth but the math continues to work out the same. Put it into Excel and see for yourself. You are a management person so certainly Excel should be your friend.

I truly don't understand all of the angst about this change. You aren't losing anything.

New system:
$5314 times 3 months plus $5420 times 9 months = $64,722

CleverNick, where is the half months pay for 2012??
You figured in 2.0% but no half months pay?

 

[Catatonic]

"Big Brown spreads half month bonus into 12 equal payments to simplify process - has absolutely no effect on compensation or EPS"

"Big Brown develops plan to phase out half month bonus - Future EPS expected to grow through reduction in compensation"

How is the half month being phased out if it is being split into 12 parts and added to the monthly salary?

I think he is referring to the popular believe that new hires will be hired at a lower rate and that is where the savings will be.
I don't buy that myself ... along that line I think UPS may have done it so they could offer an average higher monthly salary to new recruits.
Most recruits only look at the monthly salary and base their decision on that.
All part of the change to the New UPS.

 

[CleverNick]

New system:
$5314 times 3 months plus $5420 times 9 months = $64,722

CleverNick, where is the half months pay for 2012??
You figured in 2.0% but no half months pay?

Dragon:

I can't tell if you are a troll or you truly are not getting it. I will assume the latter and state it one more time. If you still can't figure it out, ask your local HR to help you out.

Old system: half month bonus every year
New system: ONE TIME salary boost of 4.2%

Even though under the new system you only are getting a one time salary boost, you get the same amount of money under the old system and under the new system. Do the math for yourself and you will see that this is the case. I didn't use any calculus - just elementary school arthmetic. Otherwise show me where my math is wrong.

 

[mg5]

Just a thought on this. It reminds me of the union issue of a bonus vs. an .35 increase. Increase, there all the time going forward, bonus one time only.

We must not forget the no raise and stopping of 401k. That effects us for the rest of your time here. How much of that will never come into play ?

Half month, MIP, 401k for retirement, stock dividends & total year end figure........That's a big gotcha that we never get back. Reduction in total compensation.

 

[UpstateNYUPSer(Ret)]

I thought the 401k match was being reinstated 1/1/2011.

 

[Dragon]

Dragon:

I can't tell if you are a troll or you truly are not getting it. I will assume the latter and state it one more time. If you still can't figure it out, ask your local HR to help you out.

Old system: half month bonus every year
New system: ONE TIME salary boost of 4.2%

Even though under the new system you only are getting a one time salary boost, you get the same amount of money under the old system and under the new system. Do the math for yourself and you will see that this is the case. I didn't use any calculus - just elementary school arthmetic. Otherwise show me where my math is wrong.

New system: ONE TIME salary boost of 4.2%

Ouch....check out the PM I sent you.

 

[UPSSOCKS]

New system: ONE TIME salary boost of 4.2%

Ouch....check out the PM I sent you.

I'm not happy without the half month. I liked that.... I know its all the same but whatever.
It could be worse. We could be in the union and about to get screwed on the next contract by our own "brothers."

 

[Popeye]

SAME SALARY, BUT LOWER TAXES SINCE A HALF MONTH IS TAXED AT A HIGHER RATE =)

No, you are taxed at the same rate. The withholding is different, but when you file your tax return it comes out the same.

 

[UpstateNYUPSer(Ret)]

No, you are taxed at the same rate. The withholding is different, but when you file your tax return it comes out the same.

I think what he was trying to say is the half month is considered to be a bonus which is generally taxed higher than your regular salary. You are saying that it all works itself out when you file your taxes. Wouldn't you prefer to have that money upfront rather than wait for your refund?

This is why I used to hate getting "green checks" as they were treated as bonuses for tax purposes.

 

[pretzel_man]

New system: ONE TIME salary boost of 4.2%

Ouch....check out the PM I sent you.

I've done the math multiple times. Assuming all things stay equal, nothing is lost.

If someone wants to argue that this opens the door for future changes, that is a different story.

When the 4.2% becomes part of the salary, then increases also impact that amount. It stays the same.

 

[j13501]

I've done the math multiple times. Assuming all things stay equal, nothing is lost.

If someone wants to argue that this opens the door for future changes, that is a different story.

When the 4.2% becomes part of the salary, then increases also impact that amount. It stays the same.

Pretzel_man,
Does any of the salary information discuss increasing the salary "bands" for each grade level? My concern is for high performing managers, who have taken multiple, difficult assignments, and performed them well. They got good raises, until they hit the top of their salary "band". Then the raises were limited. I always thought it unfair, but at least all full time management, even those at the top of the salary band got the 1/2 month at peak season. Now I see a situation that could occur after this year- a manager or supervisor at the top of their salary level will get a smaller raise then they should have, because the 4.2% increase put them more quickly past the midpoint or even worse, to the top of the salary grade level.

 

[Lineandinitial]

To me, it just proves that there really isn't anything "special" about UPS for management people.
I actually beleived all the crap about "owned by thbe managers, managed by the owners". There was a time where there was nothing that I wouldn't do for UPS. I made the mistake of saying yes to everything that was ever asked of me.
As I see my co-managers getting demoted for trivial things, departments consolidated and the expectations of output increased, or the imbeciles running around as if they are "in charge" because they kissed enough ass in their past, it just makes me feel less and less positive about remaining at UPS.
Unfortunately, I have put in over 25+ years here and am not willing to move to another state for a similar occupation.
I'll just sit back and collect my pay check and provide some level of effort.
Bad attitude??

Yes

I haven't enjoyed my job for a long time now. It continues to get worse.

To sum it up, changing the 1/2 month is just another indicator that UPS is not the same company that it was. I am disgusted with the jerks that think we don't know that........."Partner"!!!!

 

[pretzel_man]

Pretzel_man,
Does any of the salary information discuss increasing the salary "bands" for each grade level? My concern is for high performing managers, who have taken multiple, difficult assignments, and performed them well. They got good raises, until they hit the top of their salary "band". Then the raises were limited. I always thought it unfair, but at least all full time management, even those at the top of the salary band got the 1/2 month at peak season. Now I see a situation that could occur after this year- a manager or supervisor at the top of their salary level will get a smaller raise then they should have, because the 4.2% increase put them more quickly past the midpoint or even worse, to the top of the salary grade level.

I called up a friend in Corporate Compensation and asked about the salary bands. She told me that all of the bands will move up by 4.2%. I have been tracking salary bands for over 10 years. I will be able to double check if she is accurate or not.

Generally, the upper end of the salary band is at 120% of the mid point. The 4.2% aside, if I were told that my raise were limited because I'm at the top of my band, I would not be upset. Those are pretty hefty upper limits. Generally those at those levels are people that got demoted at a point in their career.

On that note, I understand that demotions will now carry a reduced salary with them.

 

[Catatonic]

I called up a friend in Corporate Compensation and asked about the salary bands. She told me that all of the bands will move up by 4.2%. I have been tracking salary bands for over 10 years. I will be able to double check if she is accurate or not.

Generally, the upper end of the salary band is at 120% of the mid point. The 4.2% aside, if I were told that my raise were limited because I'm at the top of my band, I would not be upset. Those are pretty hefty upper limits. Generally those at those levels are people that got demoted at a point in their career.

Or went from the District to Corporate ... pay bands are different or at least that is what I was told.

 

[pretzel_man]

Or went from the District to Corporate ... pay bands are different or at least that is what I was told.

I have been tracking for many years. There are not different bands for district and corporate.

There are different bands based on geography. For instance, your band being in GA, is lower than a counterpart of yours who may be in Mahwah.