pretzel_man
Well-Known Member
P-man . . . . you have a credibility gap.
According to the 14A (proxy) The LTI program was modified in 2008 so that except for region managers & up, the LTI was paid in RPUs (Stock that vests in 5 years) not options, and that for the region managers and above it is 75% RPUs and 25% options. For the non management committee types, the payout is between 25 & 75% of annual base salary. LTI covers 3,100 folks, and has no performance objectives!
LTIP is a THIRD bonus, on top of MIP & LTI, and the target payouts are higher, ranging from50-200% of annual base salary, but covers 600 folks. And the payouts are and have been, substantial since the plans inception; in 2006 85% to plan; 2007 75% to plan and 2008 65% to plan. 65% of 200% is still 130% of base salary. A pretty nice bonus in anyones book. And the RSUs vest in three years, two years faster then MIP
So how much is a district managers salary??
As a company, UPS has never had much of a problem with the retention of District Managers have they?? And in fact, I have never heard of a member of the Management Committee being swept up by another firm . . . Only Eric Kirchner comes to mind as a Region Manager that left for the "brass ring" elsewhere.
The issue is the retention of front line managers & supervisors; by continuing to balance the books on the backs of those supervisors & managers means that the retention issue will only get worse.
I believe that everything you say is true.
It doesn't change the fact however that the LTIP was added because of the analysis on the relative pay of those at grade 20 and up compared to other companies.
As you said, they are the top 600 to 1000 members of UPS in terms of level. For a 400,000 person company that is the top .25%.
What would the upper .25% of employees in other companies make? I don't know that answer, but the compensation committee decided that these people should be compensated to bring them closer to parity.
As far as LTI goes, you are also correct that it changed to RPU's (or RSU's - I keep forgetting which abbreviation LTIP is). That also doesn't change the fact of all the years of previous options that are worthless.
The world has changed. In the old days, management just had to follow the cookie cutter approach. We were growing. If we did tasks, the business would improve.
Today, management has to be much more dynamic. IMO, that's why some PAS sites have done poorly and others have done very well. It takes more skill to run an operation properly in today's environment.
I have no problem with the upper echelon of of UPS management getting compensated for their responsibility level.
P-Man