LTIP for the CEO, COO & CFO

pretzel_man

Well-Known Member
That is apples and oranges and I think you know it.
I've seen data showing that in the 1979 the average CEO of a Fortune 500 company made approximately 40 times the salary of the front line worker within their company.
By 2003 this differential increased to 440 times the salary.
What can these executives be bringing to the table to justify this kind of disproportionate increase in compensation?
As an hourly, I have not realized even 5% in any one year.
Hence the apples and oranges.
Lower level managers have already given up a portion of their piece of the pie so our CEO can get his "fair market share".
Not to mention the beating the part timers continue to endure.
If not for the Teamsters I may not have maintained my share either.
Your persistent defense of this travesty makes me ponder whether you are in the inner circle of the "good old boys club".

Scott Davis is probably around 50 to 60 times.... A grade 20 is probably around 4 times.

I don't see this as apples and oranges.

P-Man
 

pretzel_man

Well-Known Member
P-Man:
For some reason, my level of trust has diminished over the last 24 years.
I don't know why; either too much Yahoo Finance Boards, BC, or casual observation.
I don't believe as much as I used to.

I've been here 34 years.... The biggest change I see is the competition and lack of growth. These two things have led to lack of stock growth.

In the old days, our mistakes were covered by growth. We knew that the hard work paid off at the end of the year with growth of stock.

Today, the competition has a much lower cost structure. We can no longer get by with the cookie cutter approach. We are forced to be leaner. I don't think that the work is really harder today, but its much, much different.

However, today we are not rewarded with stock growth.

By the way, the lack of growth has even larger impacts at higher levels....

Stock options from 10 years ago just expired. They were awarded at $50. When they exired the stock was about $56. The next ones to expire are at $56 I think. It gets much worse after that. In the old days, a division manager (or higher) could expect those options to be worth a tremendous amount.

The point is NOT to feel sorry for these executives. They knew what they were signing up for. But they are not the source of the problem. Competition and lack of growth is.

P-Man
 

Catatonic

Nine Lives
I've been here 34 years.... The biggest change I see is the competition and lack of growth. These two things have led to lack of stock growth.

In the old days, our mistakes were covered by growth. We knew that the hard work paid off at the end of the year with growth of stock.

Today, the competition has a much lower cost structure. We can no longer get by with the cookie cutter approach. We are forced to be leaner. I don't think that the work is really harder today, but its much, much different.

However, today we are not rewarded with stock growth.

By the way, the lack of growth has even larger impacts at higher levels....

Stock options from 10 years ago just expired. They were awarded at $50. When they expired the stock was about $56. The next ones to expire are at $56 I think. It gets much worse after that. In the old days, a division manager (or higher) could expect those options to be worth a tremendous amount.

The point is NOT to feel sorry for these executives. They knew what they were signing up for. But they are not the source of the problem. Competition and lack of growth is.

P-Man

As always excellent points.
However, you use to could believe what the company communicated but now you have to read between the lines and look for key words like "enhancements". LOL I don't think HR will ever live that one down.

 

pretzel_man

Well-Known Member
As always excellent points.
However, you use to could believe what the company communicated but now you have to read between the lines and look for key words like "enhancements". LOL I don't think HR will ever live that one down.

I agree with that. I would prefer the "blunt" approach. Just tell me its going to hurt.

P-Man
 

Cezanne

Well-Known Member
I've been here 34 years....

The point is NOT to feel sorry for these executives. They knew what they were signing up for. But they are not the source of the problem. Competition and lack of growth is.

P-Man
Yeah, I can not sleep at night feeling sorry for those executives.:sick:
 

Bubblehead

My Senior Picture
Scott Davis is probably around 50 to 60 times.... A grade 20 is probably around 4 times.

I don't see this as apples and oranges.

P-Man

Listen to this . . . The Compensation Committee has a three year plan to increase the bonuses for the CEO from 250% of the annual salary to 675%; the COO from 225% to 575% and the CFO from 225% to 300%

Assuming your numbers are correct, what will this three year plan do for this ratio?
Once again what do these executives bring to the table to justify such a disproportionate piece of the pie, while others are enduring pay cuts and benefit eliminations?
Because all the other companies are doing it?
 

pretzel_man

Well-Known Member
Listen to this . . . The Compensation Committee has a three year plan to increase the bonuses for the CEO from 250% of the annual salary to 675%; the COO from 225% to 575% and the CFO from 225% to 300%

Assuming your numbers are correct, what will this three year plan do for this ratio?
Once again what do these executives bring to the table to justify such a disproportionate piece of the pie, while others are enduring pay cuts and benefit eliminations?
Because all the other companies are doing it?

How much is Steve Jobs worth?
aaple-vs-msft-2.gif
 

Bubblehead

My Senior Picture
How much is Steve Jobs worth?
aaple-vs-msft-2.gif

Nice graph!!!
Good eye candy for the dumb truck drivers...:crazy2:

I apologize, that was out of line in light of your consistent civility.
But once again I must claim apples and oranges.
Steve Jobs was a co-founder of that company and his net worth is obviously tied to his sizable position in the company's stock.
As it should be in this instance.
Net worth is not what we were debating, annual compensation for the position of CEO was.
If the CEO is also the founder (owner), he cannot be compared to Steve Davis and his rise to the position he is in.
It seems we are back to the reasoning that because they do it, we need to do it.
My contention is that no CEO of any company is worth the inflated compensation packages that have evolved in the last 30 years.
 
D

Dis-organized Labor

Guest
I personally do not feel as valued as I felt 20 years ago. Many of my colleagues feel the same way. Regardless of the cards, thank you's, etc. I work for $$, not for canned corporate thank you campaigns.
I also do not recognize the value that Scott brought between taking the position and his increase. It's been stated before, but the timing was terrible and I count it as just more more thing that I've seen in the over 22 years that I've been in management that disappoints me.
 

pretzel_man

Well-Known Member
Nice graph!!!
Good eye candy for the dumb truck drivers...:crazy2:

I apologize, that was out of line in light of your consistent civility.
But once again I must claim apples and oranges.
Steve Jobs was a co-founder of that company and his net worth is obviously tied to his sizable position in the company's stock.
As it should be in this instance.
Net worth is not what we were debating, annual compensation for the position of CEO was.
If the CEO is also the founder (owner), he cannot be compared to Steve Davis and his rise to the position he is in.
It seems we are back to the reasoning that because they do it, we need to do it.
My contention is that no CEO of any company is worth the inflated compensation packages that have evolved in the last 30 years.

First, I do not believe nor have I ever said UPS drivers are dumb.

Second, by worth, I did not mean his net worth. I meant his VALUE to Apple.

Remember, Jobs was was away from Apple for quite a while.

You said: "what do these executives bring to the table to justify such a disproportionate piece of the pie". I was pointing out that there are executive (Jobs one of them) that increase company and shareowner value tremendously.

Will Davis be one of them? I don't know.... Maybe....

P-Man
 

Bubblehead

My Senior Picture
First, I do not believe nor have I ever said UPS drivers are dumb.

Second, by worth, I did not mean his net worth. I meant his VALUE to Apple.

Remember, Jobs was was away from Apple for quite a while.

You said: "what do these executives bring to the table to justify such a disproportionate piece of the pie". I was pointing out that there are executive (Jobs one of them) that increase company and shareowner value tremendously.

Will Davis be one of them? I don't know.... Maybe....

P-Man

I hear you, and value your opinion from the other side of the tracks.
I simply think the credit along with the spoils should and could be spread out more evenly through the ranks.
I'm not saying these leaders shouldn't be handsomely rewarded for their efforts, it's simply been taken way to far.
This sense of entitlement amongst these golden boys needs to squelched.
Consider it part of the process of making the operation "leaner and meaner".
If cuts and sacrifices need to be made, the top is where the process should start.
Any good leader or business owner would see it this way.
Instead it's working in reverse at UPS and it's a shame.
How can your boy Davis take an increase like this in good conscience, knowing his subordinates down the ladder have been forced to accept concessions?
 
D

Dis-organized Labor

Guest
I hear you, and value your opinion from the other side of the tracks.
I simply think the credit along with the spoils should and could be spread out more evenly through the ranks.
I'm not saying these leaders shouldn't be handsomely rewarded for their efforts, it's simply been taken way to far.
This sense of entitlement amongst these golden boys needs to squelched.
Consider it part of the process of making the operation "leaner and meaner".
If cuts and sacrifices need to be made, the top is where the process should start.
Any good leader or business owner would see it this way.
Instead it's working in reverse at UPS and it's a shame.
How can your boy Davis take an increase like this in good conscience, knowing his subordinates down the ladder have been forced to accept concessions?

I absolutely agree. Not even a small bone like the DESPP has been thrown our way. I know it's at 5%, but what is the harm in reinstating the 10%??
 

pretzel_man

Well-Known Member
I hear you, and value your opinion from the other side of the tracks.
I simply think the credit along with the spoils should and could be spread out more evenly through the ranks.
I'm not saying these leaders shouldn't be handsomely rewarded for their efforts, it's simply been taken way to far.
This sense of entitlement amongst these golden boys needs to squelched.
Consider it part of the process of making the operation "leaner and meaner".
If cuts and sacrifices need to be made, the top is where the process should start.
Any good leader or business owner would see it this way.
Instead it's working in reverse at UPS and it's a shame.
How can your boy Davis take an increase like this in good conscience, knowing his subordinates down the ladder have been forced to accept concessions?

http://www.forbes.com/lists/2009/12/best-boss-09_D-Scott-Davis_PA5Q.html

Take a look.... The vast majority of his compensation is in stock. Its unclear how they have calculated this. It may be future value. I don't know.

In either case, his compensation directly tied to UPS stock growth. Isn't that what we would want?

P-Man
 

Bubblehead

My Senior Picture
http://www.forbes.com/lists/2009/12/best-boss-09_D-Scott-Davis_PA5Q.html

Take a look.... The vast majority of his compensation is in stock. Its unclear how they have calculated this. It may be future value. I don't know.

In either case, his compensation directly tied to UPS stock growth. Isn't that what we would want?

P-Man

Sure, OK, no debate as to whether he has a stake in the companies success.
It's the amount of stock and at whos expense that I question.
I'll ask again, as you failed to answer this question.
How can your boy Davis take an increase like this in good conscience, knowing his subordinates down the ladder have been forced to accept concessions??
 

Lue C Fur

Evil member
Sure, OK, no debate as to whether he has a stake in the companies success.
It's the amount of stock and at whos expense that I question.
I'll ask again, as you failed to answer this question.
How can your boy Davis take an increase like this in good conscience, knowing his subordinates down the ladder have been forced to accept concessions??

Dont forget that the concessions included layoffs of 160 acft mechs...:angry:
 

pretzel_man

Well-Known Member
Sure, OK, no debate as to whether he has a stake in the companies success.
It's the amount of stock and at whos expense that I question.
I'll ask again, as you failed to answer this question.
How can your boy Davis take an increase like this in good conscience, knowing his subordinates down the ladder have been forced to accept concessions??[/quote]
I don't know... I guess because the Board of Directors thought it was the right thing to do and best for the company. The increase is in deferred compensation tied to company growth.

This is incentive compensation. No management took concessions in incentive compensation.

P-Man
 

What'dyabringmetoday???

Well-Known Member
I tend to worry about my compensation and not about any other person's compensation. It may be short-sighted but that's ok with me. Why should I worry about those above me? They show no concern when you try to offer an idea or thought on how to improve things, so there is no reason to be worried about how they want to run the show or how they are paid. The blue and white envelope shows up every week and that is good enough for me. That and all of the awesome benefits that I get to go along with that magic number in the aformentioned blue and white envelope.
 

Bubblehead

My Senior Picture
Sure, OK, no debate as to whether he has a stake in the companies success.
It's the amount of stock and at whos expense that I question.
I'll ask again, as you failed to answer this question.
How can your boy Davis take an increase like this in good conscience, knowing his subordinates down the ladder have been forced to accept concessions??[/quote]
I don't know... I guess because the Board of Directors thought it was the right thing to do and best for the company. The increase is in deferred compensation tied to company growth.

This is incentive compensation. No management took concessions in incentive compensation.

P-Man


Are you kidding???
Incentive compensation???
So what is the MIP that was discontinued for the lower level managers for 2008?
What was the 401K match that is no longer?
I guess the cancelled raises would have been windfall compensation.
No management took concessions in incentive compensation?
I'm betting there are a lot of management people that would beg to differ.
You weren't one of them were you?

I'm starting to think Pretzel Man may really be Scott Davis himself???

 

pretzel_man

Well-Known Member
Are you kidding???
Incentive compensation???
So what is the MIP that was discontinued for the lower level managers for 2008?
What was the 401K match that is no longer?
I guess the cancelled raises would have been windfall compensation.
No management took concessions in incentive compensation?
I'm betting there are a lot of management people that would beg to differ.
You weren't one of them were you?

I'm starting to think Pretzel Man may really be Scott Davis himself???

MIP was not discontinued in 2008.

401K match was not incentive compensation.

Any changes in 401k, or MIP affected everyone.

When the elimination of raises, DESPP, and 401k match were discontinued, it was explained why MIP, Stock Options, and LTIP were not changed. Those three are incentive plans.

P-Man
 
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