Mike's answer

[had_enough]

The reason it is one answer is because Mike only allowed 1 question per stockholder which he did not state until the end when he was ignoring my raised hand and those from some of the unhappy UPS Store owners who had previously asked a question too. There was maybe a maximum of 50 shareholders at the meeting (maybe 10 asked a question) and the question and answer session lasted maybe 15 minutes. I don't see why he could not answer more shareholder questions.

Question:
Given the record profit and the 10.8% increase in profits (that # given in earlier part of mtg as an exceptional #) how do you justify to the front line management cutting the MIP by 1/3 while giving the grade 20+ large bonuses?

Answer:
The historical average for MIP is 1.6 and that is what the MIP was last year. It was 2.4 the year before but not all the goals were met so it was 1.6 which is the historical average and we are pleased about that. (exceptional profits but average bonus). As for the grade 20+, they took a look at the industry standards and they were below the average so they were given "modest" bonuses to bring them up to the standard. (did not mention that ft sups and managers are well below industry standards and that cutting the MIP by 1/3 just made them lower)

Mike's answer was very polished and I was actually impressed how well he spun this to make it sound good without hesitation. This is also not word for word because my shorthand could not keep up with his answer.

I'll check with the SEC about whether UPS can limit the number of questions. Hopefully next year get to some of the other questions like what is the plan to fix the horrible employee (hrly + mgmt) morale and some other questions I had prepared.

 

[hangin455]

Good for you Had!
Don't know how you managed to be there (day off, vacat,etc) but it was refreshing to hear that someone had the guts to speak up about the inequities in pay. I personally feel that the 20's and up are highly marketable outside UPS and this is how they're trying to hang on to them. If the 14's and 16's could display the same lateral mobility we'd be better compensated too.
If you can't move the stock price by making piles of cash every quarter, let's start giving it those who actually make it.

 

[local804]

With 3/4 the center team running offroutes and fixing PAS messups, I think that a 1/3 cut in the MIP is well justified. I think that the same monkey that could load any assignment could also drive all over the town giving offroutes to drivers and bring out all the late work. With a chain of command a mile long, why shouldnt the grade 20`s get a modest bonus to keep them up to standard. Lets stop being greedy here people.

 

[ihadit]

With 3/4 the center team running offroutes and fixing PAS messups, I think that a 1/3 cut in the MIP is well justified. I think that the same monkey that could load any assignment could also drive all over the town giving offroutes to drivers and bring out all the late work. With a chain of command a mile long, why shouldnt the grade 20`s get a modest bonus to keep them up to standard. Lets stop being greedy here people.

I agree totally. It appears the sups wear their browns more than suits as they are always on road running off o/rtes, missloads,etc. Our preload supv has been working 14.5 hour days 3days this week just to correct the preload mess. A direct quote from our recently transferred DM, "..any monkey can do this job, if we are that busy hire more monkees.." Starting to think he was referring to the 'suits'.

 

[local804]

"it is, what it is"

 

[Analyst]

...As for the grade 20+, they took a look at the industry standards and they were below the average so they were given "modest" bonuses to bring them up to the standard.

Why should they be brought up to standard? The return on investment they provided for investors over the last 7 yrs fell extremely short of the market standard. Shouldn't their compensation match their performance?