"Pay Mix" update...

[Whatthewhat]

That's a good point and a consideration. But bosses give merit raises all the time for reasons other than performance. I've heard bosses say that they gave a larger merit raise to an employee because they knew they needed the money (sole breadwinner, just had a child, etc.). It's not right, but we all know it happens frequently.

I think that's all the more reason that, if anyone can control giving themselves a raise via stock holdings on Dec 1, and take it out of the hands of their boss, they should. Plus, even if they get smaller merit raises in the future, that merit raise is based on a larger number. It may take a number of years for the Manager with the smaller new base salary to catch up to the Manager with the larger one. That's money in the bank.

Also, the 2023 and beyond retirement benefits (8% and 5%, rising to 7%) are based off of that base salary number.

Also, they claim that they are going to re-examine the salary bands in light of this change. Well see. No matter what, I'd still rather be at the maximum salary band sooner rather than later.the

The pay bands have to be adjusted. The new structure make almost everyone maxed out of the current bands. Pay bands are set up to benefit the company and the lower paid employees. Once you get to 100+ % you are getting minimal raises and then nothing as your % in the bands pass the 120ish range.
Pay bands across corporations are set up to eventually get all employees to the same pay and the longer you stay the more income you lose over your career, compared to moving to another company and a new pay structure and maximize your raises

 

[Mplayers2006]

The pay bands have to be adjusted. The new structure make almost everyone maxed out of the current bands. Pay bands are set up to benefit the company and the lower paid employees. Once you get to 100+ % you are getting minimal raises and then nothing as your % in the bands pass the 120ish range.
Pay bands across corporations are set up to eventually get all employees to the same pay and the longer you stay the more income you lose over your career, compared to moving to another company and a new pay structure and maximize your raises

I can confirm SCS has adjusted at least one of their grade bands for sups. I believe it was around this time last year. Not sure if any other job grades were adjusted. i just hope they do the right thing.

Adjust us to The real market rate.
Allow for a merit increase the same year it is adjusted.
Stop “restructuring“ departments to pay for these objectives.

 

[Mewpew2000]

PEOPLE THIS IS A MGMT PAYCUT. Did anyone not catch that they are dissolving the Stock ownership incentive at the same time of the "reallocation or pay mix change". Mgmt gets up to a full month's pay extra if we own a certain percentage of stock. They are taking the % of that ownership incentive that you would get now and putting it into the January monthly increase. So for exampl, I now only get about 35% of that ownership incentive but now I will NEVER be able to increase that to 100%. In my case it's about a 30k pay CUT over my last years assuming I retire at 55 or it's more!!

 

[Mewpew2000]

There must be a lot of IE people in this thread as you don't understand math. A 7% reduction in MIP target does not equal a 7% raise to maintain target salary. The MIP will be applied to a higher base salary, so the percent salary increase would be less to maintain the total.

Please explain! Using an even number. If you as a supervisor make $100,000/year Salary. Then you get 17% of that yearly salary in MIP, that equals 17k MIP. How would taking that 7% from the MIP away not equal a 7% Monthly raise?

 

[Mewpew2000]

Please explain! Using an even number. If you as a supervisor make $100,000/year Salary. Then you get 17% of that yearly salary in MIP, that equals 17k MIP. How would taking that 7% from the MIP away not equal a 7% Monthly raise?

Allocated as $7,000 total divided into 12 months.

 

[Mplayers2006]

Please explain! Using an even number. If you as a supervisor make $100,000/year Salary. Then you get 17% of that yearly salary in MIP, that equals 17k MIP. How would taking that 7% from the MIP away not equal a 7% Monthly raise?

Maybe someone else can give a better example, but it relates to algebra.
It’s like 2x+2y does not equal 4xy. Or like two apples and two oranges does not equal 4 apples and oranges.
X and y are independent of one another.

Same case here. The two percentages are not based on one another, therefore, they are not related. You can’t simply take 7% from 17% and add it to a unrelated number else where and expect the end result to be “balanced”.



Old salary
100k at 17% = 117k (total compensation)

100k at 10%= 110k (total compensation)
The difference=7k

New salary
107k at 10%= 117,700 salary (total compensation)

117,700 does not equal 117k

As you can see the two total compensation numbers are not equal (1:1) which mathematically shows it is not a simple 7% increase, but less than 7%.

Again, this is due to 10% of 107k does not equal 17% of 100k.

 

[PASinterference]

PEOPLE THIS IS A MGMT PAYCUT. Did anyone not catch that they are dissolving the Stock ownership incentive at the same time of the "reallocation or pay mix change". Mgmt gets up to a full month's pay extra if we own a certain percentage of stock. They are taking the % of that ownership incentive that you would get now and putting it into the January monthly increase. So for exampl, I now only get about 35% of that ownership incentive but now I will NEVER be able to increase that to 100%. In my case it's about a 30k pay CUT over my last years assuming I retire at 55 or it's more!!

File a grie.... nevermind. You took the 30 pieces of silver.

 

[Mplayers2006]

File a grie.... nevermind. You took the 30 pieces of silver.

No need to file. Most management sell their stock once vested. As mentioned before, this is an increase for most management personnel.

More guaranteed money, and less potential money.

 

[Mewpew2000]

No need to file. Most management sell their stock once vested. As mentioned before, this is an increase for most management personnel.

More guaranteed money, and less potential money.

Negative. It's a cut. Not sure how you don't understand that. It's called math.

 

[Mplayers2006]

Negative. It's a cut. Not sure how you don't understand that. It's called math.

“ It’s called math” says the person who thinks it’s a 1:1 increase from mip to base. Lol

Just because you’re losing money does not mean we all will. Zero times 3.5% = zero

 

[John D]

Don't forget last year we got a 150% MIP. This is basically giving us the pay bump at 100% MIP. Savings there for UPS as well.

Historically the average is close to 100% so this doesn't bug me as much. However, it had been trending up the past few years. I'm willing to bet this year is 120-125%. Anytime it is over 100 is savings for company.

 

[dudebro]

The average MIP since 1955 equates to a little over 82% (1 unit). Now 100% is locked in for about 1/3 of the bonus. You can't take 150% as your base because that was a top 3 year out of 66.

The award might have more variance after the change, we'll have to wait and see.

 

[Fenris]

The average MIP since 1955 equates to a little over 82% (1 unit). Now 100% is locked in for about 1/3 of the bonus. You can't take 150% as your base because that was a top 3 year out of 66.

The award might have more variance after the change, we'll have to wait and see.

Even the shorter term with a few good years in the batch, the average has only been 91% over the last 10 years. So long term, the change should benefit management employees. Even those who wont get a large ownership based bump have a chance to make out by the impact of those who do have a lot of shares when they rework the salary ranges.

 

[Whatthewhat]

Don't forget last year we got a 150% MIP. This is basically giving us the pay bump at 100% MIP. Savings there for UPS as well.

Historically the average is close to 100% so this doesn't bug me as much. However, it had been trending up the past few years. I'm willing to bet this year is 120-125%. Anytime it is over 100 is savings for company.

The earnings call recap. Carol & Newman said, MIP is tracking at 100%. Wouldn’t except it to be above that.

 

[brownsolider]

I would prefer to keep the old model. Can never assume big decisions like this are all made for the benefit of employees. The company benefits in some way as well.

1. No longer have to pay out ownership incentive as someone noted
2. UPSers have to stay at company the entire 12 months to fully realize what used to be the MIP cash bonus

Regarding point 2, I had former co-workers cut somewhere else in April/May. Can't do that anymore.

In addition, if layoffs are announced at some point next year (perhaps after annual earnings call?) for like Spring/Summer, then those affected may not realize their full bonus either as it is now prorated into their salary.

 

[Fenris]

I would prefer to keep the old model. Can never assume big decisions like this are all made for the benefit of employees. The company benefits in some way as well.

1. No longer have to pay out ownership incentive as someone noted
2. UPSers have to stay at company the entire 12 months to fully realize what used to be the MIP cash bonus

Regarding point 2, I had former co-workers cut somewhere else in April/May. Can't do that anymore.

In addition, if layoffs are announced at some point next year (perhaps after annual earnings call?) for like Spring/Summer, then those affected may not realize their full bonus either as it is now prorated into their salary.

This is just wrong.

1) The company will be paying ownership in perpetuity for those who actually have stock today. Most people don't so the company already doesn't shell out anywhere near as much as it might have to.

2) You will be getting the 'bonus' in your paycheck that you previously would have had to wait until the following year to receive. If you leave in the spring / summer - your are getting 3 to 6 months of salary that contains 'bonus' money under the new plan. Under the old plan you would have gotten nothing if you weren't on the books on 12/31. The MIP money you receive in a given year is the bonus for the prior year. You also wont lose the RPUs you have on the books, like you would have in the old plan.

As its laid out, the only way the company makes out is if the salary ranges don't adjust similar to the average change by band, including the ownership. Gains from that would take years to generate much value for the company but new employees / promotees would miss out on some then.

 

[Mplayers2006]

You can’t make everyone happy. Overall it’s a win for most of us.
Less risk and more guarantees towards the employee.

Only cons I seen are the OIP is being disbanded, which has a low participants. And as someone commented, we actually lose on the bonus amount if the MIP factor is greater than 100%. But historically the MIP trends less than 100%. If these are the cons, then carol and the team did a great job with this initiative.

 

[YourBoss]

I think the biggest slap in the face is that the people presenting this are all sitting in their house.

 

[burrheadd]

File a grie.... nevermind. You took the 30 pieces of silver.

 

[John D]

Yessir.