The truth behind the 1.6 MIP for this year

brown1522821

New Member
The not so slow erosion of management compensation continued with the disappointing MIP factor this year. However, the compensation committee made sure the senior managers grade 020 and above (region level staff managers, district managers, and a slew of corporate managers) recieved a huge increase in total compensation this year while the rest of us took a 30% cut to our MIP award. This cut came in a year of record revenue and record profit.

The compensation committee and the management committee and the board of directors approved a new incentive plan for these grade 20's and up. Like the fuzzy metrics of the "new and improved" MIP plan, it is based on fuzzy metrics that allows the comp committee to set the payout at whatever level they want it to be.

Under this plan, the target for a grade 20 manager is a bonus of 50% of their base salary if the company hits these fuzzy goals. The range starts at 50% for 20's and goes up to 250% of salary for the senior managers on the mgt committee. Of course this is all on top of the regular MIP they already recieve. On to 2006.....

I work in corp. accounting/finance and so I can tell you factually that this new plan will payout at 110% of goal for 2006. That means each grade 20 manager will recieve a bonus of 55% of their base annual pay. District managers will get 110% of their base and so on.

The question I think we as UPSers and shareholders and all outside shareholders should be demanding an answer to is

"How can there be such a misalignment of goals for one incentive plan to take a 30% reduction while another plan pays out 110% of goal?" My opinion is this is just a way to cut costs by cutting MIP while still continuing to reward senior managers and in fact increase their compensation. I think we have lost our partnership culture and greed is rampant at 55 Glenlake. Voting in a new plan in the dark of night as they did with this plan and basically saying anyone below a grade 20 is not valued and then redistributing the incentive dollars through this new plan that rewards only the few while cutting the total comp for the managers in the field working harder and longer for less would have been unheard of in the UPS of Jim Casey.
 

nhguy

Well-Known Member
It's a sad state of affairs. I can only hope that the rumors of an additional buyout come true. The funny part is that with a straight face they had the nerve to say, the MIP is what it is!!! I can understand that most large corporations have hugh bonuses for top level management, but UPS has always prided itself on the partnership concept that we were all equal and in this together.

If you didn't realize that we are truely a public company and that the culture has changed, get your head out of the sand! They really don't care what the front line thinks.

Rumor is that a region manager confronted the board and told them how they were not in touch with the morale on the front lines and he was told if he didn't like it he could leave. He retired!
 

tieguy

Banned
It's a sad state of affairs. I can only hope that the rumors of an additional buyout come true. The funny part is that with a straight face they had the nerve to say, the MIP is what it is!!! I can understand that most large corporations have hugh bonuses for top level management, but UPS has always prided itself on the partnership concept that we were all equal and in this together.

If you didn't realize that we are truely a public company and that the culture has changed, get your head out of the sand! They really don't care what the front line thinks.

Rumor is that a region manager confronted the board and told them how they were not in touch with the morale on the front lines and he was told if he didn't like it he could leave. He retired!

would that retiree be out of the ECR by any chance?
 

tieguy

Banned
Trying to understand "their" perspective I'm sure there is some fear that we may lose some of our top players to the competition if we don't overcompensate them. Interesting to think a District Manager makes what about 15 K a month. 180 a year. 110 percent of that about 198,000 in bonus. Not bad.
 

browniehound

Well-Known Member
The whole thing is disgusting. What a slap in the face for front line management.

It really Is. My sup. knows the ins and outs of how a UPS center runs. He gives his blood, sweat, and tears to try and make it run (thats his job) The problem is he has no power to make it run smoothly, so it doesn't. I feel this guy would go to bat for me, so I would do the same for him. Problem is, we're in the same boat paddling upstream. I'm sorry, but its my opinion that the frontline management are the ones that deserve the huge bonuses, not the cutbacks. But what the hell do I know? I'm not the one with the harvard MBA.:confused:1
 
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randomNER

Guest
would that retiree be out of the ECR by any chance?

Miele unexpectently retired a couple weeks ago...He's a very well respected guy, I could see him making a stink about screwing the front line out of their award....
 
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avoidbrown

Guest
What is even worse, they are getting bonuses for cutting the budget... The best way for a level 20 and higher to cut the budget, is get rid of people, especially managers(19-) from their budget. If they cut it enough, they get a 150% salary stock bonus. All they are doing is making sure they get their "due" before the jump out of the company. See the stock with UPS isn't what it used to be. Telescoping is dead, hypo+ are a thing of the past, all you have is these share that they give you, now a lot of them are freakin IOU's(RSU's). When you try to sell them, they freak-out. The have destroyed the "partner" concept. It is only a matter of time before DHL and some new startups turn big brown on its side.
 

DorkHead

Well-Known Member
I am not in mngmt but I really don`t see anything wrong with the top guys getting a bonus equal to their base pay. Compared to other large corporations, this doesn`t seem excessive. 15 yrs ago, it was mandatory that a on car sup would have to be at the center until the last driver was off the road. Now, with the exception of peak, there is never a sup there when I get back. Just a part timer that really knows very little of what to do if a serious issue arises. I personally think lower mngmt is compensated fairly.
 

tieguy

Banned
Miele unexpectently retired a couple weeks ago...He's a very well respected guy, I could see him making a stink about screwing the front line out of their award....

okay thought it might have been herring out of the ECR who also retired recently. Thats two region managers in a short time span. Not a positive sign.
 

tieguy

Banned
I am not in mngmt but I really don`t see anything wrong with the top guys getting a bonus equal to their base pay. Compared to other large corporations, this doesn`t seem excessive. 15 yrs ago, it was mandatory that a on car sup would have to be at the center until the last driver was off the road. Now, with the exception of peak, there is never a sup there when I get back. Just a part timer that really knows very little of what to do if a serious issue arises. I personally think lower mngmt is compensated fairly.


Your not all wrong. The irony would be to drop the frontline compensation by 30 percent while jacking up the upper echelon by 110 percent. It defys logic to believe the front line management group had a bad year while the upper ranks had a great year.
 

DorkHead

Well-Known Member
Tieguy, perhaps the 30% reduction is to compensate for the increase in staff. My center team consists of 1 center manager, 3 on car sups, 1 preload sup, 1 cust serv. All FULL timers and 3 part time office support personnel. That`s 9 people for a 40 car center. In the late afternoon it drops to 7. Maybe their line of thinking is that there is less to do now with the additional staffing, therefore, the lower MIP.
 

brownmonster

Man of Great Wisdom
Walking around playing pocket pool and getting double your salary in bonus and I'm supposed to think we can't compete because of my wages? Lopping off routes and spanking the working man any clown can do. I suppose the fool that designed PAS and this "No Left Turn" spin got a triple bonus.
 

Retired22

Senior member
Brown1522821
When did this new compensation program start? When was it announced? If this is true, the front line mgrs and sups really get
the shaft??
 

constructively dissatisfi

Well-Known Member
okay thought it might have been herring out of the ECR who also retired recently. Thats two region managers in a short time span. Not a positive sign.
I don't think Herring retired. He was named as the head of Sales at Corporate if I'm not mistaken. I don't think he has any background in sales however.
 

eagleye6

Member
brown, the story we heard about the 1.6 mip was that the powers that be saw that we were not going to make our wall street number so they decided to raid the mip piggy bank. they literally stole .8 from each of us to make themselves look good. whatever happened to integrity and reporting the correct numbers and being held accountable for them? what's the difference between that and a center manager shaving time off drivers' time to run scratch. sad, sad state of affairs.
 

moreluck

golden ticket member
eagleeye6........"The story we heard..."

Unless you have proof, it is just a STORY. That's quite an accusation and I find it to be totally unbelievable. Sounds like you heard a guy like Cliff Clavin spouting off like he knows it all.

An accusation like that involves criminal activity.......accounting procedures are under a microscope in today's business world. I guess it could happen.....but I think it didn't.
 

tieguy

Banned
Tieguy, perhaps the 30% reduction is to compensate for the increase in staff. My center team consists of 1 center manager, 3 on car sups, 1 preload sup, 1 cust serv. All FULL timers and 3 part time office support personnel. That`s 9 people for a 40 car center. In the late afternoon it drops to 7. Maybe their line of thinking is that there is less to do now with the additional staffing, therefore, the lower MIP.

I imagine your sharing the one BD person.

key point again. Lower level compensation dropped by at least 30 percent while the uppers raised theirs. How can we have a bad year while they had a good year?

Not only that but with those folks raking in all that loot don't think the teamsters negotiating committee has not noticed.
 

Dfigtree

Well-Known Member
There is no partnership since UPS went public. There are only shareholders who are quarter in and quarter out disappointed by the CEO's lack of ability to provide return on investment. MIKE MUST GO!
 
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