401K match removed?

[~bs]

I work for a university with an absolutely enormous endowment. Also, our tuition is outrageously high for undergrads and MS students. Where the heck does all that money go?? None was saved?

Also, yes of course I don't mind losing the retirement contributions to save jobs, but the email indicated that layoffs may be necessary as well.

College industrial complex is among the worst for promoting bloated unnecessary expenditures, all on the backs of college students and taxpayers.

[LivingAlmostLarge]

Tons of CEOs that are millionaires are taking $1 in salary, it really all depends.

The divide is growing between CEOs and peasant workers because the scale of the businesses are also growing along with the complexity. It's a result, not the cause. Tell the DOJ to break up all the companies into tiny mom and pops again, and you'll see the salaries also take a nose dive.

There will be no revolt as long as the powers in charge keep printing money and doling it out to the poor. Why do you think they were so quick to rush a stimulus plan through? Why do you think there's so many social nets? You remove all of these things, and there WILL be literal pitchforks at their doors.

yeah but their salaries are from stock and bonuses not the salary. That's why Bob Iger is $47million in "total comp" not salary for year. It's just that it's over the top extreme. I think it used to be 20-30x but not it's more like 500-1000x which makes the income divide greater. I'm just point out that it's not exactly equitable. And wouldn't a CEO not taking compensation for a year pay for everyone's 401k match?

[~bs]

yeah but their salaries are from stock and bonuses not the salary. That's why Bob Iger is $47million in "total comp" not salary for year. It's just that it's over the top extreme. I think it used to be 20-30x but not it's more like 500-1000x which makes the income divide greater. I'm just point out that it's not exactly equitable. And wouldn't a CEO not taking compensation for a year pay for everyone's 401k match?

If the company grows 1000x bigger, salaries will also grow bigger as well. It's a free market. In other ideologies, compensation is limited to "fair" levels instead of fair market levels, but that's not what we do in the US, and not what made the US the economical superpower that it is, and not what makes US companies so dominant on the global stage as they are. It's interesting you're bringing up disney up as an example. During the great recession, people were afraid disney was going BANKRUPT, that's how badly they were doing. Yet they came out of the crisis under his guidance and turned into the global powerhouse they are today. Just comparing 2018 to 2019, Disney's revenue grew from 59 billion to 69 billion. That's not worth a measly $47million in total compensation? Instead of Iger, you put Mark the maintenance manager in charge with $100k salary, and Disney likely wouldn't even exist today.

RE 401k match. It doesnt work like that. There isn't simply a big bucket of money that both the 401k and exec compensation is pulled out of. But if you want to use that analogy, imagine that bucket has a huge leak at the bottom, and the company can't let the bucket go empty. So in addition to stopping the leak, they should adopt multiple strategies, including limiting exec compensation, pay cuts, furloughs, benefits cut. People also don't realize that in a large company, most of the savings will come from cuts company wide and exec salary cuts to $1 is mostly symbolic. Example, citi group cuts during the great recession was 50,000. That's probably more than 5 BILLION of reduced costs every year.

[LivingAlmostLarge]

If the company grows 1000x bigger, salaries will also grow bigger as well. It's a free market. In other ideologies, compensation is limited to "fair" levels instead of fair market levels, but that's not what we do in the US, and not what made the US the economical superpower that it is, and not what makes US companies so dominant on the global stage as they are. It's interesting you're bringing up disney up as an example. During the great recession, people were afraid disney was going BANKRUPT, that's how badly they were doing. Yet they came out of the crisis under his guidance and turned into the global powerhouse they are today. Just comparing 2018 to 2019, Disney's revenue grew from 59 billion to 69 billion. That's not worth a measly $47million in total compensation? Instead of Iger, you put Mark the maintenance manager in charge with $100k salary, and Disney likely wouldn't even exist today.

RE 401k match. It doesnt work like that. There isn't simply a big bucket of money that both the 401k and exec compensation is pulled out of. But if you want to use that analogy, imagine that bucket has a huge leak at the bottom, and the company can't let the bucket go empty. So in addition to stopping the leak, they should adopt multiple strategies, including limiting exec compensation, pay cuts, furloughs, benefits cut. People also don't realize that in a large company, most of the savings will come from cuts company wide and exec salary cuts to $1 is mostly symbolic. Example, citi group cuts during the great recession was 50,000. That's probably more than 5 BILLION of reduced costs every year.

Hertz going bankrupt but they paid their executives like $9 billion in bonuses? How is that right?

[~bs]

Hertz going bankrupt but they paid their executives like $9 billion in bonuses? How is that right?

Quick search shows $16 million paid to key management as retention bonuses. Not sure where you're getting $9 billion from. It's rather pointless to pull random companies out of thin air to fuel your argument about executive compensation because some executive bonuses and salaries will be justified and well paid, and others wont. Fact of life, free market. Like I already said in the post above $47Mil in total compensation is peanuts compared to a 16% increase $10 BILLION in revenue in a single year.

The shareholders (owners) of the company elect board members who oversee executive management according to company bylaws. It's their right to compensate executives in a way they feel is in the best interest of the company. If they screw up, then the company goes bankrupt, which is the ultimate consequence for mismanagement. Life moves on, another company takes over. To be honest, I would say the retention bonus it's a smart move... because as the ship is taking on water, the last thing you need is for the officers to be tempted to flee via life boat. A management shakeup at this time would be hugely disruptive, and retention of key management gives the company the best chance to reorganize and pull out of this mess leaner and more well positioned.


https://www.reuters.com/article/us-h...-idUSKBN2322AS

(Reuters) - U.S. car rental company Hertz Global Holdings ( HTZ ) said on Tuesday it has paid about $16.2 million in retention bonuses to a range of key executives at the director level and above, days after the company filed for bankruptcy protection.

The company paid President and Chief Executive Officer Paul Stone $700,000, and Executive Vice President and Chief Financial Officer Jamere Jackson $600,000 as retention bonuses, Hertz said in a filing to the U.S. regulators.

[james.hendrickson]

At one point bank shareholders were liable for damages or losses due to borrowers. Some people feel that with the FDIC and current federal bailouts we've basically removed the incentives for company ownership and management to act in a responsible manner. In other words, companies can afford to pay management huge bonuses because Uncle Sam will give them money if things go sour.

[~bs]

At one point bank shareholders were liable for damages or losses due to borrowers. Some people feel that with the FDIC and current federal bailouts we've basically removed the incentives for company ownership and management to act in a responsible manner. In other words, companies can afford to pay management huge bonuses because Uncle Sam will give them money if things go sour.

Yup, and that's the problem with government intervention (or expected government intervention) and allowing companies to get so large without antitrust regulation. It's like a gambler willing to push all their chips on red because someone will bail him out if he loses. If you look at the airlines and other big businesses, they were literally expecting a strings-free billion dollar handout.

[disneysteve]

If the company grows 1000x bigger, salaries will also grow bigger as well. It's a free market.

Sure, but the problem is that only the executive salaries are growing bigger. The worker bees are getting the same money, pretty much, as they've always gotten. Minimum wage hasn't gone up since 2009. That's where there is the growing income inequality. Companies are making record profits year after year after year and paying ever-more lavish bonuses to the upper echelon but not sharing the wealth with the regular folks. If you want to give your CEO and VPs a raise, go right ahead, but shouldn't you also give everyone else a raise, too?

[~bs]

Sure, but the problem is that only the executive salaries are growing bigger. The worker bees are getting the same money, pretty much, as they've always gotten. Minimum wage hasn't gone up since 2009. That's where there is the growing income inequality. Companies are making record profits year after year after year and paying ever-more lavish bonuses to the upper echelon but not sharing the wealth with the regular folks. If you want to give your CEO and VPs a raise, go right ahead, but shouldn't you also give everyone else a raise, too?

Sure, but that obviously is the choice of an individual company. There are many companies that thrive on the minimum wage model, and others that do not, paying entry level employees far above minimum wage and promoting ESOP and other type of ownership programs. It really is an individual's choice to stay working for MCD as minimum wage fry boy as a career or try to become something more. Nowadays there are unique challenges in the job market, but you could probably say the same for virtually any previous period of time. The impact to the company of fry boy adding the right amount of salt versus too much or too little simply does not compare to a 10 BILLION dollar increase in revenue or on the flip side, mismanagement causing 10 BILLION dollar loss in revenue caused by cheaping out and putting fry boy in charge of the whole shebang.

[disneysteve]

Sure, but that obviously is the choice of an individual company. There are many companies that thrive on the minimum wage model, and others that do not, paying entry level employees far above minimum wage and promoting ESOP and other type of ownership programs. It really is an individual's choice to stay working for MCD as minimum wage fry boy as a career or try to become something more. Nowadays there are unique challenges in the job market, but you could probably say the same for virtually any previous period of time.

The current period is the longest stretch since 1938 that the minimum wage hasn't been increased. I'm not a fan of the "we have to raise it to $15 tomorrow" theory, but I also don't think we can leave it unchanged indefinitely. The income inequality gap just gets worse and worse as a result. That has far-reaching effects. We often talk about college costs, for example. When I went to college in the 80s, it was reasonable to work your way through. Today, however, tuition is 5-6 times higher but wages for the typical jobs a student could pick up have less than doubled so the math no longer works, and that's just one example. We often hear that young people aren't buying cars like they used to. Maybe that's because the price of a car has steadily increased but the income from an after school job hasn't. And obviously supporting a family is a lot harder if you're a worker on the lower end of the scale.

[LivingAlmostLarge]

Sorry 9 million in bonuses. I think that it's ridiculous you can get any bonus when your company declares bankruptcy.

[disneysteve]

Sorry 9 million in bonuses. I think that it's ridiculous you can get any bonus when your company declares bankruptcy.

The optics are certainly awful. However, we also don't know the details. My bonus at work is clearly spelled out in my contract. The company is legally obligated to pay it to me or else they'd be in breach of contract. Even if they have an awful year, which they probably will due to COVID, they still need to pay me my bonus.