CEO Will Live on $70,000 Worker Wage, Thinks His Life Will Be Luxe Enough
Now there may be people who think that i am crazy for this, but I applaude and admire this guy. He sees the issue, and he is focused on his company first. He knows that a company is more than the CEO, it is a sum of all your workers. He's not pulling a20th Century Motors thing, he isn't letting them decide "who needs it", he is sharing it across the board. Very logical, and will make his employees incredibly loyal, as they know he understands what is going on throughout the company.
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I started my career job in 91. Till about 94 every employee had profit sharing and some stock options. Then the grunt jobs lost these, then it creaped up and by 2000 only management had stock and bonus plans. Everyone can thank Jack Welch (CEO and author of Winning) for that BTW.
I see this as someone taking a shift back the other way. Its a good direction and I hope it is hugely successful for him and then mimicked by others after he proves it helps with success.
What should also be noted was that during those years, the employees were rewarded for their successes with quarterly profit-sharing checks that were frequently as large as a paycheck in and of themselves. As a result, there was no lack of people who would volunteer to get a last-minute shipment out the door and no lack of those who would volunteer to work weekends or overtime to help debug a problem because they were vested in the outcome!
That changed after a couple of years of Lou Platt. He did away with the Division carnivals (massive affairs hosting thousands of families with food, games, and entertainment all paid for by HP) and limited profit sharing to managers. Between Platt and Fiorina, they also did away with the employee purchase program which enabled HP employees to get HP gear at cost, and then further limited profit sharing to just executive management. Then they started charging for office supplies, outsourced all their maintenance and cafeteria workers, and then finally their manufacturing divisions altogether. And as each employee benefit dwindled, so did the quality of the products.
The first massive layoff under Fiorina (which claimed my father as a casualty) was all about benefits - healthcare to be specific. You see HP was liable for the healthcare costs of any employee who had retired with >20 years of service until they died. They didn't want to be saddled with this cost, so they laid off their best and most knowledgeable employees in one fell swoop. Future layoffs similarly claimed their victims from the ranks of the best, leaving an entirely new crew of employees who knew nothing of the HP Way - nothing of the values of Hewlett and Packard.
To me, it is an instructional tale of how to build and then destroy one of the most creative legacies of industry in modern times.
What is just staggering to me is that in doing so they totally ignored the fact that up until this policy was put into place, HP had been enjoying frequent stock splits and profound profitability for both employees and investors. I worked there as a summer intern and as a full employee (even though I was just there for the summer) I was eligible for quarterly profit-sharing. I knew of a lot of people in our city who bought cars, swimming pools, boats, etc. off those quarterly profit-sharing checks. It is no coincidence that under Lou Platt eligibility for those got restricted to managers and under Carly they were eliminated all together. It is also no coincidence that during that time HP stopped being a manufacturer and became a designer and marketer. There is something about putting out a quality product with your own two hands that can not be duplicated.
Perhaps he is contemplating taking his business public? Perhaps this will get it recognized enough to make the public offering quite successful.
Yes, it was a crony decision - she was groomed for the position by Lou Platt - former HP CEO, though how that happened when she wasn't even an employee of HP is beyond me.
I'm sure that many of us believe that helping the poor and disadvantaged is the christian thing to do. At the same time we need to recognize that there in lies the slippery slope of welfare. Many of us believe that helping educate the disadvantaged, providing training or tools that they can use to improve their lot in life is the more realistic approach. Granted, this approach requires each person to become responsible for improving his/her situation. Fortunately we live in a country where we still have the freedom (for now) where we can be the masters of our own destiny. We can strive to become more, to learn more and to do more. Welfare handouts do nothing to solve the fundamental problem and research has shown that these handouts perpetuate the dependency on government to solve their problems. Our future is in our own hands and we are free to do with it as we please.
Ain't that the truth!!!!!!!!!!!!!
+ Many for this post..............thanks, kh
I wonder about "humanities studies". Is there a pecking order for humans? Will the CEO by surrendering pay differential also lose the respect of many in the work force? Maybe. In most human organizations there is order, chain of command, or white and blue collars. If he surrenders the apparent differences, what will the micro social outcome be? What happens when a General takes off his stars?
I hope the media reports the outcome as certainly as they have the headline.
and I have apparently always been.--Never mind,
a man should be paid what he's worth, and accord-
ing to what he produces. If he produces more than
that and is worth more, it seems kind of foolish
to me. But I didn't hear the story, so if the com-
pany is in trouble, and he is doing it to save it,
maybe there is some reason for it.
The mainscream press will use this example for why the minimum wage should be raised to $25/hour. "See, this guy pays his floor sweepers $35/hour. And he's glad to do it." If the company goes bankrupt or is sold for a bundle 2 months after the story airs doesn't matter to them. They never go back to close the loop on their stories. It's all about creating false perception long enough to get voters to go along with another bad idea.
I did misread it the first time, his managers can make more than 70K, that's just what he's going to take and what he's going to establish at the low end.
And, I agree with you, he's going to really mess with their lives.
The people at the clerical level will do well -- as long as he doesn't sell the company or otherwise end the game which will leave them in an awkward place looking for work with an expectation that they should be paid 70K. I know a couple of people who were really messed up in the dot com era by getting salaries that they couldn't get again when people weren't willing to pay high dollar for anyone who could turn on a computer.
And, of course, it will feel really good for people to be working hard and watching others screw around -- knowing everyone gets paid the same.
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