Executive pay and bonuses - your views

[Donkmeister]

This may seem a little unusual coming from someone who has, just today, learned his savings may have fallen into the mid-atlantic rift, but it's an issue that has hit the news even more in recent months...

Executive bonuses and high salaries... what's your view?

Is it a perk of the job to offset the risk of "one stuff-up and you'll never have another chance"?
Does it reflect the risks of high mental-stress and associated conditions (heart attacks, nervous breakdown, stroke etc)?
Or is it unfair that the average worker is on £20-30K a year, and their directors are earning £100s of thousands per year?

 

[^woody^]

Thats the whole point isn't it - a guy on top whack gets paid bonuses for generating income into the company to keep the guys on lower pay in their jobs.

Most people who disagree with the bonuses are the people on lower pay who don't get them.

No-one is going to refuse a bonus or not work harder to earn more if thats how they are paid

Its the [capitalist] system we are in - pay more for the right person, or he will work for someone else

Bonuses have nothing at all to do with stress - every worker at every level suffers stress corresponding to their work - there are more (for example) stressed out cleaners and low paid social workers than stressed executives

 

[tim west]

It gets a bit much when the top guys still get bonuses when jobs are being axed because of their bad desicions.

An analogy is comparing business to football teams and managers (who said football is a business these days?)

A manager can take over a team thats doing ok but not brilliantly but the ground work had already been done by previous managers who were dumped by too impatient owners and not giving time for the team to work properly, these new managers have come from previous teams that again were built up before they came but finally gelled whilst they were at the helm so they reaped the praise from others hard work.

Its when outside influence changes things that you see these "managers" for what they really are and if they really have the savvy to do the job that they are being paid millions to do.

 

[JohnD]

Thats the whole point isn't it - a guy on top whack gets paid bonuses for generating income into the company to keep the guys on lower pay in their jobs.

No, I don't believe that's true. The monkey at the top of the tree will cast aside his underlings if it means more money in his own pocket.

Like any grasping capitalist, market trader, hospital consultant or trades union negotiator, they are out for as much as they can get.

Being at the top they have little effective opposition to hold them back.

Have a look at this interesting link (if it doesn't work for you I can post an extract) and see how much snout-troughing directors have got away with while their companies were being driven into the ground.

http://www.investorschronicle.co.uk...d-8874-00144f2af8e8/Less-of-this-nonsense.jsp

 

[Donkmeister]

No, I don't believe that's true. The monkey at the top of the tree will cast aside his underlings if it means more money in his own pocket.

Happened to me... I was taken to one side and told by an exec chap that I was being taken off a campaign. I said "Oh, that's a shame, I thought we were doing rather well. May I ask why?" His response was an error of judgement...

"Oh, you're doing just fine, but bonus time is coming up and if I take on your tasks myself then I can pretty much guarantee top whack on my bonus this year!"...

By a curious turn of fate, he ended up somewhat discredited in the eyes of his seniors and didn't get his bonus that year. On the plus side, he's been so very very nice to me since

I would love an executive bonus, and hope one day that I will be in a position to be taking them!

 

[Bilioustrumpstaine]

Top execs deserve good bonuses for a job well done, however if they have stuffed up then they should not receive them.

 

[JohnD]

Top execs deserve good bonuses for a job well done, however if they have stuffed up then they should not receive them.

A couple of interesting points:

Most of us are paid a wage or salary for doing our job

Do we expect to get a 100% bonus for doing that job?

If we have a bonus scheme that says "you'll get £XX if you achieve YY" and we don't achieve YY for one reason or another, do we expect the rules to be changed so we get the bonus anyway?

If we're a complete numbskull who fails to do the job we were paid for, do we expect to leave with three years salary tucked in out back pocket?

Do we get to set our own pay and bonuses, with the help of a few well-placed buddies, as part of a group that sets pay and bonuses for each other?

Do we expect our buddies to say "the average pay for Drongos is a million pounds a year, we like to lead the market so our Drongo can have £1.5 million, oh look, the average has just gone up to £1.5 million, so we'll give him £2 million, oh look, the average has just gone up to £2 million, we'll give him £2 million? And the pay is shovelled at us not by our employers (the shareholders) who bear the cost of it, but by a bunch of other Drongos who gave an interest in seeing market rates for Drongos go ever upwards?

How many plumbers or technical authors get their wages set, not by negotiations with employers, but by a bunch of other serving or retired plumbers or technical authors?

 

[Chud]

Top execs deserve good bonuses for a job well done, however if they have stuffed up then they should not receive them.

Yeah but you have to decide what constitutes a 'good job' in most companies that could easily be reduce workforce (and therefore employment costs) by half - the fact that it makes all of the workforce (those now redundant and those left picking up the load) want to top themselves doesn't matter in making that decision.

Don't forget a lot of these 'bonuses' are contractual payments - golden parachutes etc.

Most of these bonuses are based on performance metrics - measurable figures, unfortunately the easiest way to hit targets in todays market seems to be to reduce costs rather than increase income so the folks at the ground floor etc. get the sharp end.

One I've personally come across was where my area at work was allocated an additional 3 headcount due to work requirements, 2 were immediately passed back as cost savings without the positions ever being filled - to my mind that's cooking the books.

 

[^woody^]

Business are run in different ways whether they are over-staffed or under-staffed or paid on performance or just a salary. But the fundamental issue, is that the business either runs itself well and survives and prospers, or it fails.

The expendable parts of any business are most often those at the bottom. But a wise business looks for the unproductive parts of it and cuts the most unnecessary costs - which may not be those at the bottom but those in the middle or top

Morals and ethics don't often come into commercial decisions. They should, but don't

If the business chooses to pay the execs bonuses and then lay the workers off to cut costs, then thats purely for the business to decide. Its a questionable practice, but it really is up to the people running the business to decide