At 11:12 22-7-01 -0500, Erik Reuter wrote:
>On Sun, Jul 22, 2001 at 05:39:37PM +0200, J. van Baardwijk wrote:
> > >3) How about having public companies disclose salaries and compensation
> > >for everyone, not just the officers?
> >
> > I don't think that will be very helpful, since it's the officers who get
> > the huge raises, not the workers.
>
>It could help the workers to negotiate their salary, and to
>compare their salary to what others are making for doing the same
>job. Transparency.
This works quite well when demand for workers exceeds the supply, but it
won't work in a recession. When there are a lot of applicants for only a
few jobs, you don't have much of a bargaining position as a worker. Believe
me, I've been there.
> > How about option #5: everybody, from the cleaning lady all the way up to
> > the president of the board, gets the same raise. If the workers get 4%,
> > then the management also gets 4%. It prevents the management from
> excessive
> > self-enrichment, and might lead to somewhat higher raises (say, 5-6%
> > instead of 3-4%).
>
>I don't like this option. It does not leave room for some people to get
>rewarded more if they provide a greater contribution.
Well, then we'll throw in a bonus for people who provide a greater
contribution. The tricky part of this, however, is coming up with a
defition of "greater contribution". Does a manager contribute more simply
because he's a manager? Or does "greater contribution" mean that one worker
was considerably more productive than his co-workers? In that case, what is
the definition of "considerably more"? And how do you measure it?
> > Option #6: link the raises for the officers to the increase/decrease
> > in profits. If the company made 7% more profits this year, as compared
> > to last year, then the officers get a 7% raise. This must be applied
> > in the other direction too, of course: if the company saw a 7% drop in
> > profits, the officers' pay also goes down 7%.
>
>Not bad, but I was thinking that maybe share price would be a better
>thing to link to rather than profits. It should encourage at least
>slightly longer term thinking.
Don't know how things are going on the US stock market, but linking share
price to salary would have turned several managers in The Netherlands into
very poor people over the last 16 months.
Allow me to demonstrate. Here are a few examples of share prices on March
15, 2000 and June 20, 2001 (March 15 was when I started keeping track of
share prices; June 20 was last Friday):
Getronics : went from EUR 88.70 to EUR 3.30 --> minus 96.2%
KPN Telecom: went from EUR 124.00 to EUR 5.36 --> minus 95.7%
UPC : went from EUR 209.20 to EUR 1.40 --> minus 99.3%
Jeroen
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