View Poll Results: How would you balance stockholder/employee interests?

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  • $0 pay raise for employees 20% payout for shareholders

    0 0%
  • Raise pay to $18,850 15% payout for shareholders

    2 22.22%
  • Raise pay to $21,140 12% payout for shareholders

    2 22.22%
  • Raise pay to $22,620 10% payout for shareholders

    2 22.22%
  • Raise pay to $26,443 5% payout for shareholders

    1 11.11%
  • Raise pay to $28,716 2% payout for shareholders

    2 22.22%
  • Raise pay to $30,231 0% payout for shareholders

    0 0%
  • Raise pay to $34,019 5% loss to shareholders

    0 0%
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Thread: Balancing Act

  1. #1
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    Balancing Act

    You have just been hired CEO of an established company. The company has been showing meager profits for the past 10 years ranging from -5% thru 5%. This year you are anticipating a 20% profit which equates to $100,000,000 due to an improvement in the economy.

    Your company has 8,250 employees. The top 20% of your employees are very well paid. The bottom 80% are all making $15,080 per year and have been for the last 5 years. This year is different. The economy is better and these employees may leave for better opportunities. You also may have trouble hiring new employees if you set the wage too low. Your company by-laws states that you can only change wages once a year which is today.

    How do you balance making the stockholders happy with generous profits and keeping the employees happy with generous wages?

    Please wait for the poll.

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    Re: Balancing Act

    The shareholders are doing fine, its the people we should be worrying about. With the economy doing better, the company needs to keep its most valued assets from leaving. The shareholders will stay as long as the company is doing well, the employees are indifferent to that fact. 2% shareholder payout is the way to go.
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    Re: Balancing Act

    None of the above.

    Use the extra profits you get for this year to introduce greater automation and cost savings for the future. Also keep some of it as a reserve. If the company is in a non-right to work state, then use the extra profit to move the companies headquarters and as much of the labor to a low tax/right to work state.
    Only a fool measures equality by results and not opportunities.

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    Re: Balancing Act

    Quote Originally Posted by vasuderatorrent View Post
    You have just been hired CEO of an established company. The company has been showing meager profits for the past 10 years ranging from -5% thru 5%. This year you are anticipating a 20% profit which equates to $100,000,000 due to an improvement in the economy.

    Your company has 8,250 employees. The top 20% of your employees are very well paid. The bottom 80% are all making $15,080 per year and have been for the last 5 years. This year is different. The economy is better and these employees may leave for better opportunities. You also may have trouble hiring new employees if you set the wage too low. Your company by-laws states that you can only change wages once a year which is today.

    How do you balance making the stockholders happy with generous profits and keeping the employees happy with generous wages?

    Please wait for the poll.
    If I am a typical CEO for a large company,I give myself an enormous bonus, give my top tier cronies a huge bonus, provide just enough incentive to my shareholders to keep them happy, give middle management a free coupon for a dinner at Applebees,and tell the rank and file employess that they will just have to tighten their belts,take that small reduction in pay with no bennies and be thankful they have a job.
    "you're better off on Stormfront discussing how evil brown men are taking innocent white flowers." Infinite Chaos

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    Re: Balancing Act

    Quote Originally Posted by Gardener View Post
    If I am a typical CEO for a large company,
    Are you a typical CEO?

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    Re: Balancing Act

    Quote Originally Posted by DVSentinel View Post
    None of the above.

    Use the extra profits you get for this year to introduce greater automation and cost savings for the future. Also keep some of it as a reserve. If the company is in a non-right to work state, then use the extra profit to move the companies headquarters and as much of the labor to a low tax/right to work state.
    This sounds similar to the first option. What is difference between what you said and Option 1?
    Last edited by vasuderatorrent; 05-11-14 at 01:51 PM.

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    Re: Balancing Act

    Quote Originally Posted by iacardsfan View Post
    2% shareholder payout is the way to go.
    Is that legal? The shareholders could have invested in a different company if they knew they would only earn 2%. I feel that you are shirking your responsibilities. You are only making the decision for the year ahead. After that year, you can be fired. The new CEO may fire all of the employees. In my opinion you are not looking out for the shareholders or the employees. You are required to protect them both.

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    Re: Balancing Act

    Quote Originally Posted by vasuderatorrent View Post
    Are you a typical CEO?
    No. I am a very much atypical CEO.
    "you're better off on Stormfront discussing how evil brown men are taking innocent white flowers." Infinite Chaos

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    Re: Balancing Act

    Quote Originally Posted by vasuderatorrent View Post
    You have just been hired CEO of an established company. The company has been showing meager profits for the past 10 years ranging from -5% thru 5%. This year you are anticipating a 20% profit which equates to $100,000,000 due to an improvement in the economy.

    Your company has 8,250 employees. The top 20% of your employees are very well paid. The bottom 80% are all making $15,080 per year and have been for the last 5 years. This year is different. The economy is better and these employees may leave for better opportunities. You also may have trouble hiring new employees if you set the wage too low. Your company by-laws states that you can only change wages once a year which is today.

    How do you balance making the stockholders happy with generous profits and keeping the employees happy with generous wages?

    Please wait for the poll.
    The way I figure it at a 10% share holder payout, the employees also receive 10% increase for the last five years that there were no increases. That is a bit disproportionate in the favor of workers as the shareholders haven't been making returns however the capital increase of their share value has probably risen substantially and a 10 percent return is an acceptable return on investment. Also the retention of an experienced workforce is worth higher future returns if business continues to grow. Bottom line... treat workers fair (not excessive) and the returns will be there in season.
    "It is only when men contemplate the greatness of God that they can come to realize their own inadequacy." Jean Calvin

  10. #10
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    Re: Balancing Act

    None of the options offered is "best". What you have described is an (expected) extreme spike in sales volume which may (or may not) last for a while but does not indicate any sort of trend.

    Based on expectations do nothing, but if it actually occurred then: Pay the shareholders a normal high yield (as you did in 5% profit years) and give the employees a one time bonus (profit sharing) of the same percentage as the sharehollders got (5% of gross pay?). Bank the additional proceeds for possible future expansion if the trend continues.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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