COVID Economy

[The Hippie Satan of Hyperbole]

I also think the concept of a "headquarters" these days isn't what it used to be.

[JWags85]

I also think the concept of a "headquarters" these days isn't what it used to be.

Yea, I know of multiple “HQ” where some execs sit, but the vast majority of office and other management staff are in a different location. My sister works for a company that has a HQ in NYC.  Of their 3 main offices, NYC makes up about 10% of employee volume.

[MU82]

Fits a pattern.  A year or two ago, Subway hired a Burger King executive to run the company.
Earlier this year they announced a "new office" in Miami and several jobs were moving from Milford, CT to Miami and the only reason was the new President didn't want to leave Miami.

Hate to hear that about my hometown. Subway, Bic and Schick were Milford's claims to fame, corporation-wise.

Oh, and Milford Jai-Alai, of course. Miss going there! Chula!

[Dr. Blackheart]

I also think the concept of a "headquarters" these days isn't what it used to be.

State and local tax rates

[The Hippie Satan of Hyperbole]

State and local tax rates

I get that.  I mean if the BK executive is THAT good, opening up a Miami office and sending a few employees down there is a minor cost overall as well.

[MU Fan in Connecticut]

Hate to hear that about my hometown. Subway, Bic and Schick were Milford's claims to fame, corporation-wise.

Oh, and Milford Jai-Alai, of course. Miss going there! Chula!

Schick factory is still there and thriving.  (They are a good customer of mine.)
Bic is still there, but making lighters only.  The whole facility is automated.
Subway HQ is of course still there, but Fred DeLuca died, his sister is old and had to step away and there were no other family members to take over, so they went outside who did what outsiders do - lay-off 15% of the workforce and open an office in Miami.

"Rebote, carom.  Egurbi with the win!  Zabala with the place."
I was in the Milford Winners (OTB) a few times this spring to place my Triple Crown bets and I just realized they had a Jai-Alai Memory case.  I only noticed because of COVID they were asking people to go one way and had to go out a side door to exit.  And one of the kids just found the pen in the glove compartment while cleaning out the 2006 Explorer.  I got a "What's Milford Jai Alai?"

[pbiflyer]

I also think the concept of a "headquarters" these days isn't what it used to be.

Yeah, our HQ is in VA. Our CEO is in TX.

[shoothoops]

That $65MM was a one time pay out for performance.  For a C suite that has returned nearly double digit revenue and profit growth annually the last 5 years for a behemoth of a company.

And even a modest raise of $3-4 across 60K+ hourly workers adds up into the $100-200MM range rather quickly.  Which is substantial for a company that has net income of around $300MM annually. Raising wages is good, but people can’t expect everything to stay dirt cheap if they do.  Even if the execs worked for $50K a year, they would still need those price hikes to keep the company growing and in the black.  Public companies aren’t run to break even. Especially ones with massive overhead, employee size, and high COGS.

You missed the point. Executive pay vs rest of company pay. Pay a living wage to your employees. Instead of doing so with record profits, they pass it on to customers. Paying a CEO $38 Million while saying you can’t afford hourly workers.

[shoothoops]

Simple solution: Don't eat there. Make your Mexican food fresh, at home. It tastes better, or at least mine does.

Or pay your employees more money out of your profits and executive pay.

This example can be used in a lot of cases in a lot of places.

Some people shop at Walmart etc…because they will shop where it’s most affordable for them. Many who shop there know that Walmart doesn’t treat their hourly employees well. And, I’m sure they’d prefer to shop elsewhere and  also prefer that Walmart treated their employees better. But they are going to go where they need to go to get by.

Also, many people don’t have easy access to affordable grocery stores with fresh quality foods. They go where they have to go.

[JWags85]

You missed the point. Executive pay vs rest of company pay. Pay a living wage to your employees. Instead of doing so with record profits, they pass it on to customers. Paying a CEO $38 Million while saying you can’t afford hourly workers.

I didn’t miss any point.  I literally said that the executive pay and bonuses wouldn’t cover the salary hikes and staffing increases.

They need to hire 20K workers. If every one of those workers is only part time $14/hr, 25 hours per week (which is unlikely), that $38MM covers roughly 2000 new employees.  To hire the 20K part time workers at $17,500 a year, that’s $350MM.  Plus another $2-3 increase for the existing 40-50K hourly workers.  Again, conservatively saying they are all only 25/hr a week part time, that’s another $150MM.  It far outstrips any executive compensation.

It’s the same fuzzy emotional math that people use to act like a simple tax hike here or there will cover $1T in new spending packages.

Comparing Chipotle to Walmart as necessity born out of lack of option is utter BS.

[shoothoops]

I didn’t miss any point.  I literally said that the executive pay and bonuses wouldn’t cover the salary hikes and staffing increases.

They need to hire 20K workers. If every one of those workers is only part time $14/hr, 25 hours per week (which is unlikely), that $38MM covers roughly 2000 new employees.  To hire the 20K part time workers at $17,500 a year, that’s $350MM.  Plus another $2-3 increase for the existing 40-50K hourly workers.  Again, conservatively saying they are all only 25/hr a week part time, that’s another $150MM.  It far outstrips any executive compensation.

It’s the same fuzzy emotional math that people use to act like a simple tax hike here or there will cover $1T in new spending packages.

Comparing Chipotle to Walmart as necessity born out of lack of option is utter BS.

Now do Chipotle's Billion Dollar stock buybacks etc...

They have such a difficult time paying a living wage with their $6 Billion in revenue and stock biy back programs, they are opening 200 additional restaurants this year.




 

[JWags85]

Now do Chipotle's Billion Dollar stock buybacks etc...

They have such a difficult time paying a living wage they are opening 200 additional restaurants this year.

Ive spoken out against buybacks here before.  But stop shifting the goalposts.  You literally just said executive compensation was the issue.  But when I disproved that, you want to talk about buybacks.  Then it will be food in the executive cafeteria or transportation allotments. 

Making profits and distributing them is evil, I get it.  And when a company takes the right steps, they can now be criticized for not doing it the "right way".  They've grown exponentially charging $2 for guac.  I'm sure their customers will be fine with a 4% increase.  Their customer base isn't buying dollar menu items cause they can't afford fresh fruits and veggies.

And its not a "difficult time", they have greatly increasing labor costs, plain and simple.  You dont only expand when you have free cash to completely cover the costs of doing so.  Thats not how investing in expansion works.  They would open those restaurants just fine if they weren't increasing labor costs across the board.  If your stance is "well they shouldn't open more restaurants until they can completely afford to raise everyone's salaries without increasing prices"...well, I'm glad you dont run any business units I own or invest in.  Especially in something as cutthroat and viciously cyclical as fast casual dining.

[warriorchick]

You missed the point. Executive pay vs rest of company pay. Pay a living wage to your employees. Instead of doing so with record profits, they pass it on to customers. Paying a CEO $38 Million while saying you can’t afford hourly workers.

How many employees do they have in total?

One of my friends went on a Facebook rant about a similar CEO, and I pointed out that if he worked for zero salary, they could take that money and the rest of the company's employees pay by...ten cents an hour.

There are many CEOs that aren't worth what they are being paid, but let's not pretend that a lower salary for executives can directly translate into a meaningful pay raise for everyone else in the organization.

[jesmu84]

How many employees do they have in total?

One of my friends went on a Facebook rant about a similar CEO, and I pointed out that if he worked for zero salary, they could take that money and the rest of the company's employees pay by...ten cents an hour.

There are many CEOs that aren't worth what they are being paid, but let's not pretend that a lower salary for executives can directly translate into a meaningful pay raise for everyone else in the organization.

IMO, it's not about any one organization or single CEO or single policy, etc.

The entire system is broken.

[Skatastrophy]

IMO, it's not about any one organization or single CEO or single policy, etc.

The entire system is broken.

I hope covid fixes this.

[shoothoops]

Ive spoken out against buybacks here before.  But stop shifting the goalposts.  You literally just said executive compensation was the issue.  But when I disproved that, you want to talk about buybacks.  Then it will be food in the executive cafeteria or transportation allotments. 

Making profits and distributing them is evil, I get it.  And when a company takes the right steps, they can now be criticized for not doing it the "right way".  They've grown exponentially charging $2 for guac.  I'm sure their customers will be fine with a 4% increase.  Their customer base isn't buying dollar menu items cause they can't afford fresh fruits and veggies.

And its not a "difficult time", they have greatly increasing labor costs, plain and simple.  You dont only expand when you have free cash to completely cover the costs of doing so.  Thats not how investing in expansion works.  They would open those restaurants just fine if they weren't increasing labor costs across the board.  If your stance is "well they shouldn't open more restaurants until they can completely afford to raise everyone's salaries without increasing prices"...well, I'm glad you dont run any business units I own or invest in.  Especially in something as cutthroat and viciously cyclical as fast casual dining.

Nice try. I never said Executive Pay is the only issue. Now you are projecting and gaslighting about it. Change subject. Begrudgingly say stock buy backs are bad. Got it

No one said making profit and distributing it is bad. You said that. What is bad is not taking care of your lower and lowest paid employees by not paying them a living wage with decent benefits.

it isn't Chipotle specific. Chipotle is the example here because they are the ones who spoke about it recently. They are the ones who said they couldn't afford to pay their hourly employees a living wage without repeated recent price increases. That of course isn't true.

[shoothoops]

How many employees do they have in total?

One of my friends went on a Facebook rant about a similar CEO, and I pointed out that if he worked for zero salary, they could take that money and the rest of the company's employees pay by...ten cents an hour.

There are many CEOs that aren't worth what they are being paid, but let's not pretend that a lower salary for executives can directly translate into a meaningful pay raise for everyone else in the organization.

Have less people in your organization if you can't pay all of them a living wage with decent benefits, where one makes say $38 Million while many others make a few bucks an hour. The percent difference between executive pay and rest of employee pay has skyrocketed over the past several decades. And that of course only covers one aspect of rhe problem.

[warriorchick]

Have less people in your organization if you can't pay all of them a living wage with decent benefits.
[/quote

"Sorry, guys, we want to pay some other employees more money, so we are going to have to fire you."

Like that?

[warriorchick]

Nice try. I never said Executive Pay is thr only issue. Now you are projecting and gaslighting about it. Change subject. Begrudgingly say stock buy backs are bad. Got it

No one said making profit and distributing it is bad. You said that. What is bad is not taking care of your lower and lowest paid employees by not paying them a living wage with decent benefits.

it isn't Chipotle specific. Chipotle is the example here because they are the ones who spoke about it recently. They are the ones who said they couldn't afford to pay their hourly employees a living wage without repeated recent price increases. That of course isn't true.

What would you consider a fair after-tax profit in terms of percentage?

[shoothoops]

What would you consider a fair after-tax profit in terms of percentage?

For example, ince 1978, CEO pay has risen 940% vs 12% typical worker compensation. Gee I don't know, seems like a lot.

https://www.epi.org/publication/ceo-compensation-2018/

[warriorchick]

For example, ince 1978, CEO pay has risen 940% vs 12% typical worker compensation. Gee I don't know, seems like a lot.

https://www.epi.org/publication/ceo-compensation-2018/

That doesn't answer my question.  What do you think is a reasonable bottom-line profit percentage for a corporation?

[shoothoops]

That doesn't answer my question.  What do you think is a reasonable bottom-line profit percentage for a corporation?

And you didn’t reapond to what I posted.

There isn’t one quick set answer to your question. And this is about more equitably sharing profit with all of your employees.

[warriorchick]

And you didn’t reapond to what I posted.

There isn’t one quick set answer to your question.

How can you say that Chipotle can afford to pay everyone a living wage if you can't define how much of a hit to their profits is reasonable?

[shoothoops]

How can you say that Chipotle can afford to pay everyone a living wage if you can't define how much of a hit to their profits is reasonable?

I can, because I just did. If one cannot afford to pay its employees a living wage with decent benefits, one doesn’t need to be in business.

Here’s a piece that specifically targets this industry:

https://www.google.com/amp/s/amp.theatlantic.com/amp/article/566387/

[MU82]

Although I do think it is bad for American society that CEOs and other top executives get such large slices of their compensation pies, the following are just facts that some might or might not find interesting. They were in this morning's NYT "DealBook," which is their daily business blog ...

+++

Six of the 10 largest executive pay packages of all time were awarded last year. This and other findings come from a new survey of the 200 highest paid C.E.O.s at public companies conducted for The Times by Equilar, a consulting firm. “Even in a gilded age for executive pay, 2020 was a blowout year,” writes The Times’s Peter Eavis.

The spike is due in large part to linking C.E.O.s’ pay to stock prices. This “pay-for-performance” structure is intended to align managers’ incentives with those of the company’s owners, the shareholders. But it also raises questions about how much credit executives deserve for rising stock prices, and whether the performance conditions attached to stock awards are suitably tough. C.E.O. pay jumped 14.1 percent last year, while the median worker got a 1.9 percent raise.

C.E.O.s in the survey received 274 times the pay of the median employee at their companies, up from 245 times in the previous year. Around two-thirds of companies with the largest pay packages had wider gaps between executive and employee pay after the pandemic.

“Say on pay” votes give shareholders a way to weigh in on compensation. Only around 2 percent of these nonbinding votes have historically gone against management, with recent high-profile rebukes coming at Starbucks and G.E. So far this year, votes against pay packages are on the rise, although these still tend to come in well below 50 percent disapproval.

“In tough times, it often makes sense to reward excellent leadership, even when optimum company performance may not be achievable,” said Equilar’s Dan Marcec about the initial batch of say-on-pay votes this year. “In a year mired in economic challenges and future uncertainty, this disconnect may be on further display.”

Eight C.E.O.s received pay packages last year worth more than $100 million. In 2019, only one chief executive’s pay package crossed that threshold. The top three earners all oversaw companies that went public last year. They are:

Alex Karp of Palantir, with $1.1 billion in compensation.
Tony Xu of DoorDash, with $414 million.
Eric Wu of Opendoor, with $370 million.