Lenovo CEO Gives His $3M Bonus To 10k Workers

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Lenovo CEO Gives His $3M Bonus To 10k Workers

Posted by Soulskill on Friday July 20, 2012 @08:09AM from the what's-the-opposite-of-a-golden-parachute dept.

ndogg writes "Lenovo CEO Yang Yuanqing has decided to give his $3,000,000USD bonus to his workers instead of keeping it. Those 10,000 employees include receptionists, production line workers, and assistants. That works out to about 2,000 yuan or $300 per employee, which is about a month's worth of salary."

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Bloody communists! by Anonymous Coward · 2012-07-20 08:12 · Score: 5, Funny

Capitalism FTW! Boycott Lenovo.
1. Re:Bloody communists! by spidercoz · 2012-07-20 08:17 · Score: 5, Funny
  
  Yeah, how dare they make our decent, god-fearing capitalist CEOs look like money-grubbing scum.
  
  --
  "I disapprove of what you say, but I will defend to the death your right to say it." - Evelyn Beatrice Hall, re Voltaire
2. Re:Bloody communists! by DinDaddy · 2012-07-20 08:19 · Score: 5, Insightful
  
  JAL CEO did something similar and took a paycut as well. Cold day in hell before any american CEO would do this. Even if one were willing, the others would kill him in the country club locker room and bury his body on the links.
3. Re:Bloody communists! by GameboyRMH · 2012-07-20 08:23 · Score: 4, Interesting
  
  You joke but I actually saw arguments along these lines not long after the 2008 economic crash. People worried that if the CEOs of the banks that took government loans didn't get obscene bonuses as usual, it would pressure other banks which weren't bailed out to do the same and that would be un-capitalist government interference.
  There's no hope for you guys, sorry.
  
  --
  "When information is power, privacy is freedom" - Jah-Wren Ryel
4. Re:Bloody communists! by tmosley · 2012-07-20 08:25 · Score: 4, Funny
  
  Yeah, how dare they make our decent, self-styled godly fascist CEOs look like money-grubbing scum.
  
  FTFY.
5. Re:Bloody communists! by Anonymous Coward · 2012-07-20 08:25 · Score: 5, Insightful
  
  except their fringe benefits and perks might amount to six figures, and stock options give them a net in the millions most of the time. It might be a nice show of generosity, but it's also a nice way to have some PR and tax breaks for the uber rich.
6. Re:Bloody communists! by randizzle3000 · 2012-07-20 08:25 · Score: 5, Insightful
  
  I think that's so they can skip paying income tax, not because of generosity.
7. Re:Bloody communists! by SScorpio · 2012-07-20 08:27 · Score: 5, Insightful
  
  While they have a $1/yr salary. They still have stock options and other benefits that make up the difference. This is a tax dodge and not a show of generosity.
8. Re:Bloody communists! by spidercoz · 2012-07-20 08:27 · Score: 4, Insightful
  
  You are in fact correct, free market and pure democracy are similar; they both treat everyone the same, and they're both fucking mythological.
  
  --
  "I disapprove of what you say, but I will defend to the death your right to say it." - Evelyn Beatrice Hall, re Voltaire
9. Re:Bloody communists! by organgtool · 2012-07-20 08:27 · Score: 4, Funny
  
  Agreed! How can they expect their country to become successful if they don't proliferate the idea of only rewarding the people at the top? If they keep up this shit, the money will never trickle down!
10. Re:Bloody communists! by Anonymous Coward · 2012-07-20 08:29 · Score: 4, Insightful
  
  As I recall, there's a lot of American CEOs with a $1/yr salary. I think Lee Iacocca may have started that trend when he went to work for Chrysler (or at least he popularized it). Granted, these guys are already filthy rich and can live off their assets/investments alone but it's still a nice show of generosity.
  I thought this had more to do with tax evasion? Get paid through capital gains rather than salary and pay less taxes.
11. Re:Bloody communists! by Anonymous Coward · 2012-07-20 08:35 · Score: 4, Funny
  
  Yeah, how dare they make our decent, god-fearing capitalist CEOs look like money-grubbing scum.
  Yeah! Our CEOs can do that perfectly well THEMSELVES, thank you very much!
12. Re:Bloody communists! by neonv · 2012-07-20 08:35 · Score: 4, Insightful
  
  Capitalism does not preclude altruism. Charity work has always flourished in capitalistic societies.
13. Re:Bloody communists! by jdastrup · 2012-07-20 08:39 · Score: 3, Informative
  
  I'm not sure of the temperature in Hell that day, but I believe it was pretty mild in the OC when the eMachines CEO did the same thing in 2004 with his $72 million. http://www.johnhui.com/newsocregister.html
  
  Interesting, though, that the CEO, John Hui, was also Chinese
14. Re:Bloody communists! by Nadaka · 2012-07-20 08:40 · Score: 5, Informative
  
  They have a $1 salary because salary is taxed at the higher rate reserved for the lower class. The CEO's get all their compensation in the form of stock options, and that is taxed at the lower rate reserved for the gentry and with a good enough accountant and a multinational organization capable of shifting money about, it may not be taxed at all.
15. Re:Bloody communists! by cpu6502 · 2012-07-20 08:50 · Score: 4, Interesting
  
  >>>Cold day in hell before any american CEO would do this
  There was an American company I saw profiled by ABC's John Stossel back in 2009. Unfortunately I forget the name, but the CEO decided not to have layoffs. Instead he agreed to take a cut in pay to the same level as the workers' pay, in order to keep everyone employed. I guess hell froze over that day.
  
  --
  My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
16. Re:Bloody communists! by spidercoz · 2012-07-20 08:55 · Score: 5, Funny
  
  only because charitable donations are tax-deductible
  
  --
  "I disapprove of what you say, but I will defend to the death your right to say it." - Evelyn Beatrice Hall, re Voltaire
17. Re:Bloody communists! by Peter+H.S. · 2012-07-20 10:08 · Score: 4, Insightful
  
  $1/yr salary is simply a tax evasion scheme since wages are taxed much higher than the stock options etc. that they receive instead. These tax dodging assholes that won't pay for police, road maintenance or any thing else that is tax funded, even portrait this scheme as something modest. They make me puke.
18. Re:Bloody communists! by Actually,+I+do+RTFA · 2012-07-20 12:14 · Score: 3, Informative
  
  Top rate in CA is 9.3% - https://www.ftb.ca.gov/forms/2011_California_Tax_Rates_and_Exemptions.shtml Federal rate is 35% - http://www.moneychimp.com/features/tax_brackets.htm Total is 44.3% Also note that effective tax rate is somewhat lower than that because the 9.3% bracket doesn't kick in until $48k ($96k married). The 35% doesn't kick in until $380k (regardless of status).
  You omitted Medicaid (2.9%, uncapped) and SS ( 10.4% up to 110k). So, if the extra 11.44k makes up for the phasing in of the highest rate (not willing to do the math), the highest rate is actulally 47.2%. Which makes GP closer.
  Also factor in unemployment/disability, and possible city taxes.
  
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19. Re:Bloody communists! by daremonai · 2012-07-20 12:39 · Score: 3, Insightful
  
  I'd be happy with a company that thought on a 3-5 year time scale. 3-5 months seems more common (only the slightest exaggeration).
20. Re:Bloody communists! by cant_get_a_good_nick · 2012-07-20 17:26 · Score: 4, Interesting
  
  Jokes aside, when Henry Ford gave his workers raises, he was labelled a socialist. Even though his workers were much more efficient, and made Ford rich, when Hank gave even a part of that money back to the workers, he was labelled socialist.
  The trick is, Ford new that he needed a work force that was paid well to buy his cars. The payroll that you call an expense is actually the wages that can purchase someone else's product. And then the payroll that goes to those workers can buy someone else's product. All a virtuous cycle. Pardon the car reference, but some times money is like oil in a motor - it only does it's work when it circulates and when it stands still the motor seizes.
  Sadly most CEOs now don't have that foresight. We've been taught so much "make it someone else's problem" and "the only people you think of are the stockholders" that we've lost any vision. We're taught that unions are evil. Though they've seriously lost their way, they had use where they forced wages for everyone above some point so that the cycles can continue, and payrolls are squeezed to where we can't afford anything.
I would high-five this guy. by Anonymous Coward · 2012-07-20 08:12 · Score: 4, Interesting

You don't see that often. Very refreshing and restores a little faith in humanity.
1. Re:I would high-five this guy. by pwizard2 · 2012-07-20 08:22 · Score: 4, Interesting
  
  I wish we had more guys like this running companies in the US instead of the greedy sociopathic bastards we have in abundance.
  
  --
  "It is a denial of justice not to stretch out a helping hand to the fallen; that is the common right of humanity."
2. Re:I would high-five this guy. by Anonymous Coward · 2012-07-20 08:30 · Score: 5, Insightful
  
  Yeah, this guy sounds like a pretty good guy. Except, of course, that his bonus is equal to what about 10,000 employees make in a month. Doesn't really make his company seem that great. I'm not saying it's not common, but it a good example of how messed up the system is. Do you really think that guy benefited the company, over what he was already making in a year, more than what 833 people do in a whole year?
3. Re:I would high-five this guy. by DriveDog · 2012-07-20 09:35 · Score: 4, Insightful
  
  And that is exactly the point! CEOs taking 1,000 times more than low-level employees implies that their activities somehow create 1,000 times more profit (or income, or whatever measure you want) than the activities of the lowest-paid and 100 times more than upper-mid-level employees. Or to put it another way, it implies that one individual at, say, $20M/yr is worth more than 10 of the next-best available at $2M/yr. I don't believe it for a minute.
An even more generous example by G3ckoG33k · 2012-07-20 08:16 · Score: 5, Interesting

http://www.thelocal.se/41536/20120619/
Family-run firm Nominit in Värnamo, southern Sweden, will be paying out 114 million kronor ($16.3 million) to their current and former employees in a gesture of goodwill. The company was founded in 1937 and is the two founders and owners have no heirs to their fortune. The company, which currently has about 50 employees, manufactures rivets and has a turnover of about 100 million kronor, of which 60 comes from export.
$16,000,000 to 50 workers.
Holy Crap! by NeutronCowboy · 2012-07-20 08:19 · Score: 5, Insightful

That guy just earned himself some serious loyalty from the peons. Nothing says "I couldn't have done this without you" like sending a serious bonus down to everybody. The execs won't care, as that won't cover a day of their salary, but the people at the bottom of the ladder will appreciate it. Interesting that that came from a Chinese owner. I'd be curious to see what American CEOs think of that, and what their response would be to the question "Would you ever give you entire yearly bonus to your employees, and why?"

--
Those who can, do. Those who can't, sue.
1. Re:Holy Crap! by NeutronCowboy · 2012-07-20 08:34 · Score: 5, Informative
  
  I agree that context is important when considering the impact. However, I have to say that if my manager or my CEO distributed their bonus out to all the people underneath them, my respect for them would go up tremendously - even if it would amount to only an extra beer at pub night for me. The important part is that they were willing to forego something that their contract said they were entitled to, and instead chose it to say thank you to their employees in a very direct manner.
  
  --
  Those who can, do. Those who can't, sue.
2. Re:Holy Crap! by Mike+Buddha · 2012-07-20 10:02 · Score: 4, Interesting
  
  At my work, in 2008 we were still profitable, but the downturn was coming and we all knew it. The senior execs all forewent their own bonuses, but they distributed bonuses to all the lower level folks. I tell you that single act bought them a ton of loyalty from myself. We finally got back to profitability last year and the bonuses came back for everyone this year.
  
  --
  by Mike Buddha -- Someday the mountain might get him, but the law never will.
Something similar where I grew up... by The+Good+Reverend · 2012-07-20 08:20 · Score: 5, Interesting

Kingston technology (memory manufacturer) split $100 million between 500+ employees. They also gave scholarships to all the local schools (mine included) - http://articles.latimes.com/1996-12-15/news/mn-9424_1_million-bonus-employee
That's great and all, but... by JustAnotherIdiot · 2012-07-20 08:20 · Score: 3, Interesting

$300 per employee, which is about a month's worth of salary.
If you're only paying your employees a measly $300 a month, how about a raise instead?

--
What do I know, I'm just an idiot, right?
And the bad news is... by stanlyb · 2012-07-20 08:23 · Score: 5, Insightful

I am on crossroad, from one hand we have:
1.CEO receiving $3mln bonus, not salary but bonus. On another hand we have:
2.Regular Joe's medium monthly salary of "$300"....
---------------
So i wonder which one is worst, a company with so low medium salary, or a company with so much big CEO salary....
PLEASE, help me decide...
Re:Well, good for him by MozeeToby · 2012-07-20 08:25 · Score: 4, Interesting

Keep in mind, his total earnings for the year were $14 million. At a company where, according to the summary, $300 is an average month's salary. Not to take away from what he did, giving up $3,000,000 is still an amazing thing to do, but it's gotta be easier when you bring in $14 million a year than it is otherwise.
In theory... it *is* a bit like *communism* by F69631 · 2012-07-20 08:57 · Score: 5, Interesting

Many Americans don't seem to know (or perhaps care about) distinctions between communism (the form of utopia which countries like the Soviet Union supposedly wanted to achieve) and socialism (the system they intended to use in the transitional phase). Oversimplifying a bit... Communism is supposed to be a state where there is such an abundance of resources that everyone can get whatever they need and the motive to work would come not from material goods but from the social status that good workers receive, the idealistic desire to work for the good of mankind and stuff like that. Socialism is the idea that when a government takes control of the means of production and puts them to good use, the results are in some way (be it productivity, philosphical differences or whatever) better than than what capitalistic society can achieve... and if the difference in productivity is great enough, it could some day result in the overabundance of resources needed for communism.
So... When a CEO decides that he wants to give away huge sums of money (for social status and/or idealistic reasons... in a situation where he must have overabundance of resources for himself, because he is able to give away millions) and that the best receiver for the money are the workers that have produced the said wealth, I think that one could argue that it's - in small scale - very similar to how communist utopia was supposed to work.
Naturally this is all just a mixture of being pedantic and some form of thought experiments... but then again, what could you expect in a thread like this.
Damned if you do.. by tanveer1979 · 2012-07-20 09:03 · Score: 4, Interesting

And damned if you don't!

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1. Re:Damned if you do.. by Anonymous Coward · 2012-07-20 10:20 · Score: 5, Funny
  
  In Capitalist US, false dichotomy flogs you!
2. Re:Damned if you do.. by QQBoss · 2012-07-20 14:23 · Score: 3
  
  I don't typically mod memes, but jeesh this is once I wish I had my expired mod points back!
  +1 funny, sir or madam.
Re:A good example by MickyTheIdiot · 2012-07-20 09:04 · Score: 4, Informative

I would suggest you compare the CEO wages in the U.S. with CEO wages in the east, Japan especially.
IIRC, the average is that CEO wage is 24x the wage of your lower worker. In the U.S. it is in the hundreds of times.
The difference in the east and the U.S.: the CEO is considered important but not necessarily above the other workers. In the U.S. they are in an ivory tower. That's a problem and that's what so much of us have a problem with.
No, actually it means by publiclurker · 2012-07-20 09:33 · Score: 5, Interesting

that the CEO has to do something to cause a quick spike in the stock price when he wants to cash in. Generally, this is done by firing a bunch of people. It doesn't matter if this tanks the company, as the CEO's already gotten his cash.
Capital Gains Taxes by thesandbender · 2012-07-20 14:10 · Score: 3, Informative

I see a lot of comments here about how this is all a dodge to get around income taxes with capital gains taxes.

1. This is a Chinese CEO in Hong Kong, not the U.S.
2. Carter _decreased_ capital gains tax rates, Reagan _increased_ them and Clinton _decreased them (to be fair, Bush Jr. decreased them even more).
3. Capital gains are taxed at a higher rate based on your income (again to be fair, people with a lower income can't take advantage the same way).

Capital gains taxes have a place, the idea is to encourage investment, which is why long term capital gains taxes are lower than income taxes rates but short term capital gains taxes pretty much mirror income tax rates.
http://en.wikipedia.org/wiki/Capital_gains_tax#United_States
http://en.wikipedia.org/wiki/File:Maximum_Federal_Tax_Rate_on_Long_Term_Capital_Gains_(1972_-_2012).jpg
Re:A good example by riverat1 · 2012-07-20 14:41 · Score: 3, Insightful

Exactly right and it all started when Reagan dropped the top marginal tax rate from 74% (I think) to 28%. High marginal tax rates encourage high earners to put the money back into the business including pay raises. Higher pay for people with normal incomes means more money to be spent in the consumer economy.
Not a tax break. by Ungrounded+Lightning · 2012-07-20 15:10 · Score: 3, Insightful

In the absense of triggering some government program that gives more tax reduction than the money given away, it is still a loss. He might not pay taxes on the money he doesn't get (because he had it paid to the workers instead). But that normally will be taxed at less than 100%. So he's still out-of-pocket.
IMHO what this says is that the CEO thinks that the compensation packages the company had set up ended up giving him too much, and the workers too little, for the long-term health of the company. So he fixes it by reorganizing it - and gets a boost in morale and some good press as a bonus.
He probably also ends up ahead long-term because the company does far better in the future than it would have without this action. But he also might be doing it because he really is an idealist and/or does care for his workers.
Either way (if he's not a compensated psychopath who doesn't feel anything much) he gets to feel very good in his eventual retirement.

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