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Lenovo CEO Shares $3 Million Bonus With Workers
hackingbear writes "Yang Yuanqing, founder and CEO of Chinese PC maker Lenovo, will share $3.25 million from his bonus with some 10,000 staff in China and 19 other countries. 'Most are hourly manufacturing workers,' Lenovo spokeswoman Angela Lee said. 'As you can imagine, an extra $300 in a manufacturing environment in China does make an impact, especially to employees supporting families.' In its annual review last year, Lenovo raised Yang's base pay to $1.2 million and awarded him a $4.2 million discretionary bonus and a $8.9 million long-term incentive award. Yang owns 7.12% of Lenovo's shares, equivalent to about $720 million in stock."
I believe that he did this last year as well.
Good on him, especially considering that Lenovo has been quite successful recently in a contracting PC market
It's easy to be a philanthropist when you're rich. Just sayin'
Its also easy to not share your wealth with your workers.
Thanks for the info. I will make it a point to buy / recommend Leveno products. I want to reward this behavior.
The workers feel appreciated and will be diligent.
You don't happen upon good employee morale and company stewardship.
It has to be grown. Quality and waste will decrease. When employees feel zero empathy for the company or it's future, a fall is sure to follow.
In before 1000 Libertarians explaining that nobody works unless they're paid money, because nothing is important except accumulation of material tat.
Libertarian here. His stock is worth $720M, and he only gave away 0.5% of that. If his generosity boosts morale enough to generate just 1% more profit, then he has doubled the money. He is publicizing this gift, so the workers are aware of the source, rather than giving anonymously, so he is at least partly motivated by greed. This looks like a smart investment.
If this is all about return on investment, why don't all CEs of multinationals do this?
Are they all that dumb? Are you saying they should all be sacked?
Actually all the empirical evidence seems to point to it being harder.
Troll is not a replacement for I disagree.
I'm not quite sure what your point is. If you gave away $325 to individuals, how many people would you be able to be able to reach? Keep in mind that the $3m is less than one fourth his compensation this year.
That isn't to stray from the point that giving away personal benefits to his workers is something to encourage, no matter what the motivation was.
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
Clicked on comments to come and see all the folks who'd make negative comments about him for this. You, among others, didn't disappoint.
There is no indication he's motivated by greed whatsoever, and it's either ignorant or wilfully destructive to cast such aspersions without some concrete evidence.
"The true measure of a person is how they act when they know they won't get caught." - DSRilk
Not as easy as you think. First you have to get over yourself. That's HUGE when you're rich because you tend to think you're better than those below you and your status and ability to rise to your level convinces you of it. So, no it's not as easy as you think. In reality, it's easy to imagine being generous when you don't have much to give.
Just sayin'
Say or say not. There is no just.
how many pairs of boxer shorts should you own?
He's giving part of his bonus to be distributed to his workers? That's the path to socialism!
I'm a Libertarian who thinks corporations should be outlawed in current societies and denied any form of special privileges like limited liability or any form of personhood in a utopian free society. What were you saying again about grossly overpaid CEOs? I agree that they are grossly overpaid. I suspect that most of them could be replaced with someone who makes less than 100k per year no problem.
Even if the company made a little bit less money it would be good for the morale of everyone else if one person were not so ridiculously overpaid.
I think you have to be blind to not see that a corporation represents an unhealthy concentration of power in the hands of a few. Power corrupts. Also the behavior of a corporation is indistinguishable from that of an individual sociopath. The last thing we need is more sociopaths in our or any society. We certainly should not be encouraging them as we do now.
Companies, as in groups of individuals working toward a common goal, which should not be to make a pile of money in any way they can, but to produce a product or service they can be proud of, while hopefully at the same time earning enough to live comfortably, are themselves necessary evils because when they grow large they grow powerful even without limited liability or legal personhood, but there is simply no alternative that actually works. Human beings have to work together in groups to produce useful things. Government owned corporations are no better than privately owned ones. In fact they are usually worse.
You know what else is a necessary evil? Governments. That's why we Libertarians like to keep them as small as possible. In general I'd also like to keep companies as small as possible, but large companies also have advantages in terms of more affordable goods and services for poor people. Human beings simply don't behave as well in groups, especially in large groups, but I don't think artificially limiting their size makes sense in the way it does for governments. The economic advantages for the poorest members of society are simply too great. Nevertheless I think it would have great non-monetary benefits on society as a whole if all companies or organized groups of any kind were limited to no more than 100 people.
Are you sure you weren't thinking of a Republican. Some of you pro-government types get us confused so easily but we actually have very little in common. Some very minor common ground in economic theory with a small minority of them, probably the ones who call themselves tea partiers, and that's all.
Quite an experience to live in fear, isn't it? That's what it is to be a slave.
No its not, you dont get rich by sharing to begin with.
Who logs in to gdm? Not I, said the duck.
Implying that a 3,25 million bonus isn't all that much because it would 'only' mean an extra $325 if distributed among employees can really only be the opinion of entitled, rich assholes who never have had to struggle at the end of the month. 8 years ago during my student years an extra 30 bucks a month would have meant the world to me. In Europe. And we are talking about mostly Chinese families here.
TEN THOUSAND OF THEM.
In reality, it's easy to imagine being generous when you don't have much to give.
Bingo. Being rich insulates you from understanding hardship, the most generous people are generally the ones who can least afford it because they experience some level of poverty on a daily basis.
When information is power, privacy is freedom.
I have a different take on this matter. What exactly does a CEO do that provides so much more value to a company than an engineering team or assembly line laboring away at designing products? Sure, a CEO has a place and can be very instrumental in the effectiveness of the company, but then so too can a brilliant engineer or a factory foreman that can design the next Big Thing or improve efficiency because they know their work that well? Where are the brilliant engineers making CEO pay? Or the factory foremen? And don't think for a second that a CEO is so unique as to be irreplaceable. When a CEO is replaced, shockingly a company keeps running unless he is so bad as to drive the company into the ground. Being unable to attract good talented engineers or having your assembly line strike because of bad treatment can cripple a company just as badly as a bad CEO.
So, the lesson I'd like to give is that every level of a company, be it designers or sales or factory or CEO, has a place in a corporate team and no one entity is less crucial than the other. The only problem is that the CEO disproportionately earns that much more than everyone else. It is about time that the people that labor to make the products or to do the work, that serve as the face of the company moreso than the CEO does, share in the fruit of their efforts.
His point is that despite all the doom and gloom stories about excess CEO pay, the amount of money the CEOs are making compared to the entire economy is peanuts. Here's a commonly cited paper" on CEO pay in the U.S. The average CEO here makes 273x more than the typical worker, with an average compensation of $14.1 million/yr. The horror!
But if you read the fine print, you see that it only looked at the top 350 companies. If we were to cut these CEOs down to size and confiscated all the money they made last year and redistributed it to the 145 million workers in the U.S., each worker would end up getting ($14.1 million)*(350 CEOs)/(145 million workers) = $34 each. If you divide it by the number of workers in the Fortune 500 (24 million), it's $205 each.
The authors of the paper came up with the methodology for tracking trends in CEO pay over the years. Unfortunately it's been hijacked and misreported to fit the narrative that CEOs in general are siphoning off substantial amounts of money our economy is generating, and if it were fixed everything would be much better. That simply isn't the case. While the top CEOs may make enough money to afford themselves a lavish lifestyle, in terms of the overall economic output of their companies it's peanuts.
If you want a better, broader measure of income inequality, you should be looking at things like Gini coefficient. But "Income inequality 50% worse in U.S. than other Western countries" isn't as great a headline as "CEOs make 273x more than their workers."
As someone that often comments on overpaid CEOs, I feel like I need to reply to this. There are many aspect to it and many different cases.
First of all, his salary (what ever you call it it is a salary) is not $3 million. It is $1.2M+$4.2M+$8.2M. That's actually more than 13 million dollar a year. I won't even talk about stock, because arguably it is not salary. (But let's be honnest, at these positions abusing stock options is not really difficult. Also you have a pretty good picture of where to invest.) He shared 20% of his salary. He could share twice that and still not really see a difference.
Now, putting it in context. The GDP per capita in China is $6,000 a year. So when he gave them $300 which is claimed to be nothing by GP but he actually increased their salary by 5%. If I received 5% more salary, I'd be quite happy. (Remember he could share twice that.)
Now, the CEO is paid that. But he is likley not the only executive paid a ridiculous amount each year. (Because the guy lives 50% of its time in China, see what you do for a million dollars a year in china?) There are other executives which could lose 20% of their salary without wondering how to heal their son's broken arm at the end of the month. It is difficult to know how many there are, but you probably can scrap another $3 million.
Then there is the fact that when the guy leave or get fired or whatever, he will get a leaving bonus of again millions of dollars. Often it is a bonus for the guy that screws up. So even if the guy does crap and screw up and get fired after a single year, he will still get more money than you and me in 10 years. And more money than 10 of these chinese worker in a lifetime.
Then I am not convinced that whatever the CEO does (I don't know this one in particular) is actually worth the salary they are paid. I understand you need a guy with the ultimate decision on everything. But that's pretty much the only thing he does. Because all the strategic informations and negotiation of contract is not done by him alone, but by an army of analyst, lawyers and tacticians. On top of that, he is pretty much liable for nothing.
He can get the money, I understand he takes it. But don't tell me you feel like it is fair.
That would be correct, if the CEO was the only person that was over paid in each company.
The income inequality that you speak of comes from the top ~5% being over paid and there may be a another 10% that are paid a reasonable sum, so you take the top 1-5% and split it among the bottom 85% and it would be a lot more than $300 per person. I looked into this type thing in the past and it ends up being closer to $500/month per employee if you cut the top tier execs pay in half and redistribute.
Mitt Romney gave $4 million to charity in one year - 1/3rd of his income.
Giving money to your own social clubs like the mormon church and its affiliates like Brigham Young University, or the George W Bush Library, or the private school where 5 of his kids attended isn't charity, it's tax-deductible self-interest. Naked quid pro quo.
Before I posted I went and read up on his tax returns, just to make sure that my assumption of self-interest was true. That he hadn't made a liar out of me and my cynicism by really giving the bulk of his donations to organizations that would not benefit himself in one way or another. In the process I found out some interesting "character" related points:
1) His 2010 tax return showed only 11% of his income went to non-profit deductions. The mormon church directly gets 10% straight off the bat as tithing, leaving 1% for everything else. In fact, his own 20-year summary shows he averaged less than 12.6% until the 30% spike in 2011 brought the average up to just under 13.5%. Why such an outlier in 2011 when he had roughly half the income that he did in 2010? Seems to me that once he won the party primary his donations went up.
2) In 2011 he did not claim the maximum allowed tax deductions for his donations. He only claimed a deduction for $2.25 of the $4 million that was eligible. Why would he do that? Well, the guy who runs Romney's family trust said it helped to keep his campaign promise of paying at least 13% in income tax every year. Here's my question, now that he lost the election, did he go back and file an amended return to claim the entire $4M? We will probably never know, maybe a real man of character would not. A real republican would be happy to over-pay his taxes without a complaint, right?
My source for those two points is this article at The Blaze - I figured I'd go with a conservative news source to give Romney the benefit of the doubt in the reporting.
When information is power, privacy is freedom.