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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,
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.
2% shareholder payout is the way to go.
Are you a typical CEO?
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.
This sounds similar to the first option. What is difference between what you said and Option 1?
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.
Based on expectations do nothing,
The OP doesn't say that.Thats a better option than wasting on some lazy dumbass
The OP doesn't say that either.DVSentinel said:with little to no true value and easily replaced.
They could be thankful. They may not be thankful. That really doesn't matter at all. Will they will be finding another job during the improved economic situation? If so, will you be able to hire new workers to replace them. Wages can only be changed once a year.DVSentinel said:They should be thankful they have a job, especially if it is one at or near minimum wage.
This is the only thing that you said that has anything to do with the OP. If this is true, you will turn out just fine with the 1st option. If you are wrong there could be some serious hiccups throughout the upcoming year. As CEO you have to gamble sometimes. You are the CEO. It's your decision.DVSentinel said:If they don't like it, well, since they have no valuable skills and never got themselves education and training to be valuable, there are thousands of others just like them available to take their place.
The OP doesn't say that.
The OP doesn't say that either.
They could be thankful. They may not be thankful. That really doesn't matter at all. Will they will be finding another job during the improved economic situation? If so, will you be able to hire new workers to replace them. Wages can only be changed once a year.
This is the only thing that you said that has anything to do with the OP. If this is true, you will turn out just fine with the 1st option. If you are wrong there could be some serious hiccups throughout the upcoming year. As CEO you have to gamble sometimes. You are the CEO. It's your decision.
"The bottom 80% are all making $15,080 per year and have been for the last 5 years."
That kind a wage is either entry level and subject to change as they get experience or it is minimum wage unskilled labor.
If it is entry level, then the salary and benefits that they will receive once they advance are more likely to determine if they stay or not. If they move, then they are probably going to start their clocks over and be stuck at that level longer. If their skills are still drawing that kind of salary at 5 years, then they are most likely to lazy incompetents that the company would be glad to loose.
If they are minimum wage laborers, then they are unskilled/low skilled easily labor which means what I said not only applies but is frankly truthful.
You completely ignored the point of this exercised and used it as an opportunity to criticize people that you hate.
The point of this OP would have been exactly the same if the employees were making $22,000 or $50,000 or $100,000. $15,080 was just an example. The question is how do you balance shareholder interests with employee interest.
The point wasn't to prove how much that you hate people. That was never my intention.
Btw: Your stereotypes are not accurate for a post 2008 economy.
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.
I've saving the money for the upcoming Obama Care fine because if I have 8,250 employees and the bottom 80% are only making $15,080/year I can guarantee you the company can not afford the mandated health insurance coverage.
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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