Buyout in 2013

[pretzel_man]

When you say merit pool, you are not including the $250,000 annual bonus that Level 20's are "eligible" for?

This was what the Level 18's were told in Corporate back in circa 2007 or 2008 (really unsure about the year).

Not sure what merit pool means so I am fishing (pun intended) to some extent.

Of course I am not....

You are talking about LTIP. That's old news and its in place as an incentive to grade 20 and above.

These people are in the top 1/10 of 1% of UPSers (in regards to level).

I'm talking about raises in response to this: "Here is some math for you. The get it done mentality of the front line is inversely proportionate to the variance between the grade 20+ pay increases and the <20 pay increases."

Do you think these people are overpaid compared to the marketplace? Go check with an executive search firm....

 

[Catatonic]

Of course I am not....

You are talking about LTIP. That's old news and its in place as an incentive to grade 20 and above.

These people are in the top 1/10 of 1% of UPSers (in regards to level).

I'm talking about raises in response to this: "Here is some math for you. The get it done mentality of the front line is inversely proportionate to the variance between the grade 20+ pay increases and the <20 pay increases."

Do you think these people are overpaid compared to the marketplace? Go check with an executive search firm....

I was trying to understand what you meant by merit pool (which I guessed right) which is base salary and raises on that.

I was also trying to understand where Casca and Significant Owner thought the "large discrepancies" existed. I still don't know what that is.

As I stated before, I don't envy the people at Level 20 and above or any compensation they get.
That is a very competitive environment and for the most part, they seem pretty miserable.
Furthermore, their total compensation (LTIP is a big part) should be driven to a large extent by the accomplishments in their area of responsibility ...
not like the rest of us who get our base salary and our raises are based on accomplishments/execution.

You seem to be lumping me in with others and I am not envious of Level 20s and above, I appreciate how they drive our company and I think they earn whatever they get and probably more.
I think it is a good think that UPS management is a very competitive workplace and that only (hopefully) the best at achieving results are the ones that are promoted to Level 20 and above.

I don't think discussing these things is a negative thing and creates "undertones".
I have learned some things (not much but a little) in this thread and hopefully, others have as well.

 

[SignificantOwner]

So, you think that there is a different merit pool for <20 and 20+ ??

That is untrue.

I don't know what a merit pool is, but the rising merit pool only seems to lift a few boats:

UPS United Parcel Service Inc (UPS) Class B Executive Compensation

And Hoax, there are a few with 7 digits out there, but the high 6 figures say thanks too:

UPS chairman's total compensation rises to $13.1M - Albuquerque Business First

But the rank and file won't see decent increases until we start growing. Do we not work for the same company?

 

[Catatonic]

I don't know what a merit pool is, but the rising merit pool only seems to lift a few boats:

UPS United Parcel Service Inc (UPS) Class B Executive Compensation



But the rank and file won't see decent increases until we start growing. Do we not work for the same company?

UPS is a different company than it was 10, 15 or 20 years ago.
The salaries of the top 5 management are rather measly compared to other companies.
Most of the compensation is in the form of RSU's which constitute about 2/3 of the total compensation.

I really don't know what to tell you except that the people at the top always get paid the most - at any company.

In regards to your statement "But the rank and file won't see decent increases until we start growing."
I don't know who told you that but the compensation management receives is based on the industry average for that type of position.
If UPS makes less or more via growing, these positions will pay the same.
I think the growing aspect is the implication that opportunities for advancement to a position of higher responsibility will increase.
My take is that if UPS grew by 200% in the next two years, we would all make what we make now unless we got a promotion.

 

[pretzel_man]

I was trying to understand what you meant by merit pool (which I guessed right) which is base salary and raises on that.

I was also trying to understand where Casca and Significant Owner thought the "large discrepancies" existed. I still don't know what that is.

As I stated before, I don't envy the people at Level 20 and above or any compensation they get.
That is a very competitive environment and for the most part, they seem pretty miserable.
Furthermore, their total compensation (LTIP is a big part) should be driven to a large extent by the accomplishments in their area of responsibility ...
not like the rest of us who get our base salary and our raises are based on accomplishments/execution.

You seem to be lumping me in with others and I am not envious of Level 20s and above, I appreciate how they drive our company and I think they earn whatever they get and probably more.
I think it is a good think that UPS management is a very competitive workplace and that only (hopefully) the best at achieving results are the ones that are promoted to Level 20 and above.

I don't think discussing these things is a negative thing and creates "undertones".
I have learned some things (not much but a little) in this thread and hopefully, others have as well.

Hoax,

I don't think discussing this creates any negative undertones. I think an open honest discussion is worthwhile.

I do think that many on this board don't care about an open conversation and I did not intend to lump everyone together.

There are many that post a question, but don't really want an answer. They have opinions that will remain unchanged by any facts. I know you are not one of them.

Back to the topic.....

In the old days when we had large growth and large growth in stock, the amount of stock one got determined their compensation.... Not because of the actual amount, but because that amount will grow. Do you remember all the years when you couldn't buy stock at all?

Now, without that those people need to get compensated closer to the marketplace. Like it or not, this is how the world works.

Also, keep in mind the % of salary for those people that is incentive based vs. guaranteed. I think a grade 20 has about 2/3 of compensation as incentives. It goes up from there. I think Davis has 85% of compensation as incentive.....

There is no doubt that UPS is a different company than when you and I started. For better or worse, that same old company would not have survived. It had to change with the world economy, with competition, with technology, etc.

 

[pretzel_man]

I don't know what a merit pool is, but the rising merit pool only seems to lift a few boats:

UPS United Parcel Service Inc (UPS) Class B Executive Compensation

And Hoax, there are a few with 7 digits out there, but the high 6 figures say thanks too:

UPS chairman's total compensation rises to $13.1M - Albuquerque Business First

But the rank and file won't see decent increases until we start growing. Do we not work for the same company?

The merit pool is the money available for raises.

Some years its 2.75%. Some 3%. There is a new formula that sucks, but its still about the same %.

The Merit pool is the same for ALL management.

The compensation committee of the board decided long ago that the top management was underpaid compared to the marketplace. I guess objectively, that is true. UPS has had many executives retire and take jobs at much higher pay.

When stock grew leaps and bounds, those executive got very rich, not on compensation but on the growth of stock. Without that, I guess the committee decided this is the best way to go....

Even in the old days, yearly raises did not make up the true compensation growth. It was through internal opportunities. There we have a double whammy. That is that the over 55's are not leaving. So their positions are not available for promotions...

As Hoax said, the increases for the rank and file are NOT tied to growth. But opportunity is. If we grow, RSU's grow. More promotional positions become available.

The biggest differences between UPS today and UPS before is Growth and Competition.

 

[j13501]

The compensation committee of the board decided long ago that the top management was underpaid compared to the marketplace. I guess objectively, that is true. UPS has had many executives retire and take jobs at much higher pay.

PMan, you're 100% right. I remember attending a planning/training meeting in 1998 which was instructed by the management consultants we were using at that time. I remember them showing a line graph comparing our compensation to that of our competition. The comparison showed that UPS compensated it's drivers, supervisors and managers at a higher level than the competiton. Division managers were the point where the lines intersected (paid about the same). At Region staff mgrs (grade 20) and above, our management was lower paid than the competition. The consultants were recommending that we change our model to align better with the structure of our competiors.
I'm not sure if this was in preparation for the IPO that occurred the next year, but I do know that the picture of management compensation at UPS that the management consultants envisioned has gradually become reality as the years have past.

 

[Catatonic]

PMan, you're 100% right. I remember attending a planning/training meeting in 1998 which was instructed by the management consultants we were using at that time. I remember them showing a line graph comparing our compensation to that of our competition. The comparison showed that UPS compensated it's drivers, supervisors and managers at a higher level than the competiton. Division managers were the point where the lines intersected (paid about the same). At Region staff mgrs (grade 20) and above, our management was lower paid than the competition. The consultants were recommending that we change our model to align better with the structure of our competiors.
I'm not sure if this was in preparation for the IPO that occurred the next year, but I do know that the picture of management compensation at UPS that the management consultants envisioned has gradually become reality as the years have past.

It's possible we attended some of the same meetings/briefings as I remember this too and some 12 years later, it has come to fruition.
Now the table is set to start bringing in outside hires into these Level 20 and above positions. I think a few already have.
I would not be surprised if the next CEO is brought in from outside.

 

[Karma...]

UPS has already brought in many management people from outside the company. The management that you refer to as over paid have been giving themselves a pay raise by refusing to work the hours that they used to. I think the next CEO should come from outside and get paid depending on the stock price . That would be a major refocus as to what her/maybe his job respondsibilities actually are. Overall I think you folks are right. UPS is a public company and theres no going backwards. So lets get on with it and start making money for the shareholders !

 

[Catatonic]

UPS has already brought in many management people from outside the company. The management that you refer to as over paid have been giving themselves a pay raise by refusing to work the hours that they used to. I think the next CEO should come from outside and get paid depending on the stock price . That would be a major refocus as to what her/maybe his job responsibilities actually are. Overall I think you folks are right. UPS is a public company and there's no going backwards. So lets get on with it and start making money for the shareholders !

That is a logical way to adapt to a situation one cannot control.
This has been the topic of many a conversations on motivating the management workforce in the last 6 or 7 years.
The younger set are not willing to work the extra hours on the belief it will pay off through higher stock prices or an MIP that seems totally arbitrary in nature.

I realize RSU's are "guaranteed" compensation but their potential is on the price of stock going up.
The top 5 compensated management employees have over 2/3's of their compensation in RSU's.
I believe this is true for most of Level 20's and up.

UPS United Parcel Service Inc (UPS) Class B Executive Compensation

 

[texan]

It's possible we attended some of the same meetings/briefings as I remember this too and some 12 years later, it has come to fruition.
Now the table is set to start bringing in outside hires into these Level 20 and above positions. I think a few already have.
I would not be surprised if the next CEO is brought in from outside.

"I would not be surprised if the next CEO is brought in from outside."
Somebody just turned in their grave. sigh....

 

[Catatonic]

"I would not be surprised if the next CEO is brought in from outside."
Somebody just turned in their grave. sigh....

As I understand it Jim Casey came from the outside into the position of CEO.
Of course, back then, they did not call it CEO.
And although he was CEO, he was also, dispatcher, planner, sales and delivery person.

 

[UpstateNYUPSer(Ret)]

"I would not be surprised if the next CEO is brought in from outside."
Somebody just turned in their grave. sigh....

This is not Jim Casey's UPS. We should have the most qualified individual, regardless of background, leading us through these challenging times. Perhaps a fresh set of eyes would serve us well.

 

[texan]

This is not Jim Casey's UPS. We should have the most qualified individual, regardless of background, leading us through these challenging times. Perhaps a fresh set of eyes would serve us well.

I disagree.

We need someone with the original values, yet a keen knowledge of the current market and trends.

From the outside, the original values could be lost, like Colonel Sanders recipe.

UPS should be Quality, Dependability and Professionalism, that stands above all.

 

[pretzel_man]

"I would not be surprised if the next CEO is brought in from outside."
Somebody just turned in their grave. sigh....

Maybe it wouldn't be a bad thing....

We no longer just pickup and deliver.

We have technology, brokerage, multiple services, healthcare, etc. It's a MUCH different environment than in Casey's day.

I should point out that after Casey retired from being CEO, George Smith took over. George grew the company two and a half times in his first five years......

 

[Karma...]

The next UPS CEO must be from outside the Company. I would think that since we are international and growth is from outside the USA the CEO should also be from outside the USA.

 

[SignificantOwner]

Here is some math for you. The get it done mentality of the front line is inversely proportionate to the variance between the grade 20+ pay increases and the <20 pay increases. I see it every day.

When I say variance in pay increases I'm referring to the variance in the total compensation of the two groups. It was poorly worded on my part. Here's more math to clarify my observation on executive compensation over the past 10 years:

Stagnant stock price = robust compensation growth for the 20+ group.

Stagnant stock price = stagnant compensation growth for the <20 group.

Growth in stock price = huge compensation increase for 20+ **

Growth in stock price = some compensation increase for <20 **

** speculation only, no historical data to review.

 

[Catatonic]

When I say variance in pay increases I'm referring to the variance in the total compensation of the two groups. It was poorly worded on my part. Here's more math to clarify my observation on executive compensation over the past 10 years:

Stagnant stock price = robust compensation growth for the 20+ group.

Stagnant stock price = stagnant compensation growth for the <20 group.

Growth in stock price = huge compensation increase for 20+ **

Growth in stock price = some compensation increase for <20 **

** speculation only, no historical data to review.

This was explained in the aforementioned 2007-2008 meeting/presentation to the Level 18's in Corporate.

The gist was, "work hard and smart and be effective and "this" could be yours too!"

 

[Karma...]

Thats fine for the over 20's yet what do the rest of the stockholders look forward to ?

 

[Catatonic]

Thats fine for the over 20's yet what do the rest of the stockholders look forward to ?

Dividends