You may have just fell off the turnip truck if you think...

[FracusBrown]

You may have just fell off the turnip truck if you think...

...the downfalls of any changes are fully disclosed and advertised.

...the changes in management compensation are designed to better compensate low level management.

...RSUs are better because you'll get a fraction of a share more by waiting 5 years to get your money.

...managment benefits are a good idea because you get more choices of what you want to pay for.

...the reformulated MIP plan was anything more than a cost savings plan.

...you are free to choose whether you want to participate in the United Way and that is not taken into consideration for any purpose.

...there are no quotas.

...the board's biggest concern is the employees (both management and non management).

...small changes in share price don't have a huge effect on the board members net worth and therefore they won't do everything in their power to squeeze a profit out of everything possible.

...the half month bonus was changed to make it easier and it won't completely fade away in time.

...the MIP factor was changed to a percentage in order to keep it on a level payout basis.

...the restructuring was done to better align us with the customer.

...delayng the payout of MIP until April is not the same as making you work for three months at a substantially lower rate during the last year of your career and its not a scheme to delay the expense to improve the balance sheet.

...nothing else is planned that will further reduce compensation.

 

[Prickle]

Bravo! Well said.

 

[hangin455]

Well said - I remember the presentation of how we were going to be paying a small portion of our health benefits - it would make the company more profitable and therefore give a better return on the stock - which of course only Mgmt owned (at that time). A major effort to make a turd smell like a rose.
That was the first thing to go and it's only been going downhill since. It seems that the company keeps taking from Mgmt as the Mgmt group has no way to fight back against any of this.

 

[FracusBrown]

Well said - I remember the presentation of how we were going to be paying a small portion of our health benefits - it would make the company more profitable and therefore give a better return on the stock - which of course only Mgmt owned (at that time). A major effort to make a turd smell like a rose.
That was the first thing to go and it's only been going downhill since. It seems that the company keeps taking from Mgmt as the Mgmt group has no way to fight back against any of this.

I remember the same presentation. "More choices" is how it was sold. Initially, there were more choices, the cost was minimal and the benefits were good. I find it difficult to believe the quoted price of the plans were can choose are real prices.

I can buy a better plan with Aetna (or other well known insurers) on the open market for $4k less than the listed price of the company plan.

 

[FEGuy]

Then by all means do so.

 

[FracusBrown]

Then by all means do so.

I hope you don't think paying $10,000 for my own plan is a better idea than paying half ($5,000) of the company's $10,000 plan. Even though the actual value of the plan is $4k less than stated, its still a better deal than I can get by buying my own plan.

I could be mistaken, but I believe when the "more choices" plan was introduced, you had the option of taking the cash to buy your own plan, If you've been paying attention, you'd know that you now get $500 if you choose to take no medical benefits.

What it's worth or what it costs is not the point.

The point is that it's calculated deception.

 

[pretzel_man]

You may have just fell off the turnip truck if you think...

...the downfalls of any changes are fully disclosed and advertised.

...the changes in management compensation are designed to better compensate low level management.

...RSUs are better because you'll get a fraction of a share more by waiting 5 years to get your money.

...managment benefits are a good idea because you get more choices of what you want to pay for.

...the reformulated MIP plan was anything more than a cost savings plan.

...you are free to choose whether you want to participate in the United Way and that is not taken into consideration for any purpose.

...there are no quotas.

...the board's biggest concern is the employees (both management and non management).

...small changes in share price don't have a huge effect on the board members net worth and therefore they won't do everything in their power to squeeze a profit out of everything possible.

...the half month bonus was changed to make it easier and it won't completely fade away in time.

...the MIP factor was changed to a percentage in order to keep it on a level payout basis.

...the restructuring was done to better align us with the customer.

...delayng the payout of MIP until April is not the same as making you work for three months at a substantially lower rate during the last year of your career and its not a scheme to delay the expense to improve the balance sheet.

...nothing else is planned that will further reduce compensation.

When I first got into management at UPS, I really didn't know much if anything about the stock program. I heard from some of the people that the stock didn't grow at all for many quarters. I heard about something called "stock dividends". I guess instead of paying cash dividends, they gave out more non-growing stock.

I certainly do not recall the management people complaining. I don't recall them discussing how the company was screwing management. We worked long hours every day and peak season was a bigger event than it is today.

Of course, today's situation seems poorer. Stock has not grown for a longer period than they endured. When it grew again, they were appreciative of those worthless stock dividends. The key is to grow again. We need to do what it takes to support that growth.

Will the stock finally grow again? Will management compensation be a premium? I don't know. I do know that management's job is to look after the business. To ensure that we take care of the shareowners.

This is not new. Jim Casey said:

"The things that have made the company a success are the same things that have made the individuals successful. And if the company prospers, as we hope it will, you will have the opportunity to prosper. You have a good connection here in the business, and if you don’t do your part to benefit from your opportunity, the fault will be yours alone."

I guess management is not for everyone.......

 

[Karma...]

When I first got into management at UPS, I really didn't know much if anything about the stock program. I heard from some of the people that the stock didn't grow at all for many quarters. I heard about something called "stock dividends". I guess instead of paying cash dividends, they gave out more non-growing stock.

I certainly do not recall the management people complaining. I don't recall them discussing how the company was screwing management. We worked long hours every day and peak season was a bigger event than it is today.

Of course, today's situation seems poorer. Stock has not grown for a longer period than they endured. When it grew again, they were appreciative of those worthless stock dividends. The key is to grow again. We need to do what it takes to support that growth.

Will the stock finally grow again? Will management compensation be a premium? I don't know. I do know that management's job is to look after the business. To ensure that we take care of the shareowners.

This is not new. Jim Casey said:

"The things that have made the company a success are the same things that have made the individuals successful. And if the company prospers, as we hope it will, you will have the opportunity to prosper. You have a good connection here in the business, and if you don’t do your part to benefit from your opportunity, the fault will be yours alone."

I guess management is not for everyone.......

PMan, you appear to be rational......If UPS was still private what do you think the present price of the stock would be ?....

 

[Catatonic]

When I first got into management at UPS, I really didn't know much if anything about the stock program. I heard from some of the people that the stock didn't grow at all for many quarters. I heard about something called "stock dividends". I guess instead of paying cash dividends, they gave out more non-growing stock.

I certainly do not recall the management people complaining. I don't recall them discussing how the company was screwing management. We worked long hours every day and peak season was a bigger event than it is today.

Of course, today's situation seems poorer. Stock has not grown for a longer period than they endured. When it grew again, they were appreciative of those worthless stock dividends. The key is to grow again. We need to do what it takes to support that growth.

Will the stock finally grow again? Will management compensation be a premium? I don't know. I do know that management's job is to look after the business. To ensure that we take care of the shareowners.

This is not new. Jim Casey said:

"The things that have made the company a success are the same things that have made the individuals successful. And if the company prospers, as we hope it will, you will have the opportunity to prosper. You have a good connection here in the business, and if you don’t do your part to benefit from your opportunity, the fault will be yours alone."

I guess management is not for everyone.......

Sorry P-Man but that dog don't hunt ... comparing todays expectations of reward and risk in stock ownership to what it was 30 years ago is like comparing a Yugo to a Lexus.
I usually agree with you at some if not all levels but on this one, I just don't even remotely see the comparison.

 

[pretzel_man]

PMan, you appear to be rational......If UPS was still private what do you think the present price of the stock would be ?....

All things equal, the stock would probably be worth about 1/3 less than it is today.

Before you get angry, understand my logic....

When UPS was private, the P/E ratio went anywhere from 12 to 15. We are currently running about a 19 P/E ratio (I think).

So, unless one argues that being private would have resulted in more revenue, we are worth more as a public company.....

That being said, I would much rather that we were private. Even if the result is that the stock would have been worth less, we would not have seen 10 years of no growth. We would have seen slow growth over that time and at least would have felt some rewards.

 

[pretzel_man]

Sorry P-Man but that dog don't hunt ... comparing todays expectations of reward and risk in stock ownership to what it was 30 years ago is like comparing a Yugo to a Lexus.
I usually agree with you at some if not all levels but on this one, I just don't even remotely see the comparison.

Hoax,

It has nothing to do with risk and reward. It has to do with acting like a manager. Of course the risk and reward is different today.

Whether a Yugo or Lexus, there is an expectation of acting like you own the vehicle.

The problem today is lack of growth. Our competition has taken and continues to take our volume.

When the management committee makes moves, its our job to execute those decisions as best we can. Instead, some choose to complain at every turn.

Of course, blind obedience is not what I suggest. That is not helpful. On the other hand we have blind complaints.

 

[Karma...]

All things equal, the stock would probably be worth about 1/3 less than it is today.

Before you get angry, understand my logic....

When UPS was private, the P/E ratio went anywhere from 12 to 15. We are currently running about a 19 P/E ratio (I think).

So, unless one argues that being private would have resulted in more revenue, we are worth more as a public company.....

That being said, I would much rather that we were private. Even if the result is that the stock would have been worth less, we would not have seen 10 years of no growth. We would have seen slow growth over that time and at least would have felt some rewards.

PMan, only an irrational being gets 'angry" when presented with a rational thought.....Id say that most people either never had an original thought or couldnt recognise one if they did...probably confused it with a headache....

 

[FracusBrown]

Hoax,

It has nothing to do with risk and reward. It has to do with acting like a manager. Of course the risk and reward is different today.

Whether a Yugo or Lexus, there is an expectation of acting like you own the vehicle.

The problem today is lack of growth. Our competition has taken and continues to take our volume.

When the management committee makes moves, its our job to execute those decisions as best we can. Instead, some choose to complain at every turn.

Of course, blind obedience is not what I suggest. That is not helpful. On the other hand we have blind complaints.

I'd say supporting your own reductions in compensation is about as close as you can come to blind obedience without actually being blind. Acting like management should also include being honest. I don't see any blind complaints. Everything in the original post can be verified or is predicted based upon reasonable expectations.

 

[Popeye]

It has nothing to do with risk and reward. It has to do with acting like a manager.

Yeah, and acting like a manager has to do with being treated like one. It's been a long time since anyone I know has been treated like one. Authority to make and execute decisions continues to erode, but accountability for results keeps tightening. Sorry, but you can either tell someone what to do or you can tell them how to do it. You tell them both and you're responsible for the outcome. UPS has turned into a place where "success" comes to the butt-smooching yes-men, not the people who actually make things happen. Based on your posts here Pretzel, I've got a pretty good idea where you fit in, Partner.

 

[Catatonic]

Hoax,

It has nothing to do with risk and reward. It has to do with acting like a manager. Of course the risk and reward is different today.

I think we must be talking about different things. I'll let it go.

I was talking about a manager acting in self-interest as a owner manager. I'll read this thread tomorrow and see if I understand where you are coming from then.

 

[pretzel_man]

I'd say supporting your own reductions in compensation is about as close as you can come to blind obedience without actually being blind. Acting like management should also include being honest. I don't see any blind complaints. Everything in the original post can be verified or is predicted based upon reasonable expectations.

Of course its verifiable. I didn't oppose the content, just the flavor. Its also only a portion of the story.

Being a leader in ANY enterprise requires balance. There are multiple constitiuents:

Hourly employees, Management, Customers, Shareowners, Communities, etc.

Where did the money from those decisions go? They went back to the shareowners as profit. They went back into the business.

Of those constituents, are shareowners (which management is also) over compensated?

 

[pretzel_man]

I think we must be talking about different things. I'll let it go.

I was talking about a manager acting in self-interest as a owner manager. I'll read this thread tomorrow and see if I understand where you are coming from then.

Hoax,

In ANY organization, leaders are supposed to look out for the interests of the ENTIRE organization. UPS management people are supposed to be leaders.

I was pointing out that this is not the first time in our history where top management had to balance priorities. I agree that times were different then, but the concept remains.

While it was easier then to think like an owner, the concept is still sound.

 

[FracusBrown]

Of course its verifiable. I didn't oppose the content, just the flavor. Its also only a portion of the story.

Being a leader in ANY enterprise requires balance. There are multiple constitiuents:

Hourly employees, Management, Customers, Shareowners, Communities, etc.

Where did the money from those decisions go? They went back to the shareowners as profit. They went back into the business.

Of those constituents, are shareowners (which management is also) over compensated?

Industry standard compensation is the new goal. The expectations are above that of the industry. If you pay industry standard, then you must expect to receive industry standard and vise versa. The commitment and dedication will fade away as compensation falls. If you are not seeing that, then you are truly blind.

Principal agent problem is a well known issue among corporate America. The theory is that the board makes decisions that positively impact themselves at the expense of the employees and the company. For each dollar they are successful at raising share price they can multiply that amount times the number of shares owned. The short term goals of the board in their own self interest will likely have diastoles effects on he long term health of the company. Allowing the stock to go public the most clear example of this. The second most clear example is taking advantage of the management people simply because they can. It has ruined morale, dedication and commitment, three of the things that have made this company successful.

Communities have taken a reduction. The UW contribution rate was changed to a flat 15% of employee contribution. this resulted in a reduction to the united way on the companies part.

Hoax,

In ANY organization, leaders are supposed to look out for the interests of the ENTIRE organization. UPS management people are supposed to be leaders.

I was pointing out that this is not the first time in our history where top management had to balance priorities. I agree that times were different then, but the concept remains.

While it was easier then to think like an owner, the concept is still sound.

The concept of thinking like an owner was significantly limited when the MIP formula was redesigned. In the old plan, management directly benefited by the profitability of the company. They also were directly negatively impacted by reductions in profit. I understand the concept, but it should be a two way street.

Looking out for the entire organization used to include looking out for the so-called partners.

Every real owner I know, takes a reduction in pay as a last resort and only when it is truly necessary. If it can be demonstrated that there is truly a need to reduce compensation, then it may be better supported. When the company is making record profits, growing, and making unnecessary acquisitions, this will be difficult to demonstrate to any sensible person.

 

[pretzel_man]

Yeah, and acting like a manager has to do with being treated like one. It's been a long time since anyone I know has been treated like one. Authority to make and execute decisions continues to erode, but accountability for results keeps tightening. Sorry, but you can either tell someone what to do or you can tell them how to do it. You tell them both and you're responsible for the outcome. UPS has turned into a place where "success" comes to the butt-smooching yes-men, not the people who actually make things happen. Based on your posts here Pretzel, I've got a pretty good idea where you fit in, Partner.

Popeye:

First of all, you certainly do not know me or how I treat other UPSers (this includes BOTH those I manage and who manage me).

I agree that you cannot tell someone BOTH how to do a job and the expected outcome. I do not treat my people like that and my manager doesn't treat me that way.

There are lots of ways to get ahead in UPS without kissing any tail. The main way to succeed is to look at the entire picture. Seems to me that you are refusing to do so. I have a different perspective than you, so you assume that I have no integrity and am a yes man......

I look at each situation on its own. Do you? This thread was about a change in management compensation. Still, no one has pointed out how this specific change reduced compensation.

Past losses and the possibility of future losses have been brought up.....

I have asked many times..... Go ask the division manager if he / she has the wrong plan on the road. You will not find one that says they are not in control. That is where it all starts. Plans are done locally. If a center manager thinks he / she can't run their own operation, do they have the guts to talk with their division manager?

 

[pretzel_man]

Industry standard compensation is the new goal. The expectations are above that of the industry. If you pay industry standard, then you must expect to receive industry standard and vise versa. The commitment and dedication will fade away as compensation falls. If you are not seeing that, then you are truly blind.

Principal agent problem is a well known issue among corporate America. The theory is that the board makes decisions that positively impact themselves at the expense of the employees and the company. For each dollar they are successful at raising share price they can multiply that amount times the number of shares owned. The short term goals of the board in their own self interest will likely have diastoles effects on he long term health of the company. Allowing the stock to go public the most clear example of this. The second most clear example is taking advantage of the management people simply because they can. It has ruined morale, dedication and commitment, three of the things that have made this company successful.

Communities have taken a reduction. The UW contribution rate was changed to a flat 15% of employee contribution. this resulted in a reduction to the united way on the companies part.




The concept of thinking like an owner was significantly limited when the MIP formula was redesigned. In the old plan, management directly benefited by the profitability of the company. They also were directly negatively impacted by reductions in profit. I understand the concept, but it should be a two way street.

Looking out for the entire organization used to include looking out for the so-called partners.

Every real owner I know, takes a reduction in pay as a last resort and only when it is truly necessary. If it can be demonstrated that there is truly a need to reduce compensation, then it may be better supported. When the company is making record profits, growing, and making unnecessary acquisitions, this will be difficult to demonstrate to any sensible person.

Last time I looked, our compensation was still about the industry average. Well above it. The lack of growth is the issue.

A real owner only takes a reduction as the last resort?? Not sure about that one. Multiple family members and friends own their own business. They all took deep cuts with the recession. Things are better now, but they were the first to feel the pinch, not the last.

So, you make the call. Where do the cuts come from?

Charge customers more? They are already paying a premium.
Reduce profits, dividend? Already no growth for the shareowners.
Ask for concessions from the union? Always a bad idea unless in dire straits. Heard directly McDevitt on that one.
Reduce spending on the future? Reduce IT, B&friend, etc.

Its easy to complain. Harder to make a decision. The MC did what they could to balance everything. The issue isn't the choices, its the lack of growth.