I was afraid this was going to be some story about top-level management cutting jobs in the harsh economic climate, and then rewarding themselves (only somewhat handsomely) with bonuses. I'm glad to see an uplifting story instead.
From the perspective of the purchasing company, I wonder what effect it would have on employee retention. The article mentions that life hasn't changed much in the interim, but it was also unexpected. Some employees may find this a good opportunity to strike out on their own, or retire just a bit earlier.
I would be curious to see if the aggregate effect is one of employee loyalty or loss.
I had similar thoughts ("great, investment bankers & traders perturbed their six figure bonuses are only going to be five figures this year") upon seeing the headline.
Glad I read your comment and checked out the article.
It's a somewhat hard life being a financier because your pay is so variable. You might mock the I-banker who got "only" a 5-figure bonus, but what if he took out a mortgage in 2004 with his new wife on the premise that he would be making six figures? Variation is a cost of the lifestyle, and a stressful one at that. It is hard to make any long-term plans. On that note, it's rare to find bankers without family trouble, due to both the work hours and the financial issues.
Plenty of people with highly variable pay save most of their income in the good times to deal with this. Dumping 80% of that 100k bonus into savings might not feel glamorous, but it's going to help your home life more than you might think. And down the road you can transition to a lest intense job and have enough savings to top off your lifestyle.
PS: Then again spending more than you make seems is far more common among the highly compensated.
It can also have a positive effect. If the workers think the new owners will cutting job, they will start looking at alternatives. With a $33k check they don't have to worry about it as much.
He had an independent uranium geology/prospecting/speculating business in the 70s -- with a bunch of young roughneck employees he would go out with a drill rig to the middle of nowhere on private land, trading a new well to the landowner for the opportunity to take a core sample.
He was making decent money in mining claims, then Three Mile Island happened, and uranium prices dropped through the floor, killing all cash flow. A bunch of the employees effectively became family, practically living with them on little pay.
When uranium prices bounced back in the 90s, my grandfather sold a number of claims (the business's previously-worthless assets), and his old loyal employees who had eventually moved on to paying work got really late 5-figure+ bonuses.
I think that is a very kind and generous thing those employers have done. Had it been me, I would have considered it even more kind and generous to structure the bonus such that it was not lump-sum.
Sudden wealth, even sudden relative wealth, destroys a lot of people who are not used to dealing with it.
Heck, banking on the power of defaults (90% of employees choose the default contribution for their IRA, 90% choose the default withholding, 90% choose ...), you could probably have accomplished as much good by giving everyone a letter saying:
"Thank you for your service. You are being given a large bonus this year. You have two options for receiving it: less money now or more money later. If you want to receive more money later, do nothing. If you want to receive less money now, fill out the attached form and hand it to your supervisor by Christmas."
If you've got $6.5 million to give away I'm fairly sure you can pay some lawyer $10k to set up a trust. (Heck, just give him a slice of the interest on the trust -- half a percent should cover his expenses nicely.)
It's about time people working for companies making real, actual things were rewarded for the wealth they create in the same style as mere symbol-manipulators.
Sure - it's an awesome story and more should do it, but you give the impression that manufacturing is more noble or meaningful than "mere symbol manipulation". Is software a "real, actual thing"? Is cancer research a "real, actual thing"? We can't all work in the industrial sector - nor should we.
If the stock market doesn't create real wealth, then why is it so successful? Is it merely siphoning real wealth away to the pockets of parasites?
The stock market is about giving money to those who will use it most effectively, so, when done right, it can be seen as very efficient resource allocation.
At best, the market's the place where funding originates. It helps others create wealth. At worst, it's merely a middleman, pocketing a cut of other people's transactions. This is accepted as it's useful to have a "market for money", but I would not say it creates wealth in the same way as something that processes ideas to sellable code or raw materials to finished product.
Both code and the market create value by processing information. Code can break too, but that's not an argument against writing code. So, I'm not seeing a strong argument that the market is essentially different than any other sort of value creating information processing we do.
"When it's done right" being the operative words there. When it's not you get the subprime crisis. Those bankers might not be getting a bonus this year, but they won't be handing back the millions they made when they were setting us all up.
It's about time people working for companies making real, actual things were rewarded for the wealth they create in the same style as mere symbol-manipulators.
"Mere" symbol manipulation can be very powerful, as Lisp macros illustrate.
From the perspective of the purchasing company, I wonder what effect it would have on employee retention. The article mentions that life hasn't changed much in the interim, but it was also unexpected. Some employees may find this a good opportunity to strike out on their own, or retire just a bit earlier.
I would be curious to see if the aggregate effect is one of employee loyalty or loss.