Here’s an instructive contrast of pieces from Forbes. First, this:
Christmas came early at Hilcorp Energy. Despite the depression in the oil and gas sector, this year employees are enjoying a $100,000 bonus.
It’s the continuation of a tradition at Hilcorp, owned by billionaire Jeffery Hildebrand. Five years ago, when Hilcorp achieved its goal of doubling its oil and gas production, Hildebrand gave every employee the choice of $35,000 cash or $50,000 towards a new car. This year, despite the downturn, Hilcorp doubled its output again, to more than 150,000 barrels per day. So Hildebrand doubled the bonus — to $100,000.
With about 1,400 employees, Hildebrand’s largesse will total more than $100 million (amounts are said to be prorated depending on how much of the past five years a worker was with the company).
Yes Hildebrand, 56, has been generous with his workers, but they have helped him make an incredible amount of money — $5.9 billion by FORBES’ latest count. (But we probably ought to knock that down to $5.8 billion after these bonuses.) His fortune has about trebled since the last big bonus in 2010.
It’s a wonderful way to inspire hard work and loyalty, especially among the lower ranks, where $100,000 is well in excess of what many workers make in a year. “It’s just a true gift, and I think myself, along with everyone, is not going to give less than 100 percent each day,” receptionist Amanda Thompson told Fox 4 News in Houston.
Let’s compare that to this piece on Dan Price, the CEO of Gravity payments, who gave all his employees a permanent raise to 70K:
When choosing to use righteousness and justice as the staple for your brand, you should’ve understood how you were going to explain the lawsuit and inflated annual pay. When you find virality through a specific channel, you have to be able to defend it like a steel tank. People will look for holes in your story, and if they find one, the leak only gets bigger and bigger.
Before you went public with your announcement, you should’ve thought deeply about what brand you were creating. Was it something you wanted to put your entire company behind, and was what you stood for really that meaningful for you? Did you make sure to look back and see if anything would come to light before you swung for the fences? In a Forbes interview with Profile Defenders, Cheryl Conner warned us about how reputation management can destroy companies. Did you make sure to understand the reputation ramifications before you made your move?
On top of this, your do-gooder CEO image may never be repaired after your ex wife’s TEDx talk is released to the public. Regardless of you denying the claims, and regardless of the truth, the argument can be made that your brand will never completely recover. Every news outlet won’t stop until they get to the bottom of the story between you and your ex wife. With this kind of baggage, are you sure it was the right move to market yourself the way you did?
Unfortunately Dan, it may be too late for you to ask those questions now.
When the corporate overlords decide to piss down a little wealth on the peons, it’s what makes America great, and there’s no point looking into the background or looking for ulterior motives. When a CEO tries to give everyone stability and the ability to make longterm plans, why, wtf is he doing?
ThresherK (GPad)
The imagined childlike smiles, the assumed role of charitable receiving gratitudeness on the part of workers, is all that the business press wants for Christmas. We really don’t have to get them a gift, do we?
Dear WSJ: Should I give my CEO a macaroni art scene of the Nativity, glued to a paper plate?
goblue72
We mustn’t give the proles any bright ideas about them being anything other than replaceable cogs in the machine, whose continued employment is completely at the mercy of the Boss’ continued benevolence. Can’t certainly can’t be letting the wogs think they can, you know, ORGANIZE.
But I’m a socialist. Only good place IMHO for the malefactors of great wealth is at the bottom of a well.
Corner Stone
Every business mag and rag has been trying to undermine and otherwise bring down the CEO of Gravity. From all angles.
Hal
Wow. That Agrawhal piece is venomous. There are issues regarding an ex wife’s domestic violence accusations and a his brothers lawsuit, but what does that have to do with the 70,000 pay scale?
Corner Stone
@Hal: They’ve all been trying to prove the CEO pre-empted further action that he thought was coming by realigning the salary levels. And all kinds of other lines of attack. They are flat out going after the idea that people should have a wage above subsistence.
Mike R
Any thing above subsistence is simply robbing share holders. Next thing you know people will want insurance and paid vacation.
J C
I don’t disagree that the corporate overlords definitely look for any excuse to mock trying to share some of the wealth with the employees who produced the profit. But, it does seem like they way he lied about being sued by his brother right before he had the idea, lends credence to the idea he raised the pay not to have to give it to his brother. They had all the timelines in the piece and he definitely lied about being sued after. If he did it to fuck over his brother for some petty reason it is worth examining.
Pogonip
I was amused by the article saying Hillcorp “doubled its output,” as if the employees had nothing to do with it.
Pitchforks are too good for ’em.
This reminds me. Remember the guy who was selling land in Chile for a libertarian paradise? You will be surprised to learn that he has disappeared with the money, and even more surprised to learn that his government-hating pigeons have appealed for help to the Chilean government.
Corner Stone
@J C: His bro owns some 30% or so of the company. WTF was he doing to add value?
That’s the kind of bullshit the MOTU have been trying to tarnish the CEO with.
Emma
Question: when did a year-end bonus become some sort of anti-proletarian insult? When we first moved to the States the company my father worked for gave year-end bonuses based on profits. A couple of school friends’ parents also got them and they called them “the vacation fund.”
Schlemazel
@J C:
Business men fuck over their family, co-investors and various and sundry others on a daily basis and the business press couldn’t give even a tiny shit. Cole’s point remains.
Mike J
@Pogonip: I’m sure a libertarian paradise is being set up somewhere, they just aren’t invited.
p.a.
@Emma: my union hated bonuses; turned them down whenever offered. You want to give us $? Give us a contractual wage hike- it’s always there and adds to our base wage increase next contract.
I’m seriously thinking of finding Lewis Powell’s grave and pissing on it. Juvenile and petty, but he deserves it. I’m old, no record, probably get just a fine if caught.
Mnemosyne (tablet)
@p.a.:
It’s tough when you have a mix of union and non-union employees. Being that I work in entertainment, there are at least two different unions (probably more) in my division, plus a bunch of non-union salaried employees, and when they started giving us a performance bonus a few years ago, the only union that refused it was mine. It REALLY sucked to watch the entire rest of the division get several weeks of bonus pay while the 30 or so of us from our specific union (out of 800 total) got consolation prizes.
Management was finally able to negotiate it so we could share in the cash bonuses, but that’s the kind of thing that leads people to start asking what good the union is doing us.
p.a.
@Mnemosyne (tablet): we ended up getting one also, I think it was one of those “ok 2% instead of 3% raise, we’ll take the goddamn bonus if you’ll shut up” deals. Bonuses are taxed at 42% gift rate IIRC. I mean there’s nothing inherently wrong with helicopter money. Just can’t count on it.
Interrobang
The point is obviously “Noblesse oblige good, redistribution of wealth bad.” One supports the aristocratic order, the other undermines it.
Mnemosyne (tablet)
@p.a.:
We still got our 3 percent raise, too. The sticking point apparently was that there was a union rule that bonuses had to be given to the entire union if one was to be given, which would have meant giving it to hundreds (possibly a few thousand) people who didn’t work on the project we got a bonus for. But after negotiating for a few years, they finally came to an agreement.
ETA: It’s a project-specific bonus, so it depends on the success of a specific project, not the success of the company as a whole.
Oatler.
It’s kind of like a Dilbert strip. It will end with rich pointy-haired bosses and angry serfs (serves?).
MobiusKlein
@p.a.: bonuses have witholding at a higher rate than salary, since your normal witholding covers the lower tax brackets, and bonus only hits your highest one. Come April 15, it works out
The Ancient Randonneur
Balloon Juice is now objectively pro-domestic violence. Nice.
Mandalay
@The Ancient Randonneur:
My thoughts as well. If the ex-wife of a Republican politician alleged “He started punching me in the stomach and slapped me across the face.” would everyone here be giving him a free pass? And would we be saying that the article reporting the alleged violence was “venomous”?
mclaren
@Pogonip:
He didn’t “abscond with the money”–he’s gone Galt!
boatboy_srq
Shorter Forbes: a redeemed Scrooge is preferable to Dickens’ ideal man.
The lessons of that great writer’s collected works are completely lost on these volk.
Nutella
@Mandalay:
That word does not mean what you think it means.
Also you may want to consider what a blog with a dozen front pagers and hundreds of commenters is “for” or against.
Shane
I’m missing the bit where anyone’s giving him any sort of pass. AFAICT we haven’t discussed the violence at all, certainly not positively. I hope any abuser cuts that shit out and faces the full force of law, but that doesn’t change the worth or weight of the pay increase. Just like some violent asshole being kind to dogs doesn’t stop them being a violent asshole.
Same with him having shady motives or pressures. So? Have you heard that one reason the feds ultimately supported the civil rights campaigns in the US, was because of how much it was hurting them in PR in the Cold War. You still got an improvement in civil rights and race relations.
SteverinoCT
I work as a two-man division of a larger 150-ish employee company, under the boss’s son. For a while, I was getting a 3% end-of-year bonus. Then that stopped, but I got a 3% raise. So I’m breaking even, but the boss is saying, “Look, you got a raise!”.
Just to round it out, the boss retired and sold the company to a bigger one, with us to remain mostly autonomous. Come Jan 1 we are being integrated into their payroll system; we operated on a 38.75-hour week, they on a 40-hour week. So we are going from a 45-min lunch to a 30-min lunch to bring us to 40 hours, with no corresponding increase in pay. Essentially a 3% pay CUT (of course, for me, it’s a 2-man office away from the main site and I eat at my desk, mostly: the lunch break is a mythical, highly variable thing, but it’s the principle).