Stupid Compensation Plans – The Next Chapter

Fred WhittleseyConscious Compensation: The Impact Compensation Blog, Effective Equity: The Equity Compensation Blog, Pay and Performance: The Compensation Blog

I am not understanding how a prospective, not retroactive, reduction in corporate tax rates should result in boards of directors and executives thinking that this should justify a $1,000 bonus for every employee.  Whether you are an airline, or a bank, or neither an airline or a bank.  Nevermind pay-for-performance so that people about to be fired get the same as the superstars. Ignore that $1,000 to a $30,000/year employee is huge compared to the same for a $200,000/year employee.   Don’t give any thought to the notion that $1,000 is a suspiciously round number or that this has every indication of yet another meaningless compensation fad.

This one, now, has rumors of political bribery.  Give employees some money – and make it simple, just give everybody $1,000 to minimize the mental effort and administration, get into the headlines and poof! we get some political points.

This is a truly disgusting development and trend and while it’s nice to share additional money with employees, has the potential to backfire on these companies in many ways.

Remember when the Republican political platform in 2016 was to “enable workers to become capitalists“…this does not do that.  It is socialism, not capitalism.  Let’s indeed encourage employees to be capitalists, through ownership, and give everyone shares of stock but please put a little more thought into it.