Text message this morning from CNN: Unemployment hit 10.2% in October. Microsoft announced earlier this week another 800 employee layoffs to the 5,000 previously announced employee layoffs. If you look at Microsoft's financials you see why, a 14% revenue and 18% net income drop for the last reported quarter, on top of disappointing prior quarters. Meanwhile, Microsoft's top five executives are set to earn an estimated $31 million in total pay for 2009. One the plus side, Microsoft's stock is starting to make a climb back, having come back from $14.97 in March 09 to a close of $28.47 in yesterday's trading. (Keep in mind the 52 week high is only $29.35.) Much of that though is attributed to "efficiency gains", e.g. millions in cost cutting measures, a.k.a. layoffs, and a successful Windows 7 beta and launch.
It's easy to point at Wall Street, AIG and the banking sector and call foul when execs lavish themselves with big bonuses after receiving billions in taxpayer money to keep them afloat. But the same issues are present in the board rooms of our corporations. How can executives at corporations lavish themselves with huge payoffs when thousands of their employees are losing their jobs and stockholders are still smarting from record losses. Clearly our board of directors system in business is broken too, perpetuating the "executive club" mentality that their executives are too valuable to lose.
Where has any sense of social consciousness gone in our corporations? Many small businesses see part of the their role to employ people within the community they work and live. If that sentiment was ever present in our large corporations it's surely long gone now. Our biggest export from Corporate America these days seems to be jobs, not goods and services. We may be pulling out of this deep recession but improvements to many company's bottom lines are due to reduction in staff more than an increase in revenue.
Microsoft is facing its most grave threats ever, with Google Apps, Google Docs and Open Office swinging business users away from Microsoft Office, Apple Macs and Linux boxes more prevalent than ever, the iPhone long ago dethroned Windows Mobile and Google Android is ramping up, and open source is fueling so much of our Internet cloud infrastructure. Windows 7 may at least get Microsoft back on track with a decent end user OS, but that's merely to regain ground and make up for past mistakes. It will be a long time before Microsoft has truly recovered from Vista.
Should the top five executives at Microsoft really be pulling in $31 million when the company is in the midst of layoffs and still hemorrhaging from competition that's stronger than ever? Maybe I'm being a idealist but nothing will change if we continue to keep our opinions to ourselves. Maybe what we need is just a little bit more idealism and care for each other.
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Exec pay at Microsoft
Are you kidding? I bet Microsoft pays its top 5 execs less than any other company of its size/revenue. Why don't you back this up with some statistics that compare Microsoft with some other companies? How about other industries? Are you suggesting that a financial services company like Merrill or BOA is only paying its top 5 execs $31M? IIRC, the BOA CEO got a $100M bonus for 2008 when he drove the company to bankruptcy. That's $100M paid to one exec in BOA's worst year ever. Three times as much as Microsoft paid to its top 5 execs. And Microsoft is wildly profitable by any measure. How much was paid in total to BOA's top 5 in 2008?
I don't think the point was to compare to other companies...
To be fair to the author, his point was the $31 million compared to laying people off and such. No matter how profitable, his argument is this ia a manifest unfairness - consider that cutting that in half could in theory reemploy something like 150 people. I don't think he needs to compare to other companies to make his point. Of course, one can make the counter-argument based on your comment of their profitability and that the top 5 execs do deserve that money while others lose their job, as those jobs lost were fat/unnecessary, and executives bear an unusual and arguably high-risk job (re the high-risk, very arguably, given it's unclear that when executives lose their jobs they really have significant trouble in getting another one while usually being funded in the interim with golden parachutes and such - but this argument is often made by those who defend such compensation).
Not quite
"I bet Microsoft pays its top 5 execs less than any other company of its size/revenue. "
How about Apple Computer? Steve Jobs receives $1 in pay per year.
I'll bet that's one thing Microsoft won't copy from Apple.
EXEC Pay At Microsoft - It's That Way All Around
Social Consciousness? The executives in the country don't know what consciousness means. They are all in it for themselves. I remember at a company I use to work for, when an executive was asked how he could sleep at night after announcing with a smile that there will be layoffs amongst the lower management ranks. He said he felt bad, but he must think of the shareholders first. They are they ones who pay his salary and the ones who have invested their money in the company. What a bunch of bovine feces. They don’t care about the little guy. I remember seeing a cartoon in a magazine where a balding man was sitting in an obvious corner office asking the question of someone on the phone “How many people do I have to lay off to get that extra $50,000 bonus?” That’s all they care about.
They make mistakes and the little guy who is working hard for the company takes it on the chin every time. But then again, executives don’t make mistakes; the lower level people didn’t execute his plan properly so they are the ones who have to pay.
you hit the nail on the head in one sentence -
The line about the "cartoon in a magazine where a balding man was sitting in an obvious corner office asking the question of someone on the phone “How many people do I have to lay off to get that extra $50,000 bonus?”" is really the root of the problem. Not just executive but all bonus/incentive compensation is tied most often to short-term results. People will do as they are rewarded; if your job and your bonus (and typically the two are tied - after all, if you aren't hitting the bonus marks well, you're not a performer in most company's eyes) are hostage to short-term decisions to let go lots of people, you'll do it, not because you're evil or even "merely" indifferent to others, but because this is how the system works and this is what your livelihood depends on; as you say it's "everywhere", so going to a different company will usually see a similar culture in this regard.
And it's that short-term thing that's the problem. Working to attain a yearly or more frequent bonus on short-term goals short-changes sustainability and other such business-healthy objectives, often to the point where there simply is no incentive for working towards a multi-year or multi-decade goal.
You are an idiot. You look
You are an idiot. You look at cartoons to come up with your logic. It is true that the stockholders are the ones that the board and upper management are concerned about, they pay their salaries. Microsoft and other companies aren't in business to pay people for not working. If the company sales are down LOGIC says that since income is down you must cut costs and the largest costs to a company are the personnel and benefits. If you want to get paid for doing nothing go to a communist country like Russia, China, Cuba or North Korea. This country rewards people for working and sometimes that is cutting costs (i.e. people) to get expenses in line with income.
Value system in the software industry
@Anon: If people who like cartoons are idiots, then most of us are (except Anon).
I agree we need persons with proper values at the helm of the IT companies. Especially so, as it is people intensive. When cutting costs are involved, before removing the working (!) people, go for reduction of certain percentage of the salary. Larger salaries will decrease by bigger amounts. Share the pain.
Social Consciousness? Or conscience?
Did you mean they have no conscience? Or are you saying they are unconscious, i.e., passed out, oblivious to the world around them?
This is the most ignorant article I have ever read on this site.
I don't think I have anything else I can say beyond the title. Wow. What a retard.
And that is one of the most ignorant comments I have read, too
You've added absolutely nothing to the discussion, and on top of that you had to use profanity in order to express yourself. Well done
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