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Lenovo CEO Gives His $3M Bonus To 10k Workers

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  • by Anonymous Coward on Friday July 20, 2012 @04:12PM (#40717341)

    Capitalism FTW! Boycott Lenovo.

    • by spidercoz (947220) on Friday July 20, 2012 @04:17PM (#40717411) Journal
      Yeah, how dare they make our decent, god-fearing capitalist CEOs look like money-grubbing scum.
    • by DinDaddy (1168147) on Friday July 20, 2012 @04:19PM (#40717441)

      JAL CEO did something similar and took a paycut as well. Cold day in hell before any american CEO would do this. Even if one were willing, the others would kill him in the country club locker room and bury his body on the links.

      • Re: (Score:2, Informative)

        by SJHillman (1966756)

        As I recall, there's a lot of American CEOs with a $1/yr salary. I think Lee Iacocca may have started that trend when he went to work for Chrysler (or at least he popularized it). Granted, these guys are already filthy rich and can live off their assets/investments alone but it's still a nice show of generosity.

        • by Anonymous Coward on Friday July 20, 2012 @04:25PM (#40717523)

          except their fringe benefits and perks might amount to six figures, and stock options give them a net in the millions most of the time. It might be a nice show of generosity, but it's also a nice way to have some PR and tax breaks for the uber rich.

        • by randizzle3000 (1276900) on Friday July 20, 2012 @04:25PM (#40717527) Homepage Journal

          I think that's so they can skip paying income tax, not because of generosity.

          • Not a tax break. (Score:4, Insightful)

            by Ungrounded Lightning (62228) on Friday July 20, 2012 @11:10PM (#40720975) Journal

            In the absense of triggering some government program that gives more tax reduction than the money given away, it is still a loss. He might not pay taxes on the money he doesn't get (because he had it paid to the workers instead). But that normally will be taxed at less than 100%. So he's still out-of-pocket.

            IMHO what this says is that the CEO thinks that the compensation packages the company had set up ended up giving him too much, and the workers too little, for the long-term health of the company. So he fixes it by reorganizing it - and gets a boost in morale and some good press as a bonus.

            He probably also ends up ahead long-term because the company does far better in the future than it would have without this action. But he also might be doing it because he really is an idealist and/or does care for his workers.

            Either way (if he's not a compensated psychopath who doesn't feel anything much) he gets to feel very good in his eventual retirement.

            • by Compaqt (1758360)

              Call me gullible, but this makes me more likely to buy Lenovo computers for my staff.

              Vote with your dollars and all that.

              (Note: It's not like this would be the only criterion. Lenovo offered the only/best 15" laptop with Intel VT-x and numpad and nice keyboard that I was looking for from the laptop from which this is being posted.)

        • by SScorpio (595836) on Friday July 20, 2012 @04:27PM (#40717541)

          While they have a $1/yr salary. They still have stock options and other benefits that make up the difference. This is a tax dodge and not a show of generosity.

          • Re: (Score:2, Informative)

            by Anonymous Coward

            That is right. There is a reason why news stories often refer to a CEO's compensation package. There are things more valuable then money, especially when you have plenty of liquid assets already.

          • by Red Storm (4772)

            Consider this, if a CEO takes a $1 pay package and receives only company stock as their benefits package that means the company has to do well for them to make money. In addition *you* are free to invest in these companies and "freeload" on their incentive package and earn some income as well.

            • by publiclurker (952615) on Friday July 20, 2012 @05:33PM (#40718473)
              that the CEO has to do something to cause a quick spike in the stock price when he wants to cash in. Generally, this is done by firing a bunch of people. It doesn't matter if this tanks the company, as the CEO's already gotten his cash.
              • No, actually it means that the CEO has to do something to cause a quick spike in the stock price when he wants to cash in.

                (reminds me a bit also of the "pump and dump" phrase)

                That almost sounds like "insider trading" except by one person rather than two. Is that legal? (assuming you get caught and they can prove it to the court's satisfaction of course, since it doesn't matter if it's legal or not if you don't get "caught")

        • by Anonymous Coward on Friday July 20, 2012 @04:29PM (#40717609)

          As I recall, there's a lot of American CEOs with a $1/yr salary. I think Lee Iacocca may have started that trend when he went to work for Chrysler (or at least he popularized it). Granted, these guys are already filthy rich and can live off their assets/investments alone but it's still a nice show of generosity.

          I thought this had more to do with tax evasion? Get paid through capital gains rather than salary and pay less taxes.

          • by DriveDog (822962)
            I think it was actually more because 1) he already planned to ask the Feds for a bailout and knew he'd be more likely to get it that way, and 2) if he succeeded, he'd get a huge "compensation package" in a year or two.
        • by dAzED1 (33635)
          ....generosity? For someone living in California, the top tax bracket is 48.3% for salaried income. Qualified dividends, on the other hand, have ranged from 10-15% in recent history. There was nothing remotely "generous" about the pay he took. The Google founders do the same thing.
        • by Nadaka (224565) on Friday July 20, 2012 @04:40PM (#40717779)

          They have a $1 salary because salary is taxed at the higher rate reserved for the lower class. The CEO's get all their compensation in the form of stock options, and that is taxed at the lower rate reserved for the gentry and with a good enough accountant and a multinational organization capable of shifting money about, it may not be taxed at all.

          • by Solandri (704621)

            They have a $1 salary because salary is taxed at the higher rate reserved for the lower class. The CEO's get all their compensation in the form of stock options, and that is taxed at the lower rate reserved for the gentry

            Do note that to pay more in income tax than the 15% long-term capital gains tax rate, you need to make at least $54,575. Other deductions and exemptions will push the threshold income level even higher.

            $5,950 tax-free as standard deduction
            next $8,700 taxed at 10% ($870)
            next $26,650 t

        • by 3dr (169908)

          "Generosity" was not the word I had in mind.

        • by tlhIngan (30335)

          As I recall, there's a lot of American CEOs with a $1/yr salary. I think Lee Iacocca may have started that trend when he went to work for Chrysler (or at least he popularized it). Granted, these guys are already filthy rich and can live off their assets/investments alone but it's still a nice show of generosity.

          It's a PR positive move, yes, but it's also a tax-avoidance move.

          You see, capital gains are taxed lower than regular income. When these CEOs file tax returns, they pay the tax on that $1 salary, but

        • by Peter H.S. (38077) on Friday July 20, 2012 @06:08PM (#40718883) Homepage

          $1/yr salary is simply a tax evasion scheme since wages are taxed much higher than the stock options etc. that they receive instead. These tax dodging assholes that won't pay for police, road maintenance or any thing else that is tax funded, even portrait this scheme as something modest. They make me puke.

      • by jdastrup (1075795) on Friday July 20, 2012 @04:39PM (#40717771)
        I'm not sure of the temperature in Hell that day, but I believe it was pretty mild in the OC when the eMachines CEO did the same thing in 2004 with his $72 million. http://www.johnhui.com/newsocregister.html [johnhui.com]

        Interesting, though, that the CEO, John Hui, was also Chinese
      • by cpu6502 (1960974) on Friday July 20, 2012 @04:50PM (#40717941)

        >>>Cold day in hell before any american CEO would do this

        There was an American company I saw profiled by ABC's John Stossel back in 2009. Unfortunately I forget the name, but the CEO decided not to have layoffs. Instead he agreed to take a cut in pay to the same level as the workers' pay, in order to keep everyone employed. I guess hell froze over that day.

      • by cant_get_a_good_nick (172131) on Saturday July 21, 2012 @01:26AM (#40721451)

        Jokes aside, when Henry Ford gave his workers raises, he was labelled a socialist. Even though his workers were much more efficient, and made Ford rich, when Hank gave even a part of that money back to the workers, he was labelled socialist.

        The trick is, Ford new that he needed a work force that was paid well to buy his cars. The payroll that you call an expense is actually the wages that can purchase someone else's product. And then the payroll that goes to those workers can buy someone else's product. All a virtuous cycle. Pardon the car reference, but some times money is like oil in a motor - it only does it's work when it circulates and when it stands still the motor seizes.

        Sadly most CEOs now don't have that foresight. We've been taught so much "make it someone else's problem" and "the only people you think of are the stockholders" that we've lost any vision. We're taught that unions are evil. Though they've seriously lost their way, they had use where they forced wages for everyone above some point so that the cycles can continue, and payrolls are squeezed to where we can't afford anything.

    • by cpu6502 (1960974)

      Haha.

      People have corrected me when I said the free market is like a pure democracy (people vote with their $'s for the companies they like). They say that democracy is a form of *government* and does not apply to private transactions. Well..... the same applies here with the private transaction between this guy and his colleagues within the corporation. It's not communist. It's not government.

      • by spidercoz (947220) on Friday July 20, 2012 @04:27PM (#40717545) Journal
        You are in fact correct, free market and pure democracy are similar; they both treat everyone the same, and they're both fucking mythological.
      • by F69631 (2421974) on Friday July 20, 2012 @04:57PM (#40718015)

        Many Americans don't seem to know (or perhaps care about) distinctions between communism (the form of utopia which countries like the Soviet Union supposedly wanted to achieve) and socialism (the system they intended to use in the transitional phase). Oversimplifying a bit... Communism is supposed to be a state where there is such an abundance of resources that everyone can get whatever they need and the motive to work would come not from material goods but from the social status that good workers receive, the idealistic desire to work for the good of mankind and stuff like that. Socialism is the idea that when a government takes control of the means of production and puts them to good use, the results are in some way (be it productivity, philosphical differences or whatever) better than than what capitalistic society can achieve... and if the difference in productivity is great enough, it could some day result in the overabundance of resources needed for communism.

        So... When a CEO decides that he wants to give away huge sums of money (for social status and/or idealistic reasons... in a situation where he must have overabundance of resources for himself, because he is able to give away millions) and that the best receiver for the money are the workers that have produced the said wealth, I think that one could argue that it's - in small scale - very similar to how communist utopia was supposed to work.

        Naturally this is all just a mixture of being pedantic and some form of thought experiments... but then again, what could you expect in a thread like this.

        • by magarity (164372)

          Communism is supposed to be a state where there is such an abundance of resources that everyone can get whatever they need

          All economic systems are attempts to deal with scarcity of resources; there isn't suddenly an abundance of resources because a certain system was adopted. Furthermore, you're confusing resources with materials. Labor, capital and materials are the three equally needed resources for economic activity.

    • by GameboyRMH (1153867) <{moc.liamg} {ta} {hmryobemag}> on Friday July 20, 2012 @04:23PM (#40717495) Journal

      You joke but I actually saw arguments along these lines not long after the 2008 economic crash. People worried that if the CEOs of the banks that took government loans didn't get obscene bonuses as usual, it would pressure other banks which weren't bailed out to do the same and that would be un-capitalist government interference.

      There's no hope for you guys, sorry.

    • by organgtool (966989) on Friday July 20, 2012 @04:27PM (#40717559)
      Agreed! How can they expect their country to become successful if they don't proliferate the idea of only rewarding the people at the top? If they keep up this shit, the money will never trickle down!
    • by neonv (803374) on Friday July 20, 2012 @04:35PM (#40717707)

      Capitalism does not preclude altruism. Charity work has always flourished in capitalistic societies.

  • by Anonymous Coward on Friday July 20, 2012 @04:12PM (#40717353)

    You don't see that often. Very refreshing and restores a little faith in humanity.

    • by pwizard2 (920421) on Friday July 20, 2012 @04:22PM (#40717487)
      I wish we had more guys like this running companies in the US instead of the greedy sociopathic bastards we have in abundance.
    • by Anonymous Coward on Friday July 20, 2012 @04:30PM (#40717615)

      Yeah, this guy sounds like a pretty good guy. Except, of course, that his bonus is equal to what about 10,000 employees make in a month. Doesn't really make his company seem that great. I'm not saying it's not common, but it a good example of how messed up the system is. Do you really think that guy benefited the company, over what he was already making in a year, more than what 833 people do in a whole year?

      • Re: (Score:3, Insightful)

        by thereitis (2355426)
        If he is directly responsible for keeping a company afloat which keeps 10,000 people employed, what is that worth?
      • by DriveDog (822962) on Friday July 20, 2012 @05:35PM (#40718497)
        And that is exactly the point! CEOs taking 1,000 times more than low-level employees implies that their activities somehow create 1,000 times more profit (or income, or whatever measure you want) than the activities of the lowest-paid and 100 times more than upper-mid-level employees. Or to put it another way, it implies that one individual at, say, $20M/yr is worth more than 10 of the next-best available at $2M/yr. I don't believe it for a minute.
  • by G3ckoG33k (647276) on Friday July 20, 2012 @04:16PM (#40717393)

    http://www.thelocal.se/41536/20120619/ [thelocal.se]

    Family-run firm Nominit in Värnamo, southern Sweden, will be paying out 114 million kronor ($16.3 million) to their current and former employees in a gesture of goodwill. The company was founded in 1937 and is the two founders and owners have no heirs to their fortune. The company, which currently has about 50 employees, manufactures rivets and has a turnover of about 100 million kronor, of which 60 comes from export.

    $16,000,000 to 50 workers.

  • by ClickOnThis (137803) on Friday July 20, 2012 @04:17PM (#40717407) Journal

    Nice to see a "servant-leader" taking a step like this.

    • by MozeeToby (1163751) on Friday July 20, 2012 @04:25PM (#40717521)

      Keep in mind, his total earnings for the year were $14 million. At a company where, according to the summary, $300 is an average month's salary. Not to take away from what he did, giving up $3,000,000 is still an amazing thing to do, but it's gotta be easier when you bring in $14 million a year than it is otherwise.

      • Keep in mind, his total earnings for the year were $14 million. At a company where, according to the summary, $300 is an average month's salary. Not to take away from what he did, giving up $3,000,000 is still an amazing thing to do, but it's gotta be easier when you bring in $14 million a year than it is otherwise.

        Point taken. Like I said, it's a step.

        As other posters have said, a raise for all of the employees would be even better. And it sure sounds like the company brass could afford it.

  • Holy Crap! (Score:5, Insightful)

    by NeutronCowboy (896098) on Friday July 20, 2012 @04:19PM (#40717443)

    That guy just earned himself some serious loyalty from the peons. Nothing says "I couldn't have done this without you" like sending a serious bonus down to everybody. The execs won't care, as that won't cover a day of their salary, but the people at the bottom of the ladder will appreciate it. Interesting that that came from a Chinese owner. I'd be curious to see what American CEOs think of that, and what their response would be to the question "Would you ever give you entire yearly bonus to your employees, and why?"

    • This wasn't his entire bonus, just a boost to his bonus for having Lenovo's best fiscal year yet. Still a good deed.

      "Yang had earned $5.2 million in bonuses for the fiscal year ending in March. His total earnings, including salary, incentives and other benefits, amounted to $14 million, according to the company's annual report."

    • by Idbar (1034346)
      Well, some CEOs may be just thinking what they would have done with those 3 million instead of sharing them with anyone else.

      Now, bankers on the other hand are probably thinking "meh... pocket change".
    • I guess that depends on their current salary, and the size of the bonus...I can give my 150$ bonus to all the employees under me and it wont mean bubkus...
      I could also have employees that on average make 75,000 and up per year, and consider that an insult (being they only got THAT bonus...not to be added to the already existing bonus from their company)....300$ is not worth a reply or extra karma points from them, while a months pay to a chinese employee...is a lot!!!

      context

      • Re:Holy Crap! (Score:5, Informative)

        by NeutronCowboy (896098) on Friday July 20, 2012 @04:34PM (#40717687)

        I agree that context is important when considering the impact. However, I have to say that if my manager or my CEO distributed their bonus out to all the people underneath them, my respect for them would go up tremendously - even if it would amount to only an extra beer at pub night for me. The important part is that they were willing to forego something that their contract said they were entitled to, and instead chose it to say thank you to their employees in a very direct manner.

        • Amen, brother. It's not that 50 cents that I get, but the gesture itself that would rise the guy on a long-lasting mental pedestal.

    • Re:Holy Crap! (Score:5, Interesting)

      by Mike Buddha (10734) on Friday July 20, 2012 @06:02PM (#40718803)

      At my work, in 2008 we were still profitable, but the downturn was coming and we all knew it. The senior execs all forewent their own bonuses, but they distributed bonuses to all the lower level folks. I tell you that single act bought them a ton of loyalty from myself. We finally got back to profitability last year and the bonuses came back for everyone this year.

      • by Wolfrider (856)

        --Absolutely. If I get around to buying a laptop $soon, I will remember this and look closely at Lenovo.

      • My bonuses are fixed. They are written down in plain English in my contract. They even have a fancy name like variable performance pay for them. It has stopped becoming a tool to motivate long ago.

        It used to be my bonus was a percentage of my pay grade, but that percentage was adjusted based on my personal performance, and the performance of our local business. Great, motivating and quite clear. Didn't really mind that scheme much since it meant that bonuses weren't really at the whim of some manager who wa

  • Wow i thought all the CEO's of today's world were all psychopathic assholes. It's really cool to see there is at lest 1 CEO left on this planet that is an actual living, human being with a real beating heart.
  • by gatfirls (1315141) on Friday July 20, 2012 @04:20PM (#40717451)
    ... with some bearded dudes riding them just rode by me, makes sense now.
  • Kingston technology (memory manufacturer) split $100 million between 500+ employees. They also gave scholarships to all the local schools (mine included) - http://articles.latimes.com/1996-12-15/news/mn-9424_1_million-bonus-employee [latimes.com]

  • by JustAnotherIdiot (1980292) on Friday July 20, 2012 @04:20PM (#40717455)

    $300 per employee, which is about a month's worth of salary.

    If you're only paying your employees a measly $300 a month, how about a raise instead?

    • These are Chinese factory workers we are talking about here. $300/month is a shit ton of money for them.
    • by tmosley (996283)
      Those will come. A bonus is a half measure when you can't afford to commit to higher wages yet.

      Of course, the Chinese government could end their dollar peg and allow the value of those wages to rise, giving everyone in their country a de facto raise.
    • by spidercoz (947220)
      It's China, that's probably the equivalent of $3000 in the US.
  • A good example of how big these fat cat bonuses are, for most workers a month's salary is significant.
    And it's a good example to his fellow CEO's but I'm not holding my breath waiting for the next to share his bonus.

    Send from a much appreciated Thinkpad :)

  • by stanlyb (1839382) on Friday July 20, 2012 @04:23PM (#40717491)
    I am on crossroad, from one hand we have:
    1.CEO receiving $3mln bonus, not salary but bonus. On another hand we have:
    2.Regular Joe's medium monthly salary of "$300"....
    ---------------
    So i wonder which one is worst, a company with so low medium salary, or a company with so much big CEO salary....
    PLEASE, help me decide...
  • Not belittling what he did by any means but "Gives his $3M" is different from "Gives $3M from his bonus" is different.
  • I've seen a number of posts talking about how American CEOs would never do such a thing. I'd really like to know where this sort of self-deprecating delusion originates. Common sense alone would dictate that this has had to have happened more than once in US. Searching on Google brings up a wall of spam, linking to the same Lenovo story. But look elsewhere and you'll see plenty of stories of CEOs paying out very generous benefits to all employees, or forgoing on payment of any kind during tough times.

    And wh

  • I submitted this as a story 2.5 hours before ndogg did [slashdot.org], and he gets the credit for it. Well played, sir.
    • Yes, but ndogg is a cooler user name, so by the rules of /. the glory is hereby assigned to ndogg. Eeeeeeehnnnndaaaawwwwwg.
  • At the time, I bought it because it was the cheapest one I could buy with a standard keyboard layout, but I am retroactively pleased with that decision.
  • In the good old days say 40-50 years ago in Greece, money that was handed to the poor was often indicated as if it came from the pocket of the king. So my mother has the impression that the king was giving a dowry to poor girls, or the king was the godfather of thousands of poor kids. Now imagine if that happened today, and lets say they give the president 100billion in wages and then the president went off willy-nilly and gave money to the poor as he/she chose. The advantage of such a system is that goo
  • ...for the bonus money.

  • Capital Gains Taxes (Score:4, Informative)

    by thesandbender (911391) on Friday July 20, 2012 @10:10PM (#40720659)
    I see a lot of comments here about how this is all a dodge to get around income taxes with capital gains taxes.

    1. This is a Chinese CEO in Hong Kong, not the U.S.
    2. Carter _decreased_ capital gains tax rates, Reagan _increased_ them and Clinton _decreased them (to be fair, Bush Jr. decreased them even more).
    3. Capital gains are taxed at a higher rate based on your income (again to be fair, people with a lower income can't take advantage the same way).

    Capital gains taxes have a place, the idea is to encourage investment, which is why long term capital gains taxes are lower than income taxes rates but short term capital gains taxes pretty much mirror income tax rates.
    http://en.wikipedia.org/wiki/Capital_gains_tax#United_States [wikipedia.org]
    http://en.wikipedia.org/wiki/File:Maximum_Federal_Tax_Rate_on_Long_Term_Capital_Gains_(1972_-_2012).jpg [wikipedia.org]

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