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The Almighty Buck Businesses

Lenovo CEO Shares $3 Million Bonus With Workers 169

hackingbear writes "Yang Yuanqing, founder and CEO of Chinese PC maker Lenovo, will share $3.25 million from his bonus with some 10,000 staff in China and 19 other countries. 'Most are hourly manufacturing workers,' Lenovo spokeswoman Angela Lee said. 'As you can imagine, an extra $300 in a manufacturing environment in China does make an impact, especially to employees supporting families.' In its annual review last year, Lenovo raised Yang's base pay to $1.2 million and awarded him a $4.2 million discretionary bonus and a $8.9 million long-term incentive award. Yang owns 7.12% of Lenovo's shares, equivalent to about $720 million in stock."
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Lenovo CEO Shares $3 Million Bonus With Workers

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  • Not the first time (Score:5, Insightful)

    by Pinhedd ( 1661735 ) on Monday September 02, 2013 @05:19PM (#44741439)

    I believe that he did this last year as well.

    Good on him, especially considering that Lenovo has been quite successful recently in a contracting PC market

    • by Dahamma ( 304068 )

      It's *definitely* better than nothing, but as the founder, CEO, and largest shareholder couldn't he just *pay* his factory employees better wages instead of turning it into a personal PR statement?

      • by Jeremi ( 14640 ) on Monday September 02, 2013 @06:33PM (#44741825) Homepage

        It's *definitely* better than nothing, but as the founder, CEO, and largest shareholder couldn't he just *pay* his factory employees better wages instead of turning it into a personal PR statement?

        He could, but then if business started to get tight, he'd probably have to lay people off and/or cut wages; neither of which is particularly pleasant for people who were counting on money that it turns out they won't get.

        By giving employees an unexpected bonus instead, he looks like a good guy while at the same time avoiding potential ill will in the future.

        • by Dahamma ( 304068 )

          Except if "business" truly started to get tight they'd have to lay people off in the future anyway - $3M would be peanuts in a significant downturn for a company Lenovo's size.

          Or better yet - give the employees their own bonuses. That way they know in advance they are guaranteed extra money if they do their job well instead of relying on the benevolence of their bosses. Like you said, it's his opportunity to look like a good guy. And from the limited info we have, he probably is a good guy. But he clear

          • by AmiMoJo ( 196126 ) *

            You misunderstand his intentions. He is trying to emulate the Japanese model where the CEO feels that the company is his family, and the workers feel that the company looks after them. If he is successful he recognizes that it is due in no small part to the rank and file employees, and treats them like, you know, he actually cares enough to share his wealth with them.

          • I do bonuses when the company can afford it for just that reason. Employees want a stable, guaranteed pay check. If they didn't, they'd be entrepreneurs. It would be cruel to give them a raise and have to take it be back six months later. Most would much rather have stable pay that won't be cut plus a bonus once a year than have their pay go up and down every month depending on company financials.

        • By giving employees an unexpected bonus instead, he looks like a good guy while at the same time avoiding potential ill will in the future.

          Only so long as the bonuses keep flowing. Once you've paid the Danegeld... stopping isn't so easy.

      • by dywolf ( 2673597 )

        ok. 300 dollars spread out over a year comes to.....a 14 cent raise at 40/wk.
        Basically unnoticable.

        but a lump sum 300, easily seen and tossed where the employee needs it most.

        and no its not about personal PR, it about employee morale. the company did well, he got a bonus, he shared it with the workers who made it happen. good managers acknowledge that they didn't do jack by themselves, its their team that made it happen.

        and its happened twice in a row. i'll bet those emplyees keep it up and it happens again

    • by Yvanhoe ( 564877 )
      These are peanuts for monkeys. It is less than 1% of the 500 millions of profit Lenovo did.

      I give more of my income to homeless, and I don't give a lot, neither do I benefit from their work. This kind of cheap PR operation makes me want to puke.
      • These are peanuts for monkeys. It is less than 1% of the 500 millions of profit Lenovo did.

        Next time you give some change to the poor, remind me to flame you because it's less than 1% of the hundreds of thousands your family makes (or whatever).

        I seem to recall a recent ill-concieved socio-economic political movement asking for laws to be passed to make this sort of thing compulsory. Kudos to Yang for taking the initiative here - maybe others will follow his lead and we'll end up with a Rockefeller/Carnegie philanthropy competition going on. You may think of it as "cheap" PR, but examples like th

  • Let't reward this! (Score:5, Interesting)

    by FrankHS ( 835148 ) on Monday September 02, 2013 @05:28PM (#44741495)

    Thanks for the info. I will make it a point to buy / recommend Leveno products. I want to reward this behavior.

    • But if you do this, you're doing exactly what this $3 Million PR Stunt wants you to do! Don't let the man ... ugh, I'm too tired to think this argument through...
    • by Yvanhoe ( 564877 ) on Monday September 02, 2013 @11:55PM (#44743315) Journal
      To put things in perspective :
      Lenovo 2012 profits : $472 millions
      Yang's share of that : $33 millions
      Lenovo's employees : 27 000
      Lenovo profit per employee : $17,481
      What Yang offers them : $300

      I am not sure I want to reward that.
      • To put things in perspective :
        Lenovo 2012 profits : $472 millions
        Yang's share of that : $33 millions
        Lenovo's employees : 27 000
        Lenovo profit per employee : $17,481
        Yang profit per employee : $1,222
        What Yang offers them : $300

        I added in what you left out.
        Were you purposely being disingenuous?

  • by assemblerex ( 1275164 ) on Monday September 02, 2013 @05:33PM (#44741539)
    The workers feel appreciated and will be diligent.

    You don't happen upon good employee morale and company stewardship.

    It has to be grown. Quality and waste will decrease. When employees feel zero empathy for the company or it's future, a fall is sure to follow.
    • Have you ever met a McDonald's employee with empathy for the company and it's future? Of course not. It's a shitty part-time job.

      And yet that didn't stop the company from making over $5.5 billion last year. But I'm sure they'll fail real soon now, right?

      • One reason for that is McDonalds doesn't give a shit about their shitty product. The company itself has no pride. How can you expect individual employees to care? Profit sharing plans won't help when no one at the company cares about the quality of the product they make.I don't see the existence of companies which we all would be better off without as a failure of capitalism, but as a failure of humanity as a species. Unfortunately greedy, unprincipled members of our species will probably always exist. It w

      • by dywolf ( 2673597 )

        and you're making his point for him and not even realizing it.

  • by Anonymous Coward

    $3,250,000 / 10,000 = $325 per employee.

    Keep that math in your brain for the next "Overpaid CEO" argument.

    • Most corporations appear would love to save $325 per employee.
    • by ATMAvatar ( 648864 ) on Monday September 02, 2013 @06:05PM (#44741687) Journal

      I'm not quite sure what your point is. If you gave away $325 to individuals, how many people would you be able to be able to reach? Keep in mind that the $3m is less than one fourth his compensation this year.

      That isn't to stray from the point that giving away personal benefits to his workers is something to encourage, no matter what the motivation was.

      • by Solandri ( 704621 ) on Monday September 02, 2013 @06:56PM (#44741969)
        His point is that despite all the doom and gloom stories about excess CEO pay, the amount of money the CEOs are making compared to the entire economy is peanuts. Here's a commonly cited paper" on CEO pay in the U.S [epi.org]. The average CEO here makes 273x more than the typical worker, with an average compensation of $14.1 million/yr. The horror!

        But if you read the fine print, you see that it only looked at the top 350 companies. If we were to cut these CEOs down to size and confiscated all the money they made last year and redistributed it to the 145 million workers in the U.S., each worker would end up getting ($14.1 million)*(350 CEOs)/(145 million workers) = $34 each. If you divide it by the number of workers in the Fortune 500 (24 million), it's $205 each.

        The authors of the paper came up with the methodology for tracking trends in CEO pay over the years. Unfortunately it's been hijacked and misreported to fit the narrative that CEOs in general are siphoning off substantial amounts of money our economy is generating, and if it were fixed everything would be much better. That simply isn't the case. While the top CEOs may make enough money to afford themselves a lavish lifestyle, in terms of the overall economic output of their companies it's peanuts.

        If you want a better, broader measure of income inequality, you should be looking at things like Gini coefficient [wikipedia.org]. But "Income inequality 50% worse in U.S. than other Western countries" isn't as great a headline as "CEOs make 273x more than their workers."
        • Re: (Score:3, Insightful)

          by Anonymous Coward

          That would be correct, if the CEO was the only person that was over paid in each company.

          The income inequality that you speak of comes from the top ~5% being over paid and there may be a another 10% that are paid a reasonable sum, so you take the top 1-5% and split it among the bottom 85% and it would be a lot more than $300 per person. I looked into this type thing in the past and it ends up being closer to $500/month per employee if you cut the top tier execs pay in half and redistribute.

    • Exactly. This kind of thing always bothers me. Even if you cut the CEOs salary in half, you aren't going to get much extra money in the hands of the employees. There's only one CEO, and thousands, or tens of thousands of employees. And extra $12.50 minus taxes on your paycheck (assuming paid every 2 weeks, 325/26) isn't even going to be noticed by the employees. I find the same thing about people complaining about how much senators or congress people are paid. The way I see it, the less they are paid, the m
      • by Twanfox ( 185252 ) on Monday September 02, 2013 @06:53PM (#44741943)

        I have a different take on this matter. What exactly does a CEO do that provides so much more value to a company than an engineering team or assembly line laboring away at designing products? Sure, a CEO has a place and can be very instrumental in the effectiveness of the company, but then so too can a brilliant engineer or a factory foreman that can design the next Big Thing or improve efficiency because they know their work that well? Where are the brilliant engineers making CEO pay? Or the factory foremen? And don't think for a second that a CEO is so unique as to be irreplaceable. When a CEO is replaced, shockingly a company keeps running unless he is so bad as to drive the company into the ground. Being unable to attract good talented engineers or having your assembly line strike because of bad treatment can cripple a company just as badly as a bad CEO.

        So, the lesson I'd like to give is that every level of a company, be it designers or sales or factory or CEO, has a place in a corporate team and no one entity is less crucial than the other. The only problem is that the CEO disproportionately earns that much more than everyone else. It is about time that the people that labor to make the products or to do the work, that serve as the face of the company moreso than the CEO does, share in the fruit of their efforts.

        • A good CEO can make a difference in a company. Getting a board of directors, shareholders, executives and employees all on the same productive page is not as easy as it looks. It's cat herding. And you can't just hire any dude with an MBA to do it. Demand outstrips supply. So they can get more money than the average person.

          Then there are great CEO's. The stars or their profession. These guys are the super-athletes of their profession. Super rare. One way to look at it is they are pivotal. They might

      • Re: (Score:3, Interesting)

        by godrik ( 1287354 )

        As someone that often comments on overpaid CEOs, I feel like I need to reply to this. There are many aspect to it and many different cases.

        First of all, his salary (what ever you call it it is a salary) is not $3 million. It is $1.2M+$4.2M+$8.2M. That's actually more than 13 million dollar a year. I won't even talk about stock, because arguably it is not salary. (But let's be honnest, at these positions abusing stock options is not really difficult. Also you have a pretty good picture of where to invest.) H

    • by allcoolnameswheretak ( 1102727 ) on Monday September 02, 2013 @06:50PM (#44741915)

      Implying that a 3,25 million bonus isn't all that much because it would 'only' mean an extra $325 if distributed among employees can really only be the opinion of entitled, rich assholes who never have had to struggle at the end of the month. 8 years ago during my student years an extra 30 bucks a month would have meant the world to me. In Europe. And we are talking about mostly Chinese families here.
      TEN THOUSAND OF THEM.

    • Re: (Score:2, Insightful)

      by David_Hart ( 1184661 )

      $3,250,000 / 10,000 = $325 per employee.

      Keep that math in your brain for the next "Overpaid CEO" argument.

      So, you're only argument is that at $325 per employee, the CEO is a bargain? That's a crap argument. Everyone knows that you negotiate for a car based on the the total cost, not the monthly payment. Most CEO's are well overpaid for the value that the bring to the table. What's worse is they get guaranteed money even if they are fired for failing. On top of that, if the is a public company, that's money being taken away from shareholder value.

      As for the $$$ per employee, I'm willing to bet that $325 or

  • Psychology (Score:3, Interesting)

    by zmooc ( 33175 ) <zmooc@zmooc.DEGASnet minus painter> on Monday September 02, 2013 @06:23PM (#44741781) Homepage

    This guy is the CEO. He could just as well have Lenovo give this bonus directly to its employees, which it will probably (have to) do anyway. Instead he's trying to make himself look good. Might be worth the trouble; the (apparently) kinder the CEO, the more loyal the employees. But this is not an act of charity; it's just a normal bonus with a well thought-out psychological plan behind it.

  • by Anonymous Coward on Monday September 02, 2013 @06:26PM (#44741795)

    He's giving part of his bonus to be distributed to his workers? That's the path to socialism!

  • by Anonymous Coward

    It's an act of generosity which he didn't have to do, for a company that puts out a laptop where Linux runs great. Lenovo was already probably going to get my next purchase based on how well Linux is running on this laptop (T61 purchased used FWIW), and this only makes it easier.

  • by Greyfox ( 87712 ) on Monday September 02, 2013 @09:54PM (#44742749) Homepage Journal
    Actually forget if it's Simpsons or Futurama but "It's the amount of money our scientists have calculated that poor people think is a lot of money!"
  • This guy just bought: better morale, free publicity, [some] defense against charges of being heartless/taking advantage of workers a la Foxconn, and probably some warm fuzzy feelings for himself as well. I don't think he'll lose any sleep because Slashdot readers looked at his salary and wondered why he didn't give up the whole thing. Yes, he could have just had the company issue the bonus without any mention of where it came from, or he could have given the bonus but not released a press release about it

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