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By Jack Ganssle
Tis the season to be jolly, and what could be jollier than a nice, fat Christmas bonus?
According to the New York Times (http://nytimes.com/2004/11/29/business/29wall.html) the financial services sector is salivating over anticipated year-end paycheck inflators.
Investment banking associates right out of college earn some $85k and can expect a $115k bonus. That takes a bit of the pain out of putting some granny's nest egg into junk bonds.
The head of Merrill Lynch made a paltry $500k in salary but, uh, "earned" a $13.5m year-end bonus. High-performing commodities traders might see a sweet little $15m added to the pay stub this month, just enough to cover those Gucci necessities of life.
The drug industry is another nice place to be, at least if you're highly compensated. Troubled Vioxx-supplier Merck plans (http://nytimes.com/2004/11/30/business/30merck.html) to offer executives up to three times their already generous salary and bonus if the company is acquired.
How will game maker Electronic Arts take care of its employees? Historically they're pretty generous. CFO Warren Jenson got a $450k bonus last year. plus a $4m loan (which was forgiven), plus $1.6m to cover the tax consequences of said forgiveness, with 4290k in other compensation and 120,000 options of EA stock. (http://sec.gov/Archives/edgar/data/712515/000119312504096256/dpre14a.htm and http://sec.gov/Archives/edgar/data/712515/000095013404016270/f02072e10vq.htm)
It's heart-warming to find a company so devoted to the workers.
Shockingly, some EA employees aren't quite so thrilled with job conditions there (http://news.com.com/For+developers%2C+its+not+all+fun+and+games/2100-1022_3-5457274.html). These dissidents complain that the company demands 80 to 110 hour workweeks for months on end for programmers and other developers, with neither OT pay nor comp time.
What's the beef? Someone has to create corporate value, including EA's $3.2b in assets, of which $2.5b are in cash and short-term investments. This year's $577m profit exceeded all employee costs, including overhead. Good job, workers!
But don't expect a bonus.
Software Development magazine reports (http://www.sdmagazine.com/documents/s=9411/sdm0411a/sdm0411a.html?temp=LhjLxPekii) that US programmers averaged a $4000 bonus last year, which is a bit under 5% of total income. Managers, of course, did considerably better.
This year employees are thankful for a job. Perks and bonuses are nice - really nice - additions to the compensation package, but just a steady paycheck keeps the financial wolves at bay.
Not everyone is so lucky. This week's TechNews from the ACM contains (http://www.acm.org/technews/articles/2004-6/1124w.html#item2) two contiguous and strangely-related stories. In the first Congress ups the H-1B visa cap by another 20,000 engineers. In other words, in this time of not-particularly-full employment, our representatives have helpfully made it harder to find work.
I wonder if Congress will vote themselves a bonus for such far-sighted efforts?
The second claims 55,000 tech jobs were lost in Silicon Valley in the third quarter of this year, 60% more than the previous three months. The title, "Silicon Valley's No Place to Find a Job," sums up the contents and angst.
If you're working, what do you expect the bonus/profit sharing/stock option situation to be this year?