Should business owners/shareholders equally carry the burden of our financial state?

Greebo

Greebo

Greebo

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Something I have been thinking about for a few weeks and thought I would start a discussion on here about it especially since there seems to be quite a few company owners on this forum following on from the "snow, can't get to work" thread.

I have come to the conclusion that some business owners/shareholders are not "cutting back" (if that is the right word for it) in the current economic climate but are expecting their employees to in order to keep their profits the same and keep their personal income the same or better.

A few examples from companies I have dealings with:

Company A: No payrises for employees this year and sob sorry letter at Christmas stating that
there was no Christmas party as the company couldn't afford it and that employees should count themselves lucky that due to the good planning of the company, nobody has lost their job and there is still as much overtime as anybody wants but this has come at a cost of cutting margins and investment in new equipment and the company is facing raising costs etc
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.

The truth is that the company has had the best year ever with turnover up 12% and profits up 18% and the owner has increased his pay by 28% and bought a Lamboughini Mercialago.:rolleyes:

Company B: A large multinational pharmaceutical company who at least gave their staff a 2.5% payrise this year but will not replace any permanent staff if they leave in order to save money. What happens is that the work is shared around the remaining staff so they are all expected to work harder. The truth is that it has being one of their best years (lots of diseases this year for which they do the drugs for) so shareholders have had some of their best returns. Yet again this seems to be at the cost of the employees who have limited options at the moment in as far as alternative jobs.

Company C: A retailer dealing in high value items who have indeed being hit by the economic climate this year and has seen both turnover drop by 10% and profit drop by 25% so they are indeed suffering and need to address the falling profit margin so a lot of the employees have had pay cuts which is fair enough you would think, however the owner increased his remuneration by 76%. :rolleyes:

I do appreciate that a lot of companies are finding life difficult and margins are dropping and that the number of companies going into liquidation is on the increase, however there appears to be a lot of company owners who are not prepared to cut their own income in these difficult times and are using the economy as an excuse to either make more money than they normally do or at least keep their income/profit the same. This always comes at the cost to the employee.

Am I been too harsh? Any comments from company/business owners on here would be gratefully appreciated.

Personally I feel that company owners should be cutting back as much as their employees are expected to.
 
companies need healthy profits to survive, many are keeping healthy profits by being prepared.

I don't see your point, other than a lack of knowledge thinking companies only need to break even.

That sob letter? it's true many companies survived by planning ahead and most Christmas parties are paid for and organised by the employees themselfs.
 
Yes, companies need to prepare and try and keep healthy profits. I agree. But in the examples I give, I can't see that is the case.

I'm not saying about companies only needing to break even. I mean companies holding onto their very healthy profit margin or even increasing it at the expense of the employees while the directors keep their same income or even increase it while using the economic downturn as an excuse.

As for the sob letter, a lot of companies pay for the Christmas party and that company always has. To cancel it due to the economic climate when turnover and profit is up just seems wrong and not good planning at all.
 
Greebo said:
I'm not saying about companies only needing to break even. I mean companies holding onto their healthy profit margin or even increasing it at the expense of the employees while the directors keep their same income or even increase it.

As for the sob letter, a lot of companies pay for the Christmas party and that company always has. To cancel it due to the economic climate when turnover and profit is up just seems wrong and not good planning at all.
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Companys need good healthy profits, it the way things are. especially ones on teh stock market.

they have planned ahead and are being rewarded, I see nothing wrong with that.
 
AcidHell2 said:
Companys need good healthy profits, it the way things are. especially ones on teh stock market.

they have planned ahead and are being rewarded, I see nothing wrong with that.
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How is that planning ahead? Please tell.

Cancelling the xmas party one month after yearend and record profits? All that smacks off is getting even more profit when really the least they could do is reward their staff how have worked hard all year and taken a pay freeze.

Even if the company had given a payrise that year, it still would have been record profits.

And any comment on the owners in the same period increasing their pay?
 
So let me get this right.

Business owner drops salaries of all employees and increases profit therefore he deserves a payrise due to his performance?

Easy. That's all the FTSE 100 companies need to do then. Slash their employees wages and increase theirs and everything is fine. :rolleyes:

And the party may not be a right but to use the recession in general when the actual business itself is booming is not right.
 
Greebo said:
So let me get this right.

Business owner drops salaries of all employees and increases profit therefore he deserves a payrise due to his performance?

Easy. That's all the FTSE 100 companies need to do then. Slash their employees wages and increase theirs and everything is fine. :rolleyes:

And the party may not be a right but to use the recession in general when the actual business itself is booming is not right.
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Dropping pay only makes sense if you're paying more than you need to based on the market rate, otherwise you risk losing staff and damaging your own competitiveness.

Far too many people have images of evil bosses who want to make the decisions, I've met far more that really don't want to have to do these things, but you can't risk the company for everyone just so you don't have to make a necessary decision surrounding a few.
 
Greebo said:
Easy. That's all the FTSE 100 companies need to do then. Slash their employees wages and increase theirs and everything is fine. :rolleyes:
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You can't do that as teh customers would get peed of when you can't offer the servuce, as well as staff turn over rates and everything else

Greebo said:
And the party may not be a right but to use the recession in general when the actual business itself is booming is not right.
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we are not clear of the problems and wont be for years, for years most companies got fat, due to loads of profits. They have now streamlined, to ensure they can withstand the market.
 
And the party may not be a right but to use the recession in general when the actual business itself is booming is not right.
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The reason is normally not the performance of the company, but the performance of other companies. An employer can only do what they can get away with - hence why in a recession they can take more from the employees, as there is less likelihood said employee will up and leave.

Conversely, when business is doing well, that's when you should be negotiating your pay rises because there will be other companys willing to pay you that much.
 
AcidHell2 said:
we are not clear of the problems and wont be for years, for years most companies got fat, due to loads of profits. They have now streamlined, to ensure they can withstand the market.
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I agree if business owners were doing that. However in the cases I gave the companies are still fat, still making record profits (except the last one) yet the owners/directors are substantially increasing their wages/divedends.

That is not planning for the future or streamlining. That is using the economy as an excuse to get more out of their companies.
 
Dolph said:
Far too many people have images of evil bosses who want to make the decisions, I've met far more that really don't want to have to do these things, but you can't risk the company for everyone just so you don't have to make a necessary decision surrounding a few.
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I have met good bosses too who don't like it as well. However I have yet to meet a boss who feels bad about cutting employees wages so they can give themselves a 28% or 76% payrise. To me, they are just abusing the situation we are in.

If your company is struggling then as well as your employees making cut backs, I think the owner should to. After all, he wants his company to continue in the future as well.
 
Greebo said:
Company B: A large multinational pharmaceutical company who at least gave their staff a 2.5% payrise this year but will not replace any permanent staff if they leave in order to save money. What happens is that the work is shared around the remaining staff so they are all expected to work harder. The truth is that it has being one of their best years (lots of diseases this year for which they do the drugs for) so shareholders have had some of their best returns. Yet again this seems to be at the cost of the employees who have limited options at the moment in as far as alternative jobs.
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Are you talking about .... by any chance?
 
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Remember the Golden Rule? He who has the gold makes the rules.

This is why I prefer to do business with worker-owned partnerships like John Lewis where possible. Sadly John Lewis/Waitrose is the only one I can think of :( I'd like to see many more.
 
I think you'd be hard pushed to show that a majority of company directors/owners are cutting staff numbers/wages while also increasing their own salaries/dividends.
 
vonhelmet said:
I think you'd be hard pushed to show that a majority of company directors/owners are cutting staff numbers/wages while also increasing their own salaries/dividends.
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I'm not saying that in the case in most companies but I am aware personally of 3 companies doing exactly this.

Acidhell2 seems to think this is just good business :rolleyes:
 
Greebo said:
Company C: A retailer dealing in high value items who have indeed being hit by the economic climate this year and has seen both turnover drop by 10% and profit drop by 25% so they are indeed suffering and need to address the falling profit margin so a lot of the employees have had pay cuts which is fair enough you would think, however the owner increased his remuneration by 76%.
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Profit down 25% yet the owner increases his return by 76%? What kind of idiot would run a company like that!

I think I work for Company B :(
 
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