Cost of Doing Business...

Brent asked me a question this morning that sent me off on a tangent in my head.

First off, this entire blog is my memory of things (and a few google searches) so it could very well be wrong. But it's how I view things. How I view things. Not Brent. The opinions expressed are solely my own and not necessarily shared by all members of this household.

Got it? Good.

Brent shot me a message this morning asking who the artist was Intel hired for the party in New Mexico.

Aaron Neville. This was in the mid 90s when Aaron Neville was still charting.

And Intel hired him not for one night, one party, but for multiple nights.

And the party wasn't for bigwigs and muckety mucks. It was for everyone who worked at that site, Brent was a factory floor guy back then. That's why they did it over multiple nights, to make sure everyone on every shift had a chance to celebrate.

A year or so ago Intel announced they wouldn't be offering free coffee in the cafeteria anymore as a cost saving measure. Now, to be fair, they did reinstate it when they realized how pissed all of their employees that they were forcing back into the office for, reasons, were about this decision. But still.

The line from Aaron Neville on multiple nights in New Mexico to NO COFFEE! has been an interesting one.

Cost cutting. Expenses have escalated! It's too hard to make a profit anymore. Competition. Bad business decisions. All of those are given as reasons. And I'm sure a lot of them are very valid.

But...

The year of the Aaron Neville concert the CEO of Intel was making around $300K plus bonuses and stock that put him between $1 million and $2 million total compensation if everything went well. Not bad at all. The CEO now, during the NO COFFEE! years makes $1 million in base, plus $2 million in bonuses and $66 million in stock. So $2 million if it's all great to $69 million and fuck you very much.

I'm not the only person to talk about the huge disparity between CEO salaries and the compensation of workers, but it's not just salary. It's the little perks like company parties and year end fruit baskets and tickets to events around town and yes, free coffee. And the biggest perk of all at Intel was the sabbatical program, which they cut back the time on significantly. You know, cost of doing business.

We were able to take Brent's last sabbatical at the full rate because he'd already earned it and had it planned when they announced they were cutting it. But that was that. I wonder now if they had kept it if Brent might have stayed on a little longer knowing he could take that time. Probably not, it would still be awfully far out, but maybe?

And that's the thing. If you treat your employees well they stay. If you show them that they aren't worth much they leave.

Tech companies used to really understand this. They had amazing perks. Free food, onsite day care, dry cleaners and laundry service, car service. Intel had its own air fleet so they could shuffle employees from site to site to get things done face to face as needed. There was a stretch where Brent worked 3-4 days a week in California. (It was not my favorite stretch, but it was much easier with the planes flying in and out of Hillsboro airport)

Sure, tech paid well. But it also compensated above that. And they would brag about it. It was a race to see who had the best package overall for their employees.

But it wasn't sustainable. You have to make a profit. You have to beat year over year.

And you for sure have to attract the best CEOs so their pay has to keep climbing even as you cut everything else. And let your other employees' compensation stagnate.

Brent worked his way from the factory floor to the position he's in now. He had a goal for a while to be a VP. One terrible soul sucking boss and a clear eyed look at the hours VPs work and he decided to step off that track and instead follow whatever shiney thing looked like an interesting challenge. As long as the challenge came with a decent boss. But he's been with the company for a long time. He's done a lot of interesting things. He's witnessed ups and downs and retirements of legends. And don't let the door hit you leavings as well. In the old days we would have said he bled Intel blue.

But they bled him out.

And he didn't get 66 million in stock for it either.

I don't have a lesson to wrap this up with. I wish I did. But late stage capitalism will chew you up and spit you out isn't a lesson so much as a reality. CEOs make too much money compared to the people who work for them isn't a lesson, or even new information so much as it is a...what? I guess just another story in a long line of stories. Another data point.

There needs to be a rebalancing in our systems. Too much money has been concentrated in too few hands. Every billionaire is a failed tax policy, and lets not even get into what a failure a trillionaire is. All of the things I've said before. But it doesn't mean they aren't true.

Midterms are coming.
Check your registration.
Have a plan to vote.
Hold your representatives to actually doing their jobs.

Enjoy a cup of coffee.