I stumbled across this article today. It's crazy what some of these corporations will do to please their shareholders. AT&T is obviously very concerned about protecting their dividend. It's always about the bottom line, never about the workers. Anyways here is the article... https://techstaffer.blog/2020/08/06/att-what-companies-will-do-to-save-their-dividend/
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Executives and upper management receive much of their compensation in stock. If T cuts the divy, the stock will drop like a rock and then their compensation is greatly diminished.
The probably haven't mentioned much about the Bonus because the main objective is to keep that dividend going. Its not about happy employees but happy stock holders and the board of directors.
And it's crazy what corporations will do for their workers - pay, benefits, pension. The workers don't care about the company. They just take, no matter how the company is doing.
jyz
"Not performing to expectations will cause investors to withdraw their money leaving less cash to operate the business"
I don't think you know have the faintest idea of how the stock market works.
The investors have paid for the stock. If everyone went to sell their stock tomorrow, the price would plummet (assuming zero buyers), but AT&T would not lose a penny in cash.
Look, I accept that shareholders need to be paid, and that layoffs will happen. HOWEVER there's a slimy way to get rid of employees, and there's a dignified way. Nobody wants layoffs, but what really ticks people off is the slimy techniques that are increasingly common. And what's worse is when these same companies copy each other "to remain competitive."
Examples: OP's article about Exxon changing the performance review process so many people become "poor performers" & thus eligible for firing – that's slimy. Another big 3-letter company allegedly hired young people only to fire them months later– a move to bring down the average age in a layof – is also slimy. Rebadging? Vague CEO-speak? Cutting severance packages before layoffs? These boards are full of examples.
@jyz: I think it may be you who doesn't quite get business.
A business cannot survive by cutting it's way to success. A business cannot survive by overpaying a dividend they are unable to sustain. A business cannot survive without growth in products/services. A business cannot survive by losing significant employee base with institutional knowledge.
Businesses grow by acquiring and expanding their customer base. That's where revenue comes from, and that's what should help set the value for stock prices. And that's why investors normally buy shares: will this company grow? Not will this company do what's best for me. That's short strategy, and it is poison.
As to your nonsense about investor dollars sustaining a business, it's total hogwash. Particularly when the bulk of the stock is either awarded below rate to executives or when the company buys it back to artificially maintain value. Your entire argument is that a business exists to satisfy shareholders. That idea came in the 80's and has been perverted to become a mantra, even though it is exactly opposite how a business remains successful.
As far as executive pay, you actually said that execs are compensated based on success. Are you high? Since when has that been the case? Randy drove ATT to historic debt, yet he is living well. Stink is overseeing the biggest loss of video customers ever but he'll get a sweet bonus and fat raise. And it's the same across all businesses. Executives are absolutely NOT paid for their success – their paid because they are executives completely regardless of company or individual performance.
You really don't understand business. But you do understand the exceedingly greedy form or American capitalism that has completely twisted how businesses run, how executives are paid, and how employees are treated.
Hmmm ... that makes me think you might be some high-level T-hole
Do you not understand the basics of business? A Company needs cash flow to operate. Investors invest money for a future return on investment. In order to secure a money investment a Company commits to a certain percentage of return on money invested hence dividend. Yes high level executives get compensated for meeting or exceeding the expectations. Workers or labor is the tool to tech the expectation. Higher wages and benefits the less profit margin the less money to return to the investors. Not performing to expectations will cause investors to withdraw their money leaving less cash to operate the business. Less money equals downsizing and layoffs. If you’re a bottom line worker you will never get paid your worth and never get rich. You’re expendable, easily replaced. Long time employees have higher salaries and are targeted to be replaced by younger people that will be paid less money which increases the profit margin. For companies it’s all about the return on investment to the shareholders period. Sad but true. If you want more start your own business.
I am not an equities expert by any means. All I hear is dividend, dividend. And I get it's viewed as a widows and oprhan's stock, but investors just love that reliable dividend.
But doesn't the piss poor performance of the stock itself matter? I don't get it.
No matter what the business is, a worker has to create enough income to pay for him/herself and income for the business. It can be as part of a group, like a janitor that cleans an office, but the office generates enough income to offset the salaries and costs of the office, plus something for the business. A business will want to have the work done efficiently so as to create more income for the business.
As far as I know, there is no other criteria. It doesn't matter whether it is good times or bad. Insofar as copper is concerned, particularly copper telephone, I don't think that it creates any income any more, hence, that is the area targeted for layoffs. We can talk about bad acquisitions and so forth, but the elephant in the room is copper.
Why is this a big surprise, executives have stock options as part of their compensation. Do you really think they care of the mom and pop individual stock holders, hell no. Institutional stockholders might have a sliver of influence, Elloitt is the rare exception. Paying dividends is writing themselves a check every quarter. Layoff employees only represents number changes on a spreadsheet to make the other numbers work, nothing else.