Why Huge Packages & Bonus for CEO's in USA and Next Actions to Govt

I think its once in life time or once in 100 years or so.. that we are facing this Credit crunch WW. Millions of people are losing / will be losing thier jobs.. Its all because of the greediness ( best case : Sub prime business) of the people in developed ( majority) and also we can see in the developing nations.. People created artificial demand, hyped / hijacked the prices from real estate to crude, food items and salaries etc.. everything in one nut shell.

Because of that people, companies are now facing severe problems in all fronts. Here I am looking at the current salary/package and also bonus for the CEO’s in USA. As per one report in 2008 the Executives / CEO’s /CxO’s got US $ 18 Billion dollars. Apart from that there are N number of CEO’s taking huge packages and still laying of employees..? What moral responsibility the CEO’S have ?
I feel ….

1. The US Govt .should quickly look at it put a CAP on all CEO’s salaries or total compensation per year to very realistic.. It could be perhaps 5-8 lakh dollars maximum.. that’s about 0.5 to 0.8 mill US $’s.

2. Also the Govt. should put self-moratorium on the bonus and dividend to share holders, employees and Employers for about 2-3 years till the economy recovers.

3. No CxO’s should be allowed to use personal JETs for business purpose even if these facilities are provided to the Companies.

4. CEO’s package should have a certain percent of component related to employee satisfaction. Probably to start with 20 % of their package related to EMP. SAT.

5. If the company fails to deliver profits the CEO, Board, Executive management should a package cut immediately when they announce the Qtr results.

6. Govt. should not allow a single company to become NUMERO UNO in many fields for example software, hardware, mfg, Services etc. This will reduces the greediness & exploitation in the companies to certain extent.


Like these many of the actions to be taken to get right the industry in the right TRACK and also avoid the mass layoff’s / sufferings of the employees in these difficult times..

I am keen to help, assist in what ever way possible to save someone’s job.

Sincerely,
Balaji …

It's Time for Income Tax / Govt change thier rules..

I started thinking why does the Govt requires the supporting / proof documents for Income T ax especially for salaried employees.. Some of their thinking and logics and decisions are very OLD school of think tank..

Some of the Selective items I would like to discuss and leave the options open are..

1. Conveyance allowance
2. HRA
3. Gratuity duration
4. LTA support bills
5. Medical support bills.

1. Conveyance allowance : this amount is fixed to 800.00 irrespective of the fluctuations in the markets, cost of living, International Crude rates / India's basket rate for Crude, Inflation, local Petrol and Diesel rates. This is very unfair. Its burden on the employees ..where they are paying the INCOME TAX when their issues are not taken care / considered . Does this give fair value to the citizen or salaried employee's hard earned money ?

2. Why does the Govt also need supporting document ie the rent receipt.? If the employee is working .. he is living right..? Since Govt fixed this as around 40 % of basic..how many cases it is still relevant..? Keeping rents, cost of living and many more factors..

3. About the Gratuity duration: As of now its 5 years of continuous Service in the company where he is working. Now in the IT/software industry where employees are changing the company frequently and are paying / contributing to high income tax collections kitty and also Govt itself provided the Income Tax exemption ( STPI registered companies) to IT Companies..recognizing need to grow this industry IT SHOULD AMEND THE CURRENT Laws to 2 years of Service rather than 5 years. Employees are losing their money at least 3-4 % of their CTC and this goes to a dead account where you don't know where these funds are utilized ? Why it is not given to employee like PF amount. Some of the reasons I can also add is .. When Companies lay off employees..govt does not provide any support to these employees. look at other countries like USA where you have SOCIAL SECURITY is available.

If this is the condition why should Employees pay INCOME TAX to Govt ? So I think Govt should scrap this rule and allow employees to with draw their Gratuity like PF when they are not working irrespective of no of years they have worked in that company.

If the Govt thinks we should provide the supporting documents and also pay income tax... then Why not Govt send their income and expense info to all the TAX Payers? The people should know how their money is spent in detail. Its Time to THINK RADICAL and also put the govt in accountable shape and form.

New / Additional metrics for Future Valuations

Some of the new metrics I thought of.. or might come in the future in the corporate world ..I propose these metrics to value companies and also help in understanding the Company future trends. It would also differentiate companies from others ..set standards or bench marks for valuing a company in the near future..

1. Social responsibility Index: What is the contribution of the company to Society. For example percentage of revenue / profit every year it allocates to society development / charitable trusts / foundations etc.

2. Employee Satisfaction Percentage:

3.Corporate Governance Recognition: How the companies is respected by the industry in terms of its corporate governance. International awards, bench marks, transparency etc..

4. Corporate Earning Guidance Rate : A company able to provide the Earnings guidance and also able to maintain in terms of number of quarters / years etc..

5. Business Diversification (For example IT company getting into Mfg / Real estate etc..)
6. Vendors Confidence Index

7. Percentage of Repeat business from Clients

8. Scalability and Offerings Capabilities rate.

9. Employee Attrition Rate

Watch this space ...

From Balaji..

Next steps in the right direction..!!

The following are my thoughts on Companies Vs Employees..
1. Companies should cut down their revenue targets as most of the countries GDP is not going to grow positively.. or will be in negative growth.
2. Companies should not acquire other companies even though valuations are cheap or lowest levels. When the companies acquire / merge with .. final loosers are always Employees. If they can guarantee that they will not layoff employees then only it should be allowed.
3. All Govts should protect employees not only companies.
4. All should take cut in salaries. All board members, CXO's.. must take 50-60 % cut, VP/country heads etc.. should take 50 % cuts. All bottom level also should take cuts varying from 0 to 10 or 15 % cut.
5. No Performance compensation for anybody in the companies..
6. All companies should cut thier billing rates, products rates, license rates to become affordable to all people, companies, vendors, govt, colleges, SME's etc.
7. Govt should ban acquisitions for 2-3 years.
8. Govts should ban Lay off's for the next 2-3 years.
9. All Govts should put Salary cap to top level executives govt, pvt, ltd all listed companies etc.. all most .. should not leave even single companies.
10. All companies goal should be to Survive for next 2-3 years not to make profit.
11. Employees / People are most valuable in any time.
12. All luxuries / facilities to all the people in the companies should be taken away.
13. Reduce the work hours so that more people can work rather less people working for more hours.
14.Default period should be extended to 6 to 9 months than the current 3 months or 90 days period.
15. Management should be pro active to reduce their salaries every month if the conditions are not improving.
16. Provide credit to companies at zero percentage interest.
17. Ensure to bring down the Profit margins to less than 10 % for any company.
18. Allow employees to be part of the goal setting of the companies. Active participation and sharing the ideas will improve the commitment towards the companies.
19.Agian put moratorium on layoffs for 2-3 years.
20. Bring down the INCOME TAX levels on the individuals, companies from current levels at least by 30 to 40 %. Increase the people purchase powers
21. Put Restrictions on Individuals buying multiple home properties.
22. Put Restrictions on Individuals having multiple 2 wheelers / 4 wheelers.
23. Introduce car pooling as mandatory for all the 4 WHEELER owners in the companies.
24. Investigate all the real estate companies and verify their books.
25. bring down the land valuation rate, stamp rate and registration rate.
26. Introduce law which mandates all the CITIZENS to work for COUNTRY SIX / TWELVE – (6/12 Months).
27. Remove the STPI, SEZ facilities to BIGGER companies. Any IT Company whose Turn over is more than $ US 500 million should be removed from the IT exemption. Allow small companies to set up and grow in bigger no.s.
28. Govt to provide / allocate 20 % of work to small to medium companies.
29. Any mis management at top level people should be barred from taking any positions for at least 5 years in any form of employment.
30 IT employees also should form Union to protect themselves and safe guard from exploitation of companies.
31. Remove the gratuity period from 5 years to 2 years or even to ONE year.
32. Any lay off only allowed if the company under loss for 2 to years consecutively. Labour commissioners should be involved and authorize the lays off. They should provide equal opportunity to Employee and Employer also..

Many more thoughts will be added sooner..

Bejawada Gopal Raju / Reddy Tittle

While discussing with dammala..I proposed this title "Bejawada Gopal Raju / Reddy" suitable to Balaiah Babai / Bala Krishna.. Caption : "Nija Jeevitham lo kuda Kaboye Mukya Mantri /Nayakudu ". Meaning !! Future CM in real life soon..!! A power full political story where he land up being a Political Party leader and will become CM to AP state. I would like to Register this Tittle so that It will be my first Idea and also proper Owner of this thought.

What say dammala..?

Balaji..