Attitudes Toward Compensation

By Author: allan
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In the summer of 1998 the German magazine (http://www.mythomassabo.net/)Stern ran an article comparing the pay of a Daimler employee and that of a Chrysler employee. The article showed pictures of the houses of employees and talked about their vacations, hobbies, and work schedules. It also compared the pay of two supervisors, both before and after tax.2The German employees knew that they were among the highest-paid workers in the world. There was some fear that the merger would have a negative impact on German pay. By showing that the two supervisors in the story had comparable pay packages, the article helped reduce or eliminate that concern. It was interesting to note, however, that the German and American supervisors had very different priorities for spending their money. The German employee spent much of his money on his house, garden, and furnishings. The American employee also had a nice house but spent most of his disposable income on short vacations and eating out.The difference in pay at the employee and supervisor levels might not have been that great; however, this was not true at the expatriate level. Daimler saw ...
... an expatriate assignment as a regular and required step on the ladder to the top. Expatriate packages therefore were small by American standards. However, on international flights Daimler executives went first class. At Chrysler only a few top executives were allowed to go first class, but compensation for foreign assignments was lavish by German standards. As the case at the beginning of this chapter pointed out, expatriate compensation became a big issue in the merger process. Ultimately both sides gave a little. The attitude toward expatriate pay speaks volumes about attitudes toward international business. At Daimler international experience was considered a prequisite for success, whereas at Chrysler it was considered something special that merited special compensation.The difference in compensation, however, was most pronounced at the executive level, particularly for the CEO. At the time of the merger Eaton received about $11 million a year, including stock options. Schrempp, by contrast, received about $2 million.In fact, the top 10 people at Daimler-Benz made $11.3 million together, about the same as Eaton made by himself. In addition, under German law individual executive pay does not have to be disclosed. Publication of the aggregate pay of the top earners is sufficient. Under American law, however, individual compensation must be disclosed. Rumors in Germany were flying that Schrempp's main goal for the merger was to receive an American-style salary under German disclosure laws. When Miss Emily Grierson died, our whole town went to her funeral: the men through a sort of respectful affection for a fallen monument, the women mostly out of curiosity to see the inside of her house, which no one save an old man-servant--a combined gardener and cook--had seen in at least ten years. It was a big, squarish frame house that had once been white, decorated with cupolas and spires and scrolled balconies in the heavily lightsome style of the seventies, set on what had once been our most select street. But garages and cotton gins had encroached and obliterated even the august names of that neighborhood; only Miss Emily's house was left, lifting its stubborn and coquettish decay above the cotton wagons and the gasoline pumps-an eyesore among eyesores. And now Miss Emily had gone to join the representatives of those august names where they lay in the cedar-bemused cemetery among the ranked and anonymous graves of Union and Confederate soldiers who fell at the battle of Jefferson. Alive, Miss Emily had been a tradition, a duty, and a care; a sort of hereditary obligation upon the town, dating from that day in 1894 when Colonel Sartoris, the mayor--he who fathered the edict that no Negro woman should appear on the streets without an apron-remitted her taxes, the dispensation dating from the death of her father on into perpetuity. Not that Miss Emily would have accepted charity. Colonel Sartoris invented an involved tale to the effect that Miss Emily's father had loaned money to the town, which the town, as a matter of business, preferred this way of repaying. Only a man of Colonel Sartoris' generation and thought could have invented it, and only a woman could have believed it.（http://www.bestthomasabo.com/）