Megan’s Math

$37,500 annual salary earns a $25,000 bonus

Megan’s numbers do add up.
Based on Hubert’s statement that a 50% drop in bonuses for the top 80 executives would result in a 20% drop in their income, then it follows that bonuses represent two-thirds of their salary.

For example, if one person is being paid a salary of $60,000, and we gave them a bonus of $40,000, their total income would be $100,000.
Cut the bonus in half, and that person’s income has lost $20,000, or 20% of their total income.

Again.
If one person makes $37,500 in annual salary, and they are given a bonus of $25,000, their total income for the year would be $62, 500.
10% of $62,500 is $6,250.
20% of $62,500 is $12,500, representing lost income.
To cut this person’s bonus in half would be to lose $12,500.

Taking it further.
If 80 people made an average of $62,500 each in total compensation for the year, then the CBC would be paying out $5 million.
Of that, $2 million would be in bonuses.
Slashing the bonuses in half, the CBC would save $1 million a year, or $2 million over the next two years.

Slashing the bonuses in half, plus eliminating an expected 1.5 per cent increase in executive pay next year, will save the corporation about $2 million over the next two years.
~ CBC spokesman Marco Dube.

5 comments:

  1. Allan
    Posted March 21, 2009 at 5:12 pm | # | Reply to this masterpiece

    The 1.5% info came out after your initial calculation, but hardly a factor of any consequence. Doubt that anyone in the Guild was jumping for joy over their new raise so long as it was not -1.5%.
    One day I’d love to hear the reasoning behind separating “bonus” from “salary”.
    I understand that such games are a commonly accepted, but we tend to not see that it’s still fundamentally a deceptive, dishonest practice, even if everyone does it.
    Like the CEO who told Congress “if you don’t like the retention bonuses, I can fix that. There are other labels we can use. I have dozens of phrases standing by back at the office. People will fall for practically anything we say. What do working stiffs know about high finance, and what can they do about it anyway?”
    I believe this is a complete and accurate quote.

  2. Megan
    Posted March 21, 2009 at 3:17 pm | # | Reply to this masterpiece

    I posted my calculations on my own blog and asked my readers to check my math. One of them pointed out that I forgot to include the salary freeze. Using the 20% figure, the bonus is closer to 37.6%, not 40%.

    I’m not happy about that number, either.

  3. Enik Sleastak
    Posted March 20, 2009 at 7:12 am | # | Reply to this masterpiece

    As Anonymous said yesterday at 1:19–

    “The Sun did an ATI request that revealed that senior management got $964,860 in bonuses for the 12 of them. that breaks out to $80,405 each, if you split it evenly.

    “So going by this math, the average salary for these guys is $104,526 with a take home of $184,931 with this bonus.

    “This year it will be reduced to $147,945.”

  4. Megan
    Posted March 20, 2009 at 6:17 am | # | Reply to this masterpiece

    This makes me unhappy. I don’t want to be right about this.

  5. Anonymous
    Posted March 20, 2009 at 3:20 am | # | Reply to this masterpiece

    CMG should organize bus tours of CBC exec homes.

    http://www.nytimes.com/2009/03/20/nyregion/20siege.html?_r=1&hp


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