Qantas staff low on corporate spirit
Join Date: Oct 2004
Location: Dununda
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Sunfish...Mangement Style
Can I work for you Sunfish?.Your management style is the way Qantas used to be run before Dixon turned up.It was a happy place and STILL made a profit.Unfortunately it was bled dry by successive federal governments.The board was full of people who were politicians mates.They knew little about running an airline and didn't meddle much.The board we have now...well they still don't know much but......
Last edited by surfside6; 23rd Feb 2005 at 07:30.
Coral, there is nothing wrong with bonuses, the problem is HOW you achieve them. If I go into another business as CEO you can bet that I will want options.
The way options SHOULD work is this: You determine the company's share price - say today its $1.00. You grant the executive options exercisable at $2.00 three years from now.
What that means is that the executive is expected to work her guts out to double the value of the company in three years.
Assuming she succeeds, and the price rises to $2.01 the options are said to be "in the money". If she exercises them buying the options and then selling the shares, she makes 1 cent per share.
If the share price goes to stratospheric, she wins accordingly. There is however the matter of taxation which I haven't gone into.
Trouble comes when executives "Tune" things to maximise shareprice when they can exercise the options and then immediately sell the shares and vamos! One stuffed company, very angry investors and a very rich CEO.
To put it another way. If I am expected to make $500 million for shareholders, I want a little bit to stick to my paws, and my staff's paws as well.
The way options SHOULD work is this: You determine the company's share price - say today its $1.00. You grant the executive options exercisable at $2.00 three years from now.
What that means is that the executive is expected to work her guts out to double the value of the company in three years.
Assuming she succeeds, and the price rises to $2.01 the options are said to be "in the money". If she exercises them buying the options and then selling the shares, she makes 1 cent per share.
If the share price goes to stratospheric, she wins accordingly. There is however the matter of taxation which I haven't gone into.
Trouble comes when executives "Tune" things to maximise shareprice when they can exercise the options and then immediately sell the shares and vamos! One stuffed company, very angry investors and a very rich CEO.
To put it another way. If I am expected to make $500 million for shareholders, I want a little bit to stick to my paws, and my staff's paws as well.
Join Date: Feb 2004
Location: Australia
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What is the average term of a CEO these days ??
Would I be right in guessing that it is rarely longer than 5 or 6 years ??
If so, what incentive do they have to look ahead and plan for the future ?? What incentive do they have to make the tough decisions ?
How much of QF's record profits are actually sustainable ?? As I read it most of the record bottom line comes from cost cutting - selling the furiture to pay the rent if you will - How much longer than this keep up before theres nothing left to cut(/sell) ?
I think GD will be long gone when theres nothing else to slash.
Would I be right in guessing that it is rarely longer than 5 or 6 years ??
If so, what incentive do they have to look ahead and plan for the future ?? What incentive do they have to make the tough decisions ?
How much of QF's record profits are actually sustainable ?? As I read it most of the record bottom line comes from cost cutting - selling the furiture to pay the rent if you will - How much longer than this keep up before theres nothing left to cut(/sell) ?
I think GD will be long gone when theres nothing else to slash.
