Profit Share
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The payment of Profit Share is no longer triggered by a profit margin of 7.5% for the airline, which is just as well as the profit margin for the airline in ’06 was 7.1%. The new formula pays some Profit Share as long as the airline profit margin is positive. Following the new formula, the margin of 7.1% has been multiplied by 0.75 producing a figure of 5.3% which is applied to the total airline profit. In other words, 5.3% of the airline’s profit for 2006 is to be shared amongst its employees a total pot of HK$179m.
What we need in future years is a profit margin of 13.3% so that 10% of the airline’s profit gets shared out.
What we need in future years is a profit margin of 13.3% so that 10% of the airline’s profit gets shared out.
Join Date: Oct 2003
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Time taken to maufacture your high-quality(?) Nike t-shirt in Indonesia = 6 minutes
Hourly wage of the factory worker who made it = US$0.29 per hr
Cost to manufacture = US$0.029
Price you paid in the Nike Shop = US$40
(Source UNITE - Union of Needletrades, Industrial and Textile Employees and Werner International)
But still 12-13 days bonus.........
Hourly wage of the factory worker who made it = US$0.29 per hr
Cost to manufacture = US$0.029
Price you paid in the Nike Shop = US$40
(Source UNITE - Union of Needletrades, Industrial and Textile Employees and Werner International)
But still 12-13 days bonus.........
Join Date: Oct 2003
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Good idea, that would save on the cleaning bills.....
Or shop at Patagonia since they don't exploit their workers, and the shirts are cheaper/longer lasting yaddy, yaddy, yaddy.
Or shop at Patagonia since they don't exploit their workers, and the shirts are cheaper/longer lasting yaddy, yaddy, yaddy.
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so no doubt N1 pays his Indonesian Maid 30 times the required wage of 3200HK$$$ a month to asuage his burning desire to make all things fair and equal...........................ooops , but, sorry things are not fair and equal are they now ??? some people make huge salaries and some don't. the professional pilots at Cathay , along with the rest of the staff are, entitled to be rewarded for what they do, as is your Indonesian Needleworker albeit at 29Cents an hour ....................so good luck to them and I hope they introduce a profit share scheme but in the meantime......................
what has the fact that they are paid 29 Cents an hour got to do with anything ???
what has the fact that they are paid 29 Cents an hour got to do with anything ???
Join Date: Oct 2006
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cpdude,
to keep the maths simple, lets assume exactly $4billion profit this year. That equated to 7.1% someone reported and profit amount shared of $179m.
If we assume that turnover was the same, staff the same and that in fact the only change was that we magically removed $4billion worth of costs, then profit would have been $8billion. Profit margin would now be 14.2% (double 7.1%). 14.2% times 0.75 gives 10.65% of the profit to be shared, which equals $852million.
I am not sure how many staff we have but lets assume around 16,000. That means $96million was distributed equally(assuming everyone's salary was $12K or over) leaving $83million equalling 6.4 days.
So assuming the same system of $6K per employee, if profit was $8billion, our share would be $852million...take away $96million leaves $756million. Since $83million equals 6.4 days, $756m equals 58.3days.
So, if profit doubled on same turnover/staff, then profit share would be 58.3days and $6,000.
clear as mud?
to keep the maths simple, lets assume exactly $4billion profit this year. That equated to 7.1% someone reported and profit amount shared of $179m.
If we assume that turnover was the same, staff the same and that in fact the only change was that we magically removed $4billion worth of costs, then profit would have been $8billion. Profit margin would now be 14.2% (double 7.1%). 14.2% times 0.75 gives 10.65% of the profit to be shared, which equals $852million.
I am not sure how many staff we have but lets assume around 16,000. That means $96million was distributed equally(assuming everyone's salary was $12K or over) leaving $83million equalling 6.4 days.
So assuming the same system of $6K per employee, if profit was $8billion, our share would be $852million...take away $96million leaves $756million. Since $83million equals 6.4 days, $756m equals 58.3days.
So, if profit doubled on same turnover/staff, then profit share would be 58.3days and $6,000.
clear as mud?
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Actually, this profit share has been locked in for a 3 year period so it will not change in that time regardless of profit figure.
Additionally, this formula pays more money for any profit margin, vs old formula, until you get to about 14% or so. Even then, the difference is not that great.
I know we all want to see the cloud in this profit share silver lining...well there aint any!
Additionally, this formula pays more money for any profit margin, vs old formula, until you get to about 14% or so. Even then, the difference is not that great.
I know we all want to see the cloud in this profit share silver lining...well there aint any!
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Ok, boring f#$k that I am, I finally found 5minutes to sit down and work out the difference between new and old profit share.
Until profit is over 11.5% of turnover, new scheme is better. Old scheme(25% of profit in excess of 7.5% of turnover) is better until 22% of turnover. At 16.67% the difference is greatest at around 10% profit share...ie if we got 60days on new scheme we would have got 66days on old scheme.
So to summarise, new scheme is better up t0 11.5% and then again if profit is excess of 22%. Old scheme is better between 11.5% - 22%.
Out of interest, since 1994, profit margin has ranged from -2.1% to 14.5%. Only in 3 years, 1996 2000 2002 has profit margin exceeded 10%.
So whilst the current profit share seems parsimonious, it is in excess of what we could historically expect to receive from this employer!
Until profit is over 11.5% of turnover, new scheme is better. Old scheme(25% of profit in excess of 7.5% of turnover) is better until 22% of turnover. At 16.67% the difference is greatest at around 10% profit share...ie if we got 60days on new scheme we would have got 66days on old scheme.
So to summarise, new scheme is better up t0 11.5% and then again if profit is excess of 22%. Old scheme is better between 11.5% - 22%.
Out of interest, since 1994, profit margin has ranged from -2.1% to 14.5%. Only in 3 years, 1996 2000 2002 has profit margin exceeded 10%.
So whilst the current profit share seems parsimonious, it is in excess of what we could historically expect to receive from this employer!
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Well done with he calculation NC!
With regards to the possible huge manager bonus for the year, I think we need to take things into prospective. Management at CX has a lower based salary when compare to other airlines around the world. Most of our management makes the bulk of their salary on bonus which is based on performance of the company. When you think about it, the company (CX) can do the alternative, which is to follow the US and European carriers, and pay their exectives millions of US dollar a year salary (and possibly another huge bonus as well at year end, if their company turn a profit). That method will not be good for us pilots (or any other employee for that matter) neither, it will only further reduce our profit share as this will increase the cost for CX. I rackon, the current management salary scheme is fair for all parties concern. It might not seem fair that the management makes millions in bonus but if you look up their total salary package (look it up in the annual report), it is only comparable (sometimes even lower) than their counter parts in other airlines. If you are still not happy, go kiss some bottom and join the management, I am sure they will have a position for you somewhere.
Anyway, what's the plan for everyone on their 6.4days + HKD6000 salary? Pay for your new favoriate toy? Buy a diamond for your wife (right!)?
Bus
With regards to the possible huge manager bonus for the year, I think we need to take things into prospective. Management at CX has a lower based salary when compare to other airlines around the world. Most of our management makes the bulk of their salary on bonus which is based on performance of the company. When you think about it, the company (CX) can do the alternative, which is to follow the US and European carriers, and pay their exectives millions of US dollar a year salary (and possibly another huge bonus as well at year end, if their company turn a profit). That method will not be good for us pilots (or any other employee for that matter) neither, it will only further reduce our profit share as this will increase the cost for CX. I rackon, the current management salary scheme is fair for all parties concern. It might not seem fair that the management makes millions in bonus but if you look up their total salary package (look it up in the annual report), it is only comparable (sometimes even lower) than their counter parts in other airlines. If you are still not happy, go kiss some bottom and join the management, I am sure they will have a position for you somewhere.
Anyway, what's the plan for everyone on their 6.4days + HKD6000 salary? Pay for your new favoriate toy? Buy a diamond for your wife (right!)?
Bus
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numero Crunchero,
since you asked, I don't have a maid, full or part time, I know where the cleaning gear is in my apartment thankyou.
I personally think that since a lot of the maids in HK are degree qualified they would be better off at home helping their own country to develop.
Oh, but the best job's at home are making t-shirts for Nike, because the Indonesian government welcomes US 'trade' with open arms, 'cos that makes George Bush happy and he'd defend them if ever they had a war eh? But the welcomed person is not Mr Phillip Knight, chairman of the board at Nike, he's never been to Indonesia!
For your overworked calculator:
29 cent's/hour for an Indonesian worker in Nike factory.
$2952.09/hour for President and CEO Mark Parker. (Assuming he's a union man working 40hr/week that's $5,904,170/year)
Nike turnover 2006 = $14,954,900,000
The Final Word - Minimum wage for a local maid in HKG as you so precisely stated is HK$3,200/month(US$407). Since they work 6 days a week from about 6am to 8pm, that's about $1.20/hr.
Next time you see a maid clean some gweilo's fetid jock's, or change the nappy of some pampered priss, be proud their 'lord and master' is paying him/her 4X more than Nike.
Well done!
since you asked, I don't have a maid, full or part time, I know where the cleaning gear is in my apartment thankyou.
I personally think that since a lot of the maids in HK are degree qualified they would be better off at home helping their own country to develop.
Oh, but the best job's at home are making t-shirts for Nike, because the Indonesian government welcomes US 'trade' with open arms, 'cos that makes George Bush happy and he'd defend them if ever they had a war eh? But the welcomed person is not Mr Phillip Knight, chairman of the board at Nike, he's never been to Indonesia!
For your overworked calculator:
29 cent's/hour for an Indonesian worker in Nike factory.
$2952.09/hour for President and CEO Mark Parker. (Assuming he's a union man working 40hr/week that's $5,904,170/year)
Nike turnover 2006 = $14,954,900,000
The Final Word - Minimum wage for a local maid in HKG as you so precisely stated is HK$3,200/month(US$407). Since they work 6 days a week from about 6am to 8pm, that's about $1.20/hr.
Next time you see a maid clean some gweilo's fetid jock's, or change the nappy of some pampered priss, be proud their 'lord and master' is paying him/her 4X more than Nike.
Well done!
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N1, not guilty of asking you questions but I do like your maths!
I know my maid is clever...she makes no mistakes doing my amendments! She has been debriefing me on the subtle and esoteric differences between PM and PNF. But she still can't explain to me why PF is not called PNM (pilot not monitoring).
In the meantime N1 I am sure there is a Greenies forum or something for you. I dont log onto PPRUNE to read about how unfortunate people are in this part of the world.
I know my maid is clever...she makes no mistakes doing my amendments! She has been debriefing me on the subtle and esoteric differences between PM and PNF. But she still can't explain to me why PF is not called PNM (pilot not monitoring).
In the meantime N1 I am sure there is a Greenies forum or something for you. I dont log onto PPRUNE to read about how unfortunate people are in this part of the world.
