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Big Business Pledged Gentler Capitalism. Itís Not Happening in a Pandemic.

Big Business Pledged Gentler Capitalism. Itís Not Happening in a Pandemic.

Old Apr 13, 20, 9:07 am
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Big Business Pledged Gentler Capitalism. Itís Not Happening in a Pandemic.

While this article mentions other companies, its focus is Marriott and its response to the pandemic:

https://www.nytimes.com/2020/04/13/b...ction=Business
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Old Apr 13, 20, 9:16 am
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Originally Posted by Sabai View Post
While this article mentions other companies, its focus is Marriott and its response to the pandemic:

https://www.nytimes.com/2020/04/13/b...ction=Business
It's disgusting to see how the CEO is getting a 7.7% pay raise and bonuses during this pandemic...

It's time for Arne and the Marriott Board of Directors to go if they're not going to focus on the Marriott way of doing good by their employees and the communities that they serve..
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Old Apr 13, 20, 10:08 am
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While I have tried to stay out of the general ongoing mudslinging at Marriott Management, this article is pretty damning. I am very disappointed in Marriott's Corporate actions and lack of Good Corporate Citizenship. While continuing to pay everyone indefinitely (or more accurately enabling franchisees to do so) is not realistic, true cutbacks of executive compensation (not just salary which is a small part of typical executive pay) can and should be done. Certainly raises in any form (salary, equity [stock], cash bonuses) should be off the table for all corporate executives this year.

I hate to say it but after many, many years of giving most of my hotel business to Marriott, I may have to reconsider that going forward due to their poor behavior during the pandemic. Maybe Marriott will have its own version of Charles Dickens A Christmas Carol and realize the error of the ways and repent before it is too late.

--Jon
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Old Apr 13, 20, 10:53 am
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Glad he got called out for his full comp package, not just the small slice of it that's salary that he's foregoing

BTW too bad they didn't put some of that $5B in buybacks instead to, I don't know, functioning IT or anything...
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Old Apr 13, 20, 12:27 pm
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Originally Posted by UA-NYC View Post
Glad he got called out for his full comp package, not just the small slice of it that's salary that he's foregoing
I agree. Too often execs are given credit for giving up a salary when it's a small percentage of their income. There are times when giving up 10% of your total comp is a great gesture. It's harder to justify when you just put 2/3 of your employees on unemployment income. I would have actually liked to see Sorenson do the reverse, he could live on his $1.3M for a year. Better yet, I wish he would have kept both, then personally donated the bonus money to a cause that would help his former employees. I guess that could still happen...
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Old Apr 13, 20, 1:24 pm
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Originally Posted by Intl359Widget View Post
It's disgusting to see how the CEO is getting a 7.7% pay raise and bonuses during this pandemic...
I must be misreading something here.

The following statement is from page 34 of the actual filing to the Securities and Exchange Commission of the United States by Marriott International, Incorporated:
“At its meeting in February 2020, following a comprehensive review of market data, the Committee determined to increase the base salaries by 7.7% for Mr. Sorenson and by approximately 3% for the other NEOs. The increase for Mr. Sorenson was the first increase to his base salary since 2017. However, in March 2020, in light of the rapidly evolving coronavirus (COVID-19) situation, the Committee discussed with management the appropriateness of adjusting senior executive compensation as part of the Company’s numerous initiatives to mitigate the negative financial and operational impacts of COVID-19. Mr. Sorenson recommended that he receive no base salary (except as necessary for benefit deductions) for the remainder of the year and the other NEOs requested, and Mr. Sorenson recommended, that they receive 50% of their base salary for the remainder of the year, in each case beginning in April 2020. The Committee and Board accepted these recommendations.”
The base salary of Arne Sorenson is $1,300,000.00 per year, which he is foregoing for the rest of the year; so he is not going to receive that increase of 7.7 percent during the pandemic.

Nothing has been said about the remainder of his $13,435,887.00 in total compensation, which is found on page 44 of the aforementioned document...

...and here is another little tidbit, which is found on page 54:
“The 2019 annual total compensation of the median compensated employee was $38,878; Mr. Sorenson’s 2019 annual total compensation was $13,435,887, and the ratio of these amounts was 1-to-346.”
While I do not defend Arne Sorenson and believe that he should voluntarily give up or donate more of his compensation in addition to his base salary, we need to get the facts straight. Did the article in The New York Times fail to do this; or am I misreading it?
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Old Apr 13, 20, 2:40 pm
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Originally Posted by Canarsie View Post
The base salary of Arne Sorenson is $1,300,000.00 per year, which he is foregoing for the rest of the year; so he is not going to receive that increase of 7.7 percent during the pandemic.

Nothing has been said about the remainder of his $13,435,887.00 in total compensation, which is found on page 44 of the aforementioned document...
I think you got it right. The 7.7% raise, while being $0 this year, is still a raise though. So he starts out at $1.4M next year, unless I misunderstand it.

If nothing has been said about the other 90% of his total comp, wouldn't you assume he would still get it? The article does reference the stock based incentive and cash incentive. What do you think is inconsistent?

That said, the source you used is a much more credible source than a newspaper article.
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Old Apr 13, 20, 2:44 pm
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Originally Posted by JBord View Post
If nothing has been said about the other 90% of his total comp, wouldn't you assume he would still get it?
That is exactly what I meant ó meaning that giving up $1.3 million dollars of his total compensation has been trumpeted in the media; but that is less than ten percent of his total compensation package.
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Old Apr 13, 20, 2:50 pm
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Originally Posted by Canarsie View Post
That is exactly what I meant — meaning that giving up $1.3 million dollars of his total compensation has been trumpeted in the media; but that is less than ten percent of his total compensation package.
I do appreciate the insight you brought on this topic.

I took a look through the SEC filings earlier this morning and thought to myself that this Corporate Raider is setting himself up for a nice and lofty 2021 paycheck to my disgust...
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Old Apr 13, 20, 3:23 pm
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Canarsie Thank you for the clarification and researching it in the original source. As Intl359Widget already mentioned, even though he is not taking salary this year, guaranteeing himself a raise for next year is still reprehensible. The executives should have the resources to weather a few lean years while the recovery occurs after the pandemic ends. Rank and file staff, especially lower paid staff do not. Looking at programs to help them recover would be a much better way to go.

--Jon
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Last edited by Jon Maiman; Apr 13, 20 at 3:41 pm
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Old Apr 13, 20, 6:08 pm
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Originally Posted by JBord View Post
I think you got it right. The 7.7% raise, while being $0 this year, is still a raise though. So he starts out at $1.4M next year, unless I misunderstand it.

If nothing has been said about the other 90% of his total comp, wouldn't you assume he would still get it? The article does reference the stock based incentive and cash incentive. What do you think is inconsistent?
If Marriott is doing so well next year that he gets $1.4M next year - then, great for all of us.

Between now and then - Marriott could go bankrupt - he might be granted a bunch of stock that is worth a fraction of what it is today - he may not reach a bunch of cash incentives due to company performance, etc -

Speculating on compensation when it is unknown what will happen with the airline/hotel industry is pure speculation.
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Old Apr 13, 20, 6:50 pm
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I guarantee the front line workers will not see that kind of increase in 2021, regardless of market conditions. His wage will go up “by default”. Adopting this now means there won’t be uncomfortable conversations later. Look I don’t begrudge the man personally, he is able to negotiate for himself with the board. The people who I take issue with primarily are the board members.
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Old Apr 14, 20, 12:28 am
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Originally Posted by Jon Maiman View Post
guaranteeing himself a raise for next year is still reprehensible.
How is a raise next year guaranteed when it was given then rescinded this year? Do you have access to some guarantee mechanism we aren't seeing - please share.

A 7.7% raise in 2021 after, reportedly, no increase since 2017 is a 1.87% GACR. Inflation in the US has risen 8.03% over the last 4 years.

You find a raise below the rate of inflation to be reprehensible?
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Old Apr 14, 20, 3:49 am
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Originally Posted by CPRich View Post
How is a raise next year guaranteed when it was given then rescinded this year? Do you have access to some guarantee mechanism we aren't seeing - please share.

A 7.7% raise in 2021 after, reportedly, no increase since 2017 is a 1.87% GACR. Inflation in the US has risen 8.03% over the last 4 years.

You find a raise below the rate of inflation to be reprehensible?
Given the context, I don't think Marriott's employees, franchises or hotel guests are going to look favourably on this. Quite apart from society as a whole, if you believe in that kind of thing. For me it's another example of where Marriott's values and corporate culture just appear to be reminiscent of the world of 1980s American capitalism - time for that part of history to be buried.
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Old Apr 14, 20, 7:17 am
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Originally Posted by CPRich View Post
How is a raise next year guaranteed when it was given then rescinded this year? Do you have access to some guarantee mechanism we aren't seeing - please share.

A 7.7% raise in 2021 after, reportedly, no increase since 2017 is a 1.87% GACR. Inflation in the US has risen 8.03% over the last 4 years.

You find a raise below the rate of inflation to be reprehensible?
Personally, I don't find any of it reprehensible, even though it doesn't feel right. I could argue that highly paid CEO's shouldn't ever get base pay raises, because many other executives don't. They're compensated fairly, and don't really work for base pay but for options, grants, and bonuses. Even in a director level position after the last recession, I was told I wouldn't get raises any more (it did restart about 5 years later). And in sales, we generally don't get base pay raises, even though I have a base I can live on.

I see the Marriott situation more as a missed opportunity to be a good leader, rather than a commentary on capitalism. Sometimes employees need a symbolic act to feel like their leadership cares about them and isn't just making more money while they suffer. 100k won't do much if spent on employees, but that also means it shouldn't matter much to Arne. The optics of giving up that raise for a year might be meaningful though.
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