I had run into my old friend, Sam, the other day. It was nice to see him after almost 14 years and to learn that he was doing well, I mean sort of, until recently. During the casual bantering, I sensed that he wanted to unload something on me and I slowly prodded him.
"Say Sam, so has the recent financial turmoil affected you in any way?"
Keeping a straight face, he lamented that his department had outright overdone itself for its 2008 budget. Before I forget, Sam works in the financial sector and in middle management. He puffed up his chest and went on proudly to say that despite the crises going around, his department had achieved almost an astounding 200% above the budget given to them.
Before I could congratulate him and drill him the quantum in terms of months of his seemingly huge bonus, just as quickly, his chest deflated and lowered his eyes and in near whisper, said that his firm on the whole, did not fare too well at all.
Worried, I then asked him if his job was in jeopardy or his firm was going to have huge write downs?
Well, he said that his job was secure. There are no obscene write downs, only that compared year on year, his firm had a marginal 10% increase in profits due to some hits taken. I assured him that in current scenarios, keeping in the black is an achievement in itself reminding him the age old adage,"if there are no losses, then it is a win already".
He lamented that at last year closing, as a result of the fantastic budget that they had turned in, his superior had told the department not to worry too much about the crisis and that they had not been affected and that they should carry on their planned activities or purchases. In fact his superior had mentioned that he had already put up the bonus figures and it was not turned down and they would in fact, should be expecting their package to be doubled in 2009. Wow, Sam thought then, quickly counting his eggs. The next day, he called his broker and arranged to sign the Sales Agreement for the property that he was eyeing on because of the so called announcement from his boss.
Alas, it was not be, as bad news started coming out in January & February. By middle February, Sam learnt that certain units had in fact taken hits and pulled down the aggregate. Therefore, to "help" out, he was informed by his superior that his 2009 package would be cut by 55%. Ahem, that's a little drastic by any standards, don't you think?. In fact, at the end, his 2009 package will be even lesser than his 2008 package by 30%.
Then his nightmares began as he now would have severe problems paying for his new house. Also, he had not sold off his current house which was losing value rapidly in the declining market.
I tried comforting him and said that at least he still had his job. I reminded him that a lot of people are jobless and he should be at least thankful for that. On top of that, he still had quite a nice bonus compared to others who had none.
He then rebutted me and said that I didn't understand. Sam then went on to reveal that in actuality his management had already given a promise in 2004 that whichever section does well, their bonuses will not be affected by other sections that do not do well. Also, the bonus was to be paid in December rather than the traditional March. In 2004, that promise was made known verbally to his team members from their superior as a result of a hit taken by one of the units. Bank wide, every one's package were slashed even when it had nothing to do with them. Then, a lot of talented persons left the firm because of that incident and the promise was given soon after that, to stem the flow of talented people leaving.
In the 2004 incident, the provision was for a 100% and Sam had countered his management that if, somehow they managed to recover a percentage of it, then could their package be re-adjusted in accordance to the recovery or a percentage of it. He felt that if all of them had sacrificed greatly, to the tune of 40%, to help out the other section/bank and if they somehow managed to recover something, the management could show its sincerity by doing something for them in appreciation. According to him, his management never did come back to him on that point. Eventually, they managed to recover about 58% of the provision but they, the staff, were never thanked by having their package adjusted that year.
It seems that management are a forgetful bunch as they had totally forgotten their promise and doing things like before.
In fact Sam felt outraged, as, to begin with, they were give a ridiculously high budget to achieve for 2008 and they over-achieved it by almost 3 times. Even as a third party, I couldn't but help to feel a little outraged myself.
His new package was worse off then the previous year and he was totally relying on it for his new house.
What really made Sam livid was that the promise was totally forgotten and the way the decision was handed down. The least he felt the management should have done was to at least apologise first as that alone would soothe a lot of ruffled feathers.
Trying to change the subject, I asked him how was business so far in 2009?
He replied that he was now "on" the market. Once there is an opportunity, he would jump ship as, once bitten, twice why and he has been had for thrice.
Also he said, being made fools a few times, he said that his team, himself included, are not as hardworking as previously as they had already heard some units were not doing well and may have taken some hits. They now only plan to satisfy the fantastically high budget and no more. So there goes their 2010 package as well and maybe all future years packages as well. I am sure it will not be smooth sailing all the way and bumps are a given. So what does Sam and his colleagues really have to look out for?
We soon parted ways and promising to keep in touch and telephone numbers being exchanged, but I doubt it. Maybe I will bump into him another time and re-experience meeting an old acquaintance, and feel warm and fuzzy inside.
I felt sorry for Sam and his predicament. I also feel even sorrier for his company as a result of their own doing, they will certainly lose many valuable and talented people, and very soon too.
