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MORON at WORK story

MattTheSkywalker

Elite Mentor
Platinum
Hi everyone. I want to relay a funny work story.

Our business, among other things, manages a lot of litigation for insurance companies. When I say "a lot", I mean, several hundred million dollars per year, per client.

In order to do this, we have hired about two dozen lawyers and some support people. The "legal section" is divided into two groups: litigation preparation / investigation, and litigation resolution. Each is headed by a group leader.

The group leaders had been reporting to the Director of Operations, who is effectively a COO. Some stuff went down, and the COO was fired. He was not immediately replaced, so the responsibilities of running operations fell on the Office of the Chairman, which is populated by our CEO, CFO, General Counsel, and me.

One of the things that our litigatiion groups have to do is update our clients quarterly on the status of high profile negotiations or litigation. They do this via narrative reports, usually a page or two. With the loss of the Director of Operations, both groups fell behind on reporting to the client. When a client spends a third of a billion with you, this is pretty bad.

So I met with the group leaders and put together a plan to get caught up. The litigation prep guy got caught up. The resolution group lead, in spite of having an assistant, did not get caught up.

In the interim, we have hired a new COO, he starts very soon. I am trying to get the litigation resolution group leader squared away so he can make a decent impression with his new boss. So I put something in place where he would have to send the reports to the relationship manager (a single point of contact for the client) and then the relationship manager would send them to the clients. This way, when the new COO comes on board, the problem is being solved, rather than needing to be solved. Does it affect me? not even a little bit. I am just trying to get this taken care of.

So yesterday I get an email from the litigation resolution group lead, who wants to send the reports directly to the client. He actually wrote,

Why can't I send the reports directly to "client name?" That's why I used to do before I lost control and the process became overwhelming.

Amazing.

This guy, FYI, makes $110K per year plus bonus (approx 33% of salary) and stock options. Scares me sometimes.
 
Sweet.

Is tort reform going to impact your current buis. model?
 
110K for an executive?? man...

executives at my company all rake in at LEAST 300K plus 100K bonus plus a million a year in options.

Sr. Managers get 85-125K
Directors get around 100-150K
VPs 150-250K
 
Lestat said:
110K for an executive?? man...

executives at my company all rake in at LEAST 300K plus 100K bonus plus a million a year in options.

Sr. Managers get 85-125K
Directors get around 100-150K
VPs 150-250K


That was bugging me too.
 
Lestat said:
110K for an executive?? man...

executives at my company all rake in at LEAST 300K plus 100K bonus plus a million a year in options.

Sr. Managers get 85-125K
Directors get around 100-150K
VPs 150-250K

Thanks. Brian, that's helpful. You probably don't have a venture capital partner, do you?

When you have a VC investor, salaries are always artifically held down (don't forget, this is Jacksonville, too, cost of living is jack shit, $110K here is $250K or more in san diego).

I have more money for me because we put our company in a cheaper city. Think like an owner, sir, you may one day be one.


As to stock, that's where the real money is in a VC backed company. Your execs have to worry about the strike price of their options, and being "in the money" or "under water". You can get $1M a year in options, but if you exercise at $3 above the strike price, you might be pocketing well under $100K, depending on what it all trades for. And many companies can't exercise at all, their stock is worth less than their strike price; a lot of the accounting scandals you know about are related to share price manipulation so CEO types could exercise options. Not a problem in our world.

Ask someone with .com stock about being under water. In a private company, we price the options at about 10 cents a share, so there is no problem with exercising when there is a liquidity event (sale or IPO, or in our case, LBO then IPO/sale). You can manipulate the stock price all day long when you're private, because there is no market to value it. You can also issue more shares...just because.

And lastly, if we give too much to the employees, how are we going to keep it all for ourselves? LOL actually we are extremely generous, this bonehead probably has, depending on sale price, a chance to walk away with a few million dollars. Lucky guy.

We do appreciate, and I will share with our chairman, your concern about our comp models, but since our company is probably going to sell for > $1B and started with 2 guys in a garage, we like to think we know what we're doing. :) We are some arrogant fucks, yes, but we also changed an industry.

Anyway, I like shrimp gumbo.
 
:rolleyes:
 
MattTheSkywalker said:
Thanks. Brian, that's helpful. You probably don't have a venture capital partner, do you?

When you have a VC investor, salaries are always artifically held down (don't forget, this is Jacksonville, too, cost of living is jack shit, $110K here is $250K or more in san diego).

I have more money for me because we put our company in a cheaper city. Think like an owner, sir, you may one day be one.


As to stock, that's where the real money is in a VC backed company. Your execs have to worry about the strike price of their options, and being "in the money" or "under water". You can get $1M a year in options, but if you exercise at $3 above the strike price, you might be pocketing well under $100K, depending on what it all trades for. And many companies can't exercise at all, their stock is worth less than their strike price; a lot of the accounting scandals you know about are related to share price manipulation so CEO types could exercise options. Not a problem in our world.

Ask someone with .com stock about being under water. In a private company, we price the options at about 10 cents a share, so there is no problem with exercising when there is a liquidity event (sale or IPO, or in our case, LBO then IPO/sale). You can manipulate the stock price all day long when you're private, because there is no market to value it. You can also issue more shares...just because.

And lastly, if we give too much to the employees, how are we going to keep it all for ourselves? LOL actually we are extremely generous, this bonehead probably has, depending on sale price, a chance to walk away with a few million dollars. Lucky guy.

We do appreciate, and I will share with our chairman, your concern about our comp models, but since our company is probably going to sell for > $1B and started with 2 guys in a garage, we like to think we know what we're doing. :) We are some arrogant fucks, yes, but we also changed an industry.

Anyway, I like shrimp gumbo.
nice explanation, but 110K a year still seems low for an executive in any field in any area of the company. Right now I'm an intermediate programmer analyst, I will approach 100K when I make senior.
 
Lestat said:
nice explanation, but 110K a year still seems low for an executive in any field in any area of the company. Right now I'm an intermediate programmer analyst, I will approach 100K when I make senior.

That's because your knowledge of running a large company and dealing with assorted stakeholders could fit in a thimble....I suspect with room to spare, for your knowledge of corporate finance.

Good luck bor. :) I am going to give you some karma until those promotions kick in.



I also like jambalaya. But not if it is too spicy. Might as well eat Thai at that point.
 
MattTheSkywalker said:
That's because your knowledge of running a large company and dealing with assorted stakeholders could fit in a thimble....I suspect with room to spare, for your knowledge of corporate finance.

Good luck bor. :) I am going to give you some karma until those promotions kick in.



I also like jambalaya. But not if it is too spicy. Might as well eat Thai at that point.
I fairly well versed in corporate finance and accounting, considering that is where I have been working for nearly 7 years.

Then again, I work for a publicly traded fortune 500, so its a different paradigm. We are now jumping through hoops to meet SOX 404 compliance issues, and now wondering how to help our analysts value our stock once we start expensing stock options at the time of grant.
 
MattTheSkywalker said:
Why can't I send the reports directly to "client name?" That's why I used to do before I lost control and the process became overwhelming.

Amazing.

This guy, FYI, makes $110K per year plus bonus (approx 33% of salary) and stock options. Scares me sometimes.

Can I have his job? I promise I'll never ask any annoying questions. In fact I'll never ask, or do, anything at all. I'll just sit quietly in the corner and surf the web all day, while drawing salary. I will never embarrass you.
 
Mr. dB said:
Can I have his job? I promise I'll never ask any annoying questions. In fact I'll never ask, or do, anything at all. I'll just sit quietly in the corner and surf the web all day, while drawing salary. I will never embarrass you.

We had a guy who, through some political shakeouts, had something like this, but he left to join a fund that invested in reinsurance and does some other esoteric stuff. We are a loyal group, he never would have been fired. I don't know why he left.

I will never understand why, he lacks the education or the intelligence to do well there. But he left anyway.

Thankfully, with a new COO on board, I don't have to touch operations anymore. Should we continue to grow, I will remember your job request.
 
Cool, cool


Can someone spot me a $20






Great quote by the way. I just printed it out, and am going to add ti to all my stationary with some revision;)
.
 
CipherLock said:
You know the first seven paragraphs of this are of no actual use.


Unless you're trying to show everyone what a badass you are by telling them how important you are and spending an hour of your day typing that bullshit... sorry dude, you come off as pretty sorry in my book.
 
WODIN said:
Sweet.

Is tort reform going to impact your current buis. model?

I don't really know - it depends on the way it is implemented.

The areas that are being targeted - meical malpractice and personal injury law - will not harm us really at all.

It could help us, as lower costs of litigation will free up insurers to be able to invest more in us, and there will never be (via legislation) a meaningful reduction in the amount of litigation between corporations, which is where we spend the overwhelming majority of our litigation dollars.

In short, our clients will have more money. Always good. :)

What it might do, oddly, is unemploy a lot of lawyers, making it even cheaper for us to hire them.
 
there is no such thing as a stupid question, only stupid people.
 
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