Exec compensation linked to club performance

[Teja]

I'm convinced that the only way this moronic board will make better decisions is if the entire executive staff the club currently employs has their compensation linked to the performance of the team on the pitch. There can be a pretty formulaic way to set it up - reduce the base pay considerably (say, by 50%). Top four gives them a 20-30% bonus and so on until finishing with the league title gives them a 200% bonus. (2x of current pay).

They can pat themselves on the back all they want for securing yet another tractor sponsorship but all of that is means to an end. And in football, the end is pretty clear - it's getting results on the pitch and winning titles. Failing that, all the social media likes, the international sponsorships etc will go away as quickly as they came.

I think this works both in the short / long term. You want to succeed in the short term because it affects your immediate comp. The management also has pretty long tenures at United, so unlike a manager / the players who keep changing every few years, execs are forced to think about the long term as well because their comp 5 years down the line will take a hit if they do stupid shit now.

Thoughts?

 

[tomaldinho1]

I'd imagine this is already the case, probably "discretionary" rather than that formulaic but end of year bonuses will be definitely calculated off the back of any success (or lack thereof).

If there's one thing you can trust the Glazer's to do, it's to keep as much money in their own pockets as is possible.

 

[Teja]

I'd imagine this is already the case, probably "discretionary" rather than that formulaic but end of year bonuses will be definitely calculated off the back of any success (or lack thereof).

If there's one thing you can trust the Glazer's to do, it's to keep as much money in their own pockets as is possible.

Any way to know for sure? I think they would've set it up so it's tied to the financial performance of the club (new sponsorships, revenues etc.) than on the field succcess.

 

[Bastian]

The Glazers operate the club as a cash cow for their personal profit, that's all it is. Woodward was instrumental in getting through the leveraged buyout (otherwise they could have never afforded to buy the club) and so he's part of that mafia.

The only thing that can force them to do anything is when the fans start raging and it affects optics in a major way (like the postponed Liverpool match) or when they target commercial sponsors.

The demands have to be pretty concise though - I think it's not realistic to demand them out (and it would take quite a bit of escalation in terms of protests to do so) but a reasonable demand, that would be backed up by the majority of journalists who are currently shaking their head at how horribly the club is run, would be to hand over all footballing operations to established footballing people. And continue to run the club that way until they leave.

 

[Tom Cato]

I'm convinced that the only way this moronic board will make better decisions is if the entire executive staff the club currently employs has their compensation linked to the performance of the team on the pitch. There can be a pretty formulaic way to set it up - reduce the base pay considerably (say, by 50%). Top four gives them a 20-30% bonus and so on until finishing with the league title gives them a 200% bonus. (2x of current pay).

They can pat themselves on the back all they want for securing yet another tractor sponsorship but all of that is means to an end. And in football, the end is pretty clear - it's getting results on the pitch and winning titles. Failing that, all the social media likes, the international sponsorships etc will go away as quickly as they came.

I think this works both in the short / long term. You want to succeed in the short term because it affects your immediate comp. The management also has pretty long tenures at United, so unlike a manager / the players who keep changing every few years, execs are forced to think about the long term as well because their comp 5 years down the line will take a hit if they do stupid shit now.

Thoughts?

Performance bonuses probably already exists.

With regards to lowering wages, if yout put them below a certain threshold, they will simply work somewhere where they are paid more.

 

[tomaldinho1]

Any way to know for sure? I think they would've set it up so it's tied to the financial performance of the club (new sponsorships, revenues etc.) than on the field succcess.

I don't think I have ever seen it leaked for any of our board to be honest - I guess the counter argument to linking the team performance to Woodward is his job isn't really linked to the drab football we see on the pitch, he signs off on players transfers (and we've just had an incredibly good window) but he's in a completely different side of the business and, by all accounts, commercially he's kept us competitive through a run of barren trophy years.

I did a quick google and saw a lot of low tier sources claiming he was on £4m in 2019 which means he's about level with Lingard on earnings...

 

[Teja]

I don't think I have ever seen it leaked for any of our board to be honest - I guess the counter argument to linking the team performance to Woodward is his job isn't really linked to the drab football we see on the pitch, he signs off on players transfers (and we've just had an incredibly good window) but he's in a completely different side of the business and, by all accounts, commercially he's kept us competitive through a run of barren trophy years.

I did a quick google and saw a lot of low tier sources claiming he was on £4m in 2019 which means he's about level with Lingard on earnings...

Yup .. I'm not complaining about how much they make (although just paying Fergie, Charlton a combined 7M p/y to be a "director" is a bit questionable).

Regardless of expertise, ultimately, the one person accountable for everything is Woodward. He has the power to change anything he wants (Implement DOFs, Sack coaches, sign sponsorships etc.), so the buck stops with him.

No leaks on how his comp is structured vs other CEOs in the league, but I think we can glean some info from looking at financial reports on years we did well and ones where we didn't do so well. That'll be my homework for today.

 

[clarkydaz]

pretty sure this board look after themselves just fine. supposedly the players take a cut if no CL qualification

 

[eire-red]

Yup .. I'm not complaining about how much they make (although just paying Fergie, Charlton a combined 7M p/y to be a "director" is a bit questionable).

Regardless of expertise, ultimately, the one person accountable for everything is Woodward. He has the power to change anything he wants (Implement DOFs, Sack coaches, sign sponsorships etc.), so the buck stops with him.

No leaks on how his comp is structured vs other CEOs in the league, but I think we can glean some info from looking at financial reports on years we did well and ones where we didn't do so well. That'll be my homework for today.

As you say, best bet is to check out the year end financial statements. Most publicly listed companies have to be pretty transparent on exec renumeration, or risk governance issues and the wrath of the shareholders.

 

[RedDevil@84]

I'd imagine this is already the case, probably "discretionary" rather than that formulaic but end of year bonuses will be definitely calculated off the back of any success (or lack thereof).

If there's one thing you can trust the Glazer's to do, it's to keep as much money in their own pockets as is possible.

But success does not necessarily mean footballing success, does it?

 

[Abraxas]

This seems a pretty redundant argument given the executives themselves are not going to be quick to heavily reduce their base wage, and so the only ones that are able to implement it are the owners. The problem being, the owners and executives are really cut from the exact same cloth.

Pie in the sky stuff really. I'm not sure it's a good idea anyway. Even if we were going to do away with all of them and reappoint completely on merit, what quality of candidates are going to be attracted to a compensation package that's 50% of the going rate for a top club and the rest stacked on top? The reality is you have to pay top whack and bonuses on top.

 

[Dr. Dwayne]

Typically large organizations will determine bonuses based on a combination of individual and enterprise performance, sometimes even line of business if you're big enough to have different strategic business units with multiple LOBs..

 

[steffyr2]

The Glazers operate the club as a cash cow for their personal profit, that's all it is. Woodward was instrumental in getting through the leveraged buyout (otherwise they could have never afforded to buy the club) and so he's part of that mafia.

The only thing that can force them to do anything is when the fans start raging and it affects optics in a major way (like the postponed Liverpool match) or when they target commercial sponsors.

The demands have to be pretty concise though - I think it's not realistic to demand them out (and it would take quite a bit of escalation in terms of protests to do so) but a reasonable demand, that would be backed up by the majority of journalists who are currently shaking their head at how horribly the club is run, would be to hand over all footballing operations to established footballing people. And continue to run the club that way until they leave.

"Cash cow" sounds like you mean excellent investment, but can't bring yourself to say anything complimentary.

What is an established footballing person? Does Ole fit that description? I'm sure when the match going fans turn against Ole, he'll be replaced. The Glazers did what the fans wanted -- hired Ole. Well, the fans are apparently bad at making personnel decisions for the club. Aren't you concerned about that?

 

[spiriticon]

They should do this with the players too. No CL football? Pay cut.

 

[Bastian]

"Cash cow" sounds like you mean excellent investment, but can't bring yourself to say anything complimentary.

What is an established footballing person? Does Ole fit that description? I'm sure when the match going fans turn against Ole, he'll be replaced. The Glazers did what the fans wanted -- hired Ole. Well, the fans are apparently bad at making personnel decisions for the club. Aren't you concerned about that?

I'm not sure what's unclear about what I said. By established footballing person, I mean the Glazers, Judge, Woodward, Arnold and their cohorts should not be deciding managerial appointments or other footballing matters. That's the only way this club will professionalise. They have paid lip service to structural changes and installed John Murtough as Football Director and Darren Fletcher as Technical Director. The latter role seems a bit obscure and to revolve more about not alienating sought personnel. But the former role can be anything from an advisory role for PR purposes or closer to an actual DoF.

My post was not a dig at Ole.

 

[Tarrou]

most execs have at least a 50% performance bonus, usually more

but it will be linked to financial performance, not footballing - and that's how it will always stay under the Glazers I reckon

 

[devlinadl]

Pretty sure this already happens, but the metric is turnover or profitability. You know, the stuff the owners really care about.

 

[SuperiorXI]

Turkey's voting for Christmas.

 

[::sonny::]

Agree 1000%

 

[Bebestation]

Performance bonuses didn't really work for Martial.

 

[elmo]

They should do this with the players too. No CL football? Pay cut.

Pretty sure the players already have this clause in their contracts.

 

[Trequarista10]

Tbh if the execs have performance bonuses already, I expect its more likely to be based on financial performance rather than success on the field. The two only partially linked.

 

[wolvored]

They should do this with the players too. No CL football? Pay cut.

They do. I read they have a 25% cut if no Ch lge the season after.

 

[JebelSherif]

Don't have any fiscal bonus linked to 'top-4' that will just keep things going as they are. Trophies only.

 

[steffyr2]

I'm not sure what's unclear about what I said. By established footballing person, I mean the Glazers, Judge, Woodward, Arnold and their cohorts should not be deciding managerial appointments or other footballing matters. That's the only way this club will professionalise. They have paid lip service to structural changes and installed John Murtough as Football Director and Darren Fletcher as Technical Director. The latter role seems a bit obscure and to revolve more about not alienating sought personnel. But the former role can be anything from an advisory role for PR purposes or closer to an actual DoF.

My post was not a dig at Ole.

No, it was a dig at the Glazers.
The Glazers own the club, they can decide anything they want to. They seem to rely on the football people at the club for advice, but unfortunately the advice they get seems to be all about advancing one good ole boy after another, rather than seeking out the best of the best.
I think that nepotism is now the United way.

To change the culture at Utd to one where excellence is prized above who you know, the Glazers would have to go against all those entrenched interests at the club. And the fans wouldn't stand for that.

 

[meamth]

What will this actually do Social media executive?

Praying with black magic that his team will win tonight so his salary won't get cut?

This is silly.

 

[Skills]

Feels like it should be for managers.

 

[spiriticon]

Pretty sure the players already have this clause in their contracts.

They do. I read they have a 25% cut if no Ch lge the season after.

Sweet! I always thought they only got cut if the club was relegated.

 

[Dansk]

They'd never agree to something like this, so it's about as meaningless as suggesting that police should be paid according to how pleased people are with their work. There's no point asking those in charge to do something that isn't beneficial to them. They're not going to say "oh, you're right, I should be held more accountable and should be punished if I don't do well."

 

[Bastian]

No, it was a dig at the Glazers.
The Glazers own the club, they can decide anything they want to. They seem to rely on the football people at the club for advice, but unfortunately the advice they get seems to be all about advancing one good ole boy after another, rather than seeking out the best of the best.
I think that nepotism is now the United way.

To change the culture at Utd to one where excellence is prized above who you know, the Glazers would have to go against all those entrenched interests at the club. And the fans wouldn't stand for that.

I don't buy that for a second. Who from within the United ranks recommended van Gaal? Well, they hired him and it was awful stuff. Then they hired Jose who was obviously a huge name, despite being on a downward trajectory, and that went to shit too. I don't think I've ever seen anything on who specifically recommended Ole for a caretaker role, but gifting him contract after contract is Woodward's doing. I very much doubt Murtough recommended the latest round of contract extensions for the manager and coaches. If Fletcher's role is only to be a face to potential recruits, that's not a strange appointment at all, you see similar at most top clubs and he is intelligent.

I'd give far more weight to the notion that Ole is still in a job and no significant coaches have been hired because they've bought fully into Woodward's MO which is making it up as we go along, and now seems to be about United DNA. Ole is just a mouthpiece for that, he's not the decision maker, he was hired by the decision maker.

 

[terraloo]

Sweet! I always thought they only got cut if the club was relegated.

I very very much doubt that players will get a pay cut on their basic salary if the club fails to qualify for the CL. It is possible that there is a relegation clause but at the likes of Utd it’s quite possible that no such clause exists
It is far more likely that the players receive a bonus for CL qualification
Now you of course would expect bonuses to be withheld in the even of not having a CL place and you would expect that to be the case at every club except that sometimes players do indeed get bonuses along those lines indeed PEA at Arsenal continued to qualify for such a bonus even though Arsenal didn’t gain CL qualification .
Mad

 

[cyril C]

most execs have at least a 50% performance bonus, usually more

but it will be linked to financial performance, not footballing - and that's how it will always stay under the Glazers I reckon

By default football performance is related to financial performance, although CL qualification >> FA/League Cup, hence Coach get sacked on failing to qualify for CL even after winning FA. Should the Club win Europa + CL qualification, there might be additional bonus for winning trophy.