Imagine that you’re me. You work in an average job, for an average employer. You love your work, but it is thankless at best. If you’re me you make an average amount of money, maybe slightly above average. But what you make, you’re thankful for and you make it enough to get by.
Now imagine that one day, while at work, you’re having an average lunch at an average eatery. You sit down at an average table that overlooks the average road in front of you. All around you are average people eating their average lunch. Some are rushing to get to their next meeting, some are having a good time chatting with their co-workers. Some are speaking in hushed tones on their cell phones. In the background you hear the employees taking orders. Out in the street there are cars grinding through the average traffic, and construction workers holding up average signs, that slow traffic an average amount.
Now imagine that through all this you hear two men speaking. These two men are sitting near you and you have better than average hearing, so you can clearly make out their entire conversation.
Man 1: I just don’t get it.
Man 2: What don’t you get?
M1: So I’ve been working on this project and I’ve increased it. It’s going to make the company 45 million by the time I’m done with it.
M2: That’s great. So what is your commission going to be?
M1: It’s going to be around 35%. That’s what I don’t get.
M2: That sounds about right. I was working on this project and it made 25 million. My commission was in the 30% range. But then there was my bonus too.
M1: But the bonus part that’s what I don’t get.
M2: What do you mean?
M1: Well let’s say there is a guy working for my company. His first year his projects make 1 million, the next year they make 3 million, the third year they make 1 million, and the fourth year they make 10 million.
M1: In that fourth year. His bonus is going to be an extra 10 percent because of his increase from year three to year four.
M2: Makes sense.
M1: Now in my first year my projects made the company 25 million, the second year they made 30 million. Last year they made 65 million, and this year I’m making them 45 million.
M1: Now I don’t get a bonus on top of my commission, because I didn’t make the company as much money as last year. The guy I told you about is getting a bonus on top of the commission he made. I don’t get it.
M2: Yeah that sucks. Management should really treat you better. You should come work for my company.
M1: Yeah I should. I make my company so much money, I deserve more. I get that I’m not making them as much as last year, but I’ve always made them a lot of money. Much more than that other guy. But now he’s the one with the bonus because of the reward structure where you have to do better every single year over the last year.
M2: I can’t believe the way they are treating you.
This isn’t the end of their conversation. But this is the point at which I stop listening. I’ve finished my lunch and I’m reading to go. But because you’re me, you also have better than average math skills. Let’s assume the guy complaining made an average of 35% commission every year. That means in his first year he made around 9 million dollars. His second year he made around 10 million. Assuming his bonus of 10 percent came in that year, he’ll get an extra million. (I’m rounding these numbers for ease of understanding) His third year his commission comes to 22 million and his bonus would be just over 2 million. In his fourth year he’s bringing home a little under 16 million, but the poor baby gets no bonus. That means his total earnings, before taxes (Thanks Obama), is somewhere around 60 million dollars over the course of 4 years.
Now the co-worker he complained about made a much more modest amount. Doing the same rough calculations you’ll see he made 350 thousand his first year. 1 million his second year, with a bonus of 100 thousand. His third year another 350 thousand, with no bonus. His final year he made 3.5 million with a bonus of 350 thousand. That makes his pay check for four years, somewhere around 5.5 million.
I don’t know what these guys do for a living. I don’t want or need to know. All I know is they have no room for complaining. They are sitting there in the middle of a bunch of people who would slit there mother’s throats for that kind of money. This is a classic example of an argument between millionaires and billionaires over who deserves more money. Who cares? I have no pity what-so-ever for either of these dudes. They are making a disgusting amount of money for both their employers and themselves. No matter who wins the argument, everybody else loses. That person behind the counter who served your lunch, loses. The people around you, who had to listen to your sob story of only making 60 million dollars, loses. The cars passing in the street, and the construction workers, who probably either make just enough to get by, or are rushing off to jobs that make them miserable, they lose. You and me, who have nothing better to write or read about, now we lose.
And now… now I am done with my sorted tale. I hope you enjoyed it, I hope it was more than average for you.