Compensation Round-Up: Fitbits, Chobani, and the Comp Chasm


Welcome to the Compensation Roundup, where we bring to you the hottest news in comp! Sample what’s happening in compensation right now, get in the know and grab some conversation starters. This week’s topics: A Boom in Benefits, Chobani’s Cup Runneth over, and the Comp Chasm. Let’s dive in.

Chobani Employee Stake: Gift from the Greek Gods or Probiotic Power Play?

The low down: Dan Price who? In a surprise move, Chobani founder Hamdi Ulukaya announced Tuesday, April 26, that his 2,000 employees will get a stake in the company, which could amount to millions for some very lucky lackeys. The shares will be distributed based on tenure: the longer the duration of employment, the greater the stake. The average payout will be anywhere between $150,000 to over 1 million dollars. The employees will get the shares when the company goes public or is sold, which is rumored to happen soon.

Sounds like a dream come true, but as with most recent comp grand gestures, there could be a dark side. Some rumors say that this isn’t a total heart-of-gold move, and that Ulukaya is attempting to proactively stick it to TPG, the Texas-based private equity firm who made a $750 million rescue loan to Chobani in exchange for rights to purchase 20 percent of the then-struggling company’s shares. Since then, the company have experienced tension over commercial differences. Ulukaya’s employee stock deal would take a bite out of TPG’s potential stake, which would be calculated from the remaining 90 percent.

Our take: Slightly curdled. We feel the same way about this comp move as we feel about the brand’s new Sriracha Mango flavor: we want to like it, but we don’t. For one thing, the fact that the shares are awarded based on tenure, not performance, is bound to inspire sour sentiments between top-performing employees and their average peers who have just happened to work there longer. Secondly, we know this company has a shaky financial history, so going big may come back to haunt them later. Also, as we saw from the Gravity backlash, mixed motives can give even the grandest gesture a very short shelf life. We say, it’s tempting, but step away from the spoon.

 

We like Big Benefits Packages and We Cannot Lie

When a girl walks in with an itty bitty waist…it might be because there has been a reported rise in employee wellness benefits like Fitbit trackers, gym reimbursement, and standing desks. In a report by the Society of Human Resource Management surveying more than 450 employers surveyed, 35 percent cited bigger benefits packages, compared to 28 percent the year before. A small portion of those asked—7 percent—noted a reduction, but that’s down from 9 percent the year earlier. Moral of the story? Benefits are starting to offer as much bang as a buck.

The study also noted a rise in more creative benefits. Beyond fitness, there were also benefits like egg freezing and student loan repayments (errr, where do we sign?).

While the article goes on to state that none of these benefits can ever truly replace good old cash, they are becoming increasingly important.

Our take: budget approved. We know from our own research that top-performing companies tend to have a more creative mix of compensation, so it pays to think more about variable pay than we have in the past. Time to bust out the benefits.

 

Employees to Employers: Fair is a Four Letter Word

PayScale data recently revealed a massive gap between how employees view their compensation, and how employers view it. This phenomenon, labeled “the comp chasm,” reveals that while 73 percent of employers believe they are paying fairly, only 36 percent of employees agree. This is just one in a series of stark disparities between how employers and employees view key employee engagement issues.

Our take: mind the gap. This vast chasm between how companies view things and how employees view things spells trouble down the road. Compensation is still one of the number one reasons people leave companies, and retention is a top concern for employers for the fifth year in a row. Why isn’t anything changing? One thing is clear: annual associate surveys are not enough to give employers a sense of how employees are really feeling. It may be time to re-evaluate not just your comp strategy, but your feedback mechanisms as well.

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