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Never stalk about the Farmers Business Network. The Hustle Fri, Dec 1 Brought to you by tasc Performance… bamboo yourself a favor. Why execs get huge bonuses after running their companies into bankruptcy After getting “crushed by a mountain of...
Why execs get huge bonuses after running their companies into bankruptcy
After getting “crushed by a mountain of debt” and declaring bankruptcy, Toys R Us execs are seeking approval for $16m in bonuses to pay themselves.
According to the toy chain, this is “standard practice,” and sadly, they’re right: in the event of a corporate collapse, the businessmen at the top of the food chain are frequently awarded multi-million dollar payouts — all while the thousands of hard-working employees beneath them are laid off.
They’re called “bankruptcy bonuses”…
And they’re incredibly common. A WSJ study found that, over a 5 year period, 1.6k execs were rewarded with a collective $1.3B in bonuses — an average of more than $800k a piece — after running their companies into the ground.
Some of the more egregious cases in recent years:
After car-parts company Lear Corp. went broke, it paid out $20.6m in bonuses to a handful of top execs, while 20k employees were laid off.
Hostess cut its bakers’ salaries by 8% after filing for bankruptcy, but gave its execs raises of 60-100%, in addition to $1.75m in bonuses.
Circuit City paid out $2.3m in bonuses while cutting 39k jobs and liquidating their entire inventory.
And of course, let us not forget the titans of bankruptcy bonuses: the Wall Street execs who collectively raked in more than half a billion dollars after the 2008 financial crisis.
How is this legal?
A 2005 federal law restricts companies’ ability to pay execs bonuses during times of restructuring — but, as is often the case for rich folks, there are lots of ways to get around it.
Some companies give their execs “incentive plans” that reward them for hitting benchmarks, and in the fine print of these plans, they classify going through bankruptcy as a bonus-worthy occasion.
Which means, for executive teams, bankruptcies are not just an opportunity to restructure — but to cash in big.
Heads they win, tails they win
‘LinkedIn for farmers’ pulls in a shiny new funding round
Expensify’s “SmartScan” technology was secretly being powered by humans
Expensify specializes in a “SmartScan” technology that handles everyone’s most loathed work-related task: filing expense reports.
The software company is said to reimburse millions of dollars daily, all with their “autonomous” tech that peeps personal receipts that are often full of private info like names, emails, and sometimes even bank routing numbers.
So naturally, after finding out the expense report software hero has been secretly posting personal invoices to a freelancing website to transcribe their expenses, people were… incensed.
Real “smart,” guys
The malfeasance was discovered by activist Rochelle LaPlante while she was looking for work on MTurk, a freelance job site.
Contractors on MTurk take on various “human intelligence tasks” (AKA “HITS”) such as image-tagging, proofreading… and apparently, transcribing people’s personal receipts.
After finding various examples — including an invoice for a stay at a Saudi Arabian hotel, equipped with the person’s name and bank account number — LaPlante immediately called out Expensify out on Twitter.
Care for some human with that robot?
After the Tweet, Expensify CEO David Barrett tried to save-face, explaining in a blog post that they farmed receipts out as part of a “new privacy-enhancing feature.”
Sounds a little fishy (we’d assume humans are harder to monitor than algorithms when it comes to ripping off data). And to make matters worse, according to Barrett, they’ve been farming receipts out to MTurk since 2009.
“Alexa, disrupt my coworkers” — Amazon unveils Alexa for work
At its annual developer conference, Amazon’s CTO Werner Vogels repped the Foo Fighters — and announced a slew of software updates, including the latest evolution of its voice assistant, Alexa for Business.
In other words, your open office is about to get a lot chattier
It’s also opening the floor for other software companies to develop Alexa custom skills — like Salesforce, which is already working on an integration to let workers check in on the status of their quarterly deals.
The goal is to create an “ecosystem” of developers building features for the platform so that its usefulness grows exponentially over time (for reference, Alexa currently has about 20k skills — Microsoft’s assistant Cortana only has around 200).
Guess who’s one of their pilot customers?
Who else? WeWork.
WeWork will partner with Amazon to pilot A4B skills they’ve developed in-house, allowing members to do things like dim lighting and adjust room temperature — or rather, “submit temperature change requests via Zendesk.”
When the founders of tasc Performance — father and son duo, Al and Todd — wanted to make an insanely comfortable and classy performance shirt, they started with the material.
Cotton? So soft, so breathable — so shreddable. Polyester? Indestructible, but after 18 holes, a back alley dumpster fire smells better. And wearing either to the bar afterward? Fuggedaboutit.
That’s why tasc uses Moso timber bamboo. Aside from sounding like a luxury cologne, the bamboo’s unique fiber provides the perfect balance of comfort and performance.
Performance clothing, couch-potato comfort
tasc is so fabric-obsessed that they’ve developed over 15 unique fabrics with their patent-pending process, BamCo® (AKA comfort magic). No stink, no shreds, and 50+ SPF protection — these clothes feel amazing, and perform even better.
From the links to the track, the yoga studio to the bar(re), tasc has something for everyone. Plus, the earth warrior in you can rest easy knowing tasc is committed to sustainable production of all it’s products.
Bamboo yourself a favor, see the full line-up of men’s and women’s apparel at tasc. Get fit, comfortably.
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