Not all heroes wear capes: Contractor grills DXC globo veep on pay rises, offshoring, and cuts to healthcare help

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

Clearly you can replace the peons.... oh, wait...

Great to see a mention of TESM and BusinessNow, both ServiceNow specialists now lined up to go the way of Fruition Partners and be crushed by the weight of the bean counters and there business restricting policies

GFDXC

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

Spot on, Pascal. If you hadn't said it I would have. It's a stupid statement that indicates his lack of grasp on reality just as much as the mention of magic.

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

"you can replace a CEO anytime without impacting either company revenue or customer satisfaction. You can't do that with the peons that actually do the work and bring in the money"

It's that dreamland 'star CEO', the fantasy that if you just pay enough you're going to find the next Jobs, some messiah that will take your company from the middle-of-the-pack to the rising star, top of the pile. The reality is that most of the companies are same-same middle-of-the-pack, and just as the 'peons' can move from company to company with little effect, CEOs can move from company to company with little effect. Top salaries in companies used to be around 20X the bottom pay in the 60s and 70s. Now it's like 1000X. Are the companies run any better now than they were then? Like hell they are!

The problem, as with many other things, is the incentive structure. If CEO's pay is tied to short-term gain, to share price etc, then they are going to prioritise hype and short-term revenue bookings and cost cutting (ie firing / outsourcing) over long-term customer satisfaction. They don't own the company and have no emotional attachment/investment neither to the company itself nor to the employees.

Thought experiment... if any of these companies decided to cap CEO salary at 1M and other C-suites at high 6-figures, with all the other levels adjusted proportionately and the difference distributed in bonuses / benefits for all employees... would they find someone competent from within the company who is willing and able to do the job for that amount? Would that someone deliver better or equal results to the CEO paid 50X as much? Would morale among employees be better? Would customer satisfaction / retention increase?

My take is the answers to all of those would be yes, but the wall street vultures would tank the companies' stock for not having a 'star name' CEO and hostile-takeover the company / return to BAU before the positive effects had any chance to show through. After all if that business model took over they are among the ones with the most to lose

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

Pascal, please enjoy a pint on me while I RiverDance on the upvote button in the hopes it improves your score accordingly.

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

Replacing a CEO affects the share price. That's it. and it's a biggie.

Corps are slaves to the equities market. Quarterly reports are THE performance metric. Long range planning and future value is old fashioned.

The immediate greed of the shareholders is what drives a corporation. That and the stock options handed out at the C level for price performance.

The CEO's only job is to sell the corporation to investors.

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

"We do not give out automatic raises, that is not a philosophy, not an approach that we subscribe to."

Translates to:

"You will get a pay cut every year. Go fuck yourself."

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

You learn something new everyday. I've always seen the CEO as the ringpiece of the company.

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

Problem however is that pesky morale.

In high-skill industries with a reasonable job market, the best and brightest are going to vote with their feet. Even if the job market isn’t great, you’re going to see attrition from the people who are best at delivering value that the customers actually pay for. Indian staff may (or may not) replace them, but, if DXC is all-Indian anyway, why not buy your outsourcing cheaper from Wipro? Just because they suck at security?

Very high CEO $alarie$ at those times don’t help because they put the lie to this sweet “we’re all in this together”. (Good on the author to pull up the SEC filings)

Maybe some flogging, pour encourager les autres, would help?

P.S. an exceptional CEO can make a big difference. problem is that exceptional pay is the norm for even mediocre ones. and, furthermore, I believe that there is a ethical problem with 200-300x median salaries that is slowly poisoning capitalism and free markets.

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

I’ve often thought that all that talk of Robotic Process Automation (RPA) should start by replacing the CEO of a company. They come and go so often that it must be possible? Stick some AI and ML on top, save a bundle, and it works 24/7 for you! What’s not to like?

Re: "the workforce doesn't carry the hopes and dreams of shareholders on their back"

And, you can replace a CEO anytime without impacting either company revenue or customer satisfaction. You can't do that with the peons that actually do the work and bring in the money.

"The cemetery is full of irreplaceable men." One of my favourite quotes, though I forget now who said it.

The peons are just as replaceable as the CEO. A good CEO should add value or at least prevent mass value destruction to a company. That doesn't mean the rewards are in line, or that they all do a good job. There's several companies out there that changed the man at the top and then went from strength to strength - look at MSFT under SatNad.... the staff are essentially the same, but the direction, and revenues, are much improved.

"It is the shareholders that are the focus of this"

More to the point it's the short term share price. Or maybe the medium term because it seems you can circle the drain for a good while before you go down it.

lol

The shareholders is a red herring. They are getting shafted too.

The only ones who benefit are senior managers. Not shareholders, not workers, not customers.

Does he not realise that magic is nothing more than an illusion, sleight of hand?

"Shareholders are the most important thing going at any company, and they must be kept happy at all costs."

One big problem - the major shareholders in these companies are usually hedge funds, mutual funds, or other types of investment vehicle*. They want high returns because that's what they're promising to the fund holders, and the fund holders will take their business somewhere else if the returns aren't up to their expectations. In the case of hedge funds, there is nothing we can do about that.

In the case of mutual funds, the fund holders are the common middle class, in many cases the same employees of these companies. If these people (ie you and me) pull their money out of funds with high-risk high-return and into funds with low-risk-low-return, it would have a knock-on effect on the shareholder *requirement* for increased returns.

It requires some more shareholder activism from the people who actually own the money invested to get the company boards to make better long-term decisions on their behalf. But unfortunately the ownership is usually filtered through many layers of ownership to the fund managers, who are both the ones most interested in a short-term quick return (because that's how they make their bonuses) and the loudest-shouting shareholders who the board listens to.

* In the case of the other major shareholders, pension funds, one would hope that they are already more heavily invested in 'safer' lower-return vehicles not so much in equities and so don't care that much.

Of course I don't know your wife's story, but I think she's got the wrong end of the stick. If her client will hire her with better salary and working conditions, then she should just quit DXC and move on. Making herself miserable to try to screw a redundancy payment out of those buggers probably ain't worth the grief of continuing to work for them. They have a lot more resources than she does and can simply outlast her. Leaving now, she might possibly miss out on some dosh, but peace of mind is worth a lot, too. I think she'd be better off to just walk out, shake the dust of DXC off her feet and go work for someone who appreciates her.

OMG - I totally get your wife's point...

I didn't get any of my seniority when I converted because prior to that I was a contractor TO DXC... Honestly, given the choice, I would have stayed that way...it wasn't as reliable, but it paid better (OMG MUCH BETTER) and gave me the satisfaction of being able to say "no" from time to time when they asked me to do something that crossed my personal ethical lines. (My personal sense of ethics is much more stringent than HPE/DXCs)

So if they WFR me at this point, it's 2-weeks notice... I'm waiting for the "We're WFRing you, but you need to train your indian replacements" because I'll laugh my happy ass right out the door and it will be worth every penny.

I've worked hard to become a single-point-of-failure for exactly this reason. :)

There is an alternative if the client's on-side. Have them make it clear their contract is dependent on her. Then she hands in her notice and starts negotiating. Insist on the new pay rise being backdated a couple of years. Collect the back pay. Then quit anyway.

Thanks from the missus

Just a quick post scriptum that my wife read the responses with interest and appreciated them.

At this point, because she just has zero connection to DXC emotionally anymore and because she's happy at he gig, she thinks she might as well hang around. She's not unhappy with the client and ignores DXC entirely (she now refuses to take part in any of the annual "performance review" bullshit for instance - what's the point, after all?)

She wants to build a few more bona fides and then go out as contractor herself, so yes, it would be delicious if she ends up contracting for DXC as they're desperate to hold on to the client (a major financial institute).

It is indeed most likely that at one point she will just shrug and move on, but at this point in time, all things considered, she can finish off her projects and then get her bearings.

She's grimly hanging on.

It's a waste of time. The best revenge is to move onwards and upwards in a better job with a better company for a better comp package.

In the City, you might get a doughnut one year (no payrise / bonus), a second back to back doughnut is known as a Bond (double-O) and is the clearest signal its time to leave the bank, your career there isn't going to blossom. Managers will try their very hardest to pretend to your face that it isn't the case, but it is, and everyone knows it.

While salaries are generally set at replacement level rather than some chronology or inflation based oddity, if the company doesn't think you've moved up the value proposition in 24 months then they'll never respect you.

I worked for a very shit bank once and tried very hard to get paid out, but they made it clear it was simply never going to happen - I had a job for life but I had that job for life, which wasn't what I wanted. Quit and move on - C suite ineptitude isn't personal - they simply don't know or care that you exist.

Entire TUPE-ed development team applied for VR, refused as "protected for 6 months".

At a guess only some of them will get VR as they'll need to leave a skeleton crew in place. If the VR isn't that good anyway the entire development team handing in their notice might have been a better ploy.

It's called a Cost Of Living Adjustment.

If the employee doesn't get a COLA raise every so often then they are actively being screwed by their employer.

When everything around you costs more but your employer refuses to pay you accordingly, that's when you send a notice to the local labour bureau to complain about unfair business practices.

Re: BS

There are many in similar situations - high performers, put forward for pay rises by their managers who have been waiting years to hear something. The DXC process, by which you are only notified if you are successful. doesn't help.

Smith is (probably) telling the truth in that he approves multiple pay rises every week. It's probably literally a few, leaving hundreds of others unapproved.

Pay rises DO exist within DXC but you have to be a consistently high performing flight risk in a growth area whom they REALLY want to keep.

Re: BS

Agreed. I discussed with my manager in January 2018 about a merit increase, and he agreed. So did his manager. In fact, all the way up to the manager of our division agreed that a merit increase was indeed merited.

By November 2018, nothing had happened.

This wasn't an isolated incident; the droves of people quitting said exactly the same things.

It should be noted, too, that whilst DXC may not believe in the outdated concept of annual raises, it sure as hell believes in sticking it to employees every possible opportunity. My take-home pay fell, rather reliably, every six months.

So glad I'm out of this rotting carcass of a company.

There should be some get out clauses in their contract to end the service with DXC if it gets so bad that it affects the customers day to day operation.

I consulted alongside and with HP from the late 90s until a decade ago

The first time I worked with them I was consulting for the company that had hired HP, so I worked alongside them. They had some top people, really smart, I learned a lot from them. Made some contacts that led to me being contracted by HP in 2000 on a big project, again working with top people (all consultants like me, being supported by employees) We were getting paid insanely well, but our little team of 8 accomplished more over that 6-7 month project than I've seen teams of 50 do over three years in subsequent projects.

After the dot com bust HP started getting cheap. First just around the edges, but by the time of my last engagement with them about a decade ago they were really going downhill. I was helping them bring on some full time people for the project I was working (i.e. to replace me and the other consultants at a fraction of the cost) but all the good people I recommended didn't get hired. I assume because the salary wasn't high enough (I didn't see that part of it) and they ended up hiring people I hadn't even interviewed because I thought they were worthless based on their resume.

And it turned out they were worthless. They were just unable to comprehend what I'd set up for them to automate rote tasks like storage setup on blades or the daily massive storage allocations the client required, so they did everything manually at 10x the effort.

After that I quit answering when people I still knew from HP were trying to get me back for another gig. It was too depressing seeing how far they had fallen. Clearly they have continued to fall since then.

"The top talent from DXC is running like hell, or has already left, and they've replaced 100% of the talent with useless know-nothings from India who couldn't find their asses with both hands and a flashlight."

Yes - our internal helldesk (based in India) is every bit as bad as anything we force our customers to endure - I called them because a group policy has suddenly restricted the ability to run PowerShell scripts on my laptop - the person I spoke to did not know what PowerShell was, and then (after a long wait) said that they didn't support PowerShell.

It's things like that, that make me question my own sanity.

Re: So much management doublespeak

It would have been fun to be part of the call so I could shout "BINGO! I GOT BINGO!" somewhere at about the 30 second mark after that bastard opened his mouth.

When asked WTF I was blathering on about I'd reply happily "I filled my Buzzword Bullshit Bingo card! What do I win?"

I'd say quite a lot of people, even in this industry, expects (or hopes) of annual raises at least in line with inflation and rising cost of living, and if performance is there the raise should be noticeably above the inflation. If you get no raise at all, you're getting a paycut every year as living costs keep rising.

Re: Merit raises when everyone downrated by decree?

"It's kinda difficult to get your team a merit rise when you're not allowed to rate anyone higher than a 3"

I managed to get a 2 on my last review - but I did really push the point to my manager after only getting a 3 last time (I made the point about what expectations I had NOT met.)

1 - Exceeds all expectations

2 - Meets All and Exceeds Some Expectations

3 - Meets Most Expectations

Re: Translations

"being brave and courageous and for asking the questions you asked".

You will be leaving the company involuntarily real soon...

"In order for us to be competitive, we are going to have to take advantage of a global workforce."

In order to be competitive we need to be cheap, which means more offshoring to, and work being delivered from, Low Cost Countries.

Re: Mikey's Windfall

Compensation cuts to the execs WOULD make a difference but the difference doesn't scale. There are relatively few senior executives making big money, and none make anything like Lawrie's compensation.

Where there are big savings to be made is in 'middle management' - the L3/L4/L5 layers. There are hundreds/thousands of people in these positions earning large salaries but it isn't clear exactly what they do. Filleting those layers would make significant savings.

Re: Mikey's Windfall

Thing is, if you zero'ed all of the board's salary and stock options, its still a drop in the ocean for a (soon to be) 100,000 employee company.

It wouldn't make any difference in hiring more folk to make any meaningful difference - which actually is how these illogical cuts make some sort of sense to the spreadsheet kids.

Equally, if you took their money and split it up for raises, everyone would be lucky to see US$1000 each - which unless you are working in PR, doesn't really even begin to offset inflation.

It is a massive figure that shows excess greed, but giving that money back to "the workers" doesn't add up to much.

You can see it in the CEO pay ratio - Mikey is about 400 times the median ($77k), which roughly equates to 400 employees in the first world...its obscene but in a broader picture?