Pay Cuts in Commercial Semi State

thegoth

Mystik Monkey wrote: »

misinformed and silly ranting like this deserves a home on facebook, somewhere between the " i had porridge for breakfast" group and "join if you hate Theirry Henry" :rolleyes:

Where do you work ?

Lets let the people judge by how many join it

Dr Galen

thegoth wrote: »

Where do you work ?

Lets let the people judge by how many join it

where I work has nothing to do with it, does it? I don't work for ESB or any semi-state if thats what your getting at. Of course, you'd see a post from me a few pages back stating just that in response to another posters argument. I take it you didn't read back that far.....sure just go with the whole Indo thing, sure they're never wrong

ok so

you seem pretty confident of your reasons for starting your facebook group. Wanna outline them here? Convince us?

Rujib1

td2009 wrote: »

Only yourself to blame so :pac: and did you go into the private sector for more money at the time? :rolleyes:

Nah. It was 1978. My contry needed me. I answered the call. Cometh the hour, cometh the man. Just a damn shame I had to miss out on free shares in ESB as a result, and a fat pension, and a good pay cheque, and Brendan Ogle as my spiritual guide

vandermeyde

if we reach a stage where the government is able to dictate to commercial enterprises as to what their pay levels should be we might as well just call ourselves the Irish Socialist republic.

The payments the government makes to those various companies in the forms of public service obligations or subventions have been reduced substantially over the last 18 months with the result the most of them have been engaged in negotiations with their staff about work practices/reduced payments/redundancies and combinations of all three.

RTE, An Post, DAA, CIE, have all gone thru that process in various degrees and will go thru the process again early next year.

The appetite for the pound of flesh in this country is one of the most disheartening aspects of this whole recession.

Sleepy

nouggatti wrote: »

Potentially not due to the loss of the tax take.

Imo the govt would lose too much in tax to make the equation as simple as "pay cut = equal increase in dividends"

I don't see how the maths behind this works:

employee earns 10k less in the higher bracket

ergo the government loses tax take of approx 5.5k

but the pot which pays their dividend increases by 10k (assuming you ring-fence the salary cut savings for this purpose).

Now given that the government is the majority shareholder, they would get back a majority of this 10k which would exceed 5.5k while also benefitting from the more valuable asset the ESB has become (since it's profits are now slightly higher).

I don't buy the logic of 'it'd only make a small difference'. Lots of small differences amount to a large one. There are no 'silver bullets' in the real world.

Dr Galen

but why would we punish employees in a company that makes a profit each year?

ei.sdraob

Sleepy wrote: »

I don't see how the maths behind this works:

employee earns 10k less in the higher bracket

ergo the government loses tax take of approx 5.5k

but the pot which pays their dividend increases by 10k (assuming you ring-fence the salary cut savings for this purpose).

Now given that the government is the majority shareholder, they would get back a majority of this 10k which would exceed 5.5k while also benefitting from the more valuable asset the ESB has become (since it's profits are now slightly higher).

I don't buy the logic of 'it'd only make a small difference'. Lots of small differences amount to a large one. There are no 'silver bullets' in the real world.

considering the state owns 49-50% share

they would not get more than this % in dividends....

and remember employees are shareholders too here

thegoth

Mystik Monkey wrote: »

where I work has nothing to do with it, does it? I don't work for ESB or any semi-state if thats what your getting at. Of course, you'd see a post from me a few pages back stating just that in response to another posters argument. I take it you didn't read back that far.....sure just go with the whole Indo thing, sure they're never wrong

ok so

you seem pretty confident of your reasons for starting your facebook group. Wanna outline them here? Convince us?

Very simply. Semi state companies are not true companies. Most receive a subsidy from the government. In CIE's case I believe its about €340 million a year. Companies that do not receive a subsidy, are can be very sure that they price they receive for their product will never fall below a certain level that the business cannot survive at e.g the ESB at the yare regulated by a government body.

For example the ESB can say it has pay costs or €71,000 per employee, then cost of materials, then additional overhead plus a profit percentage. This is the min value that the ESB will receive for its product. In the real world of companies, the price that can be charged is set, for example for a car in the new small car segment, the cost would be about €13,000 and companies have to produce the best car it car to sell at that price so all costs are squeezed to reflect this. If a competitor lowers the cost to €12,000 then the car company will have to respond by lowering costs, including wages to match. This is how real companies work. This is not how semi state companies work so the same business rules cannot apply.

The ESB can never go out of business, EVER as the country could not run with no electricity. They will always be allowed to charge at least enough to break even. Therefore it will NEVER be able to plead inability to pay.

Dr Galen

thegoth wrote: »

Very simply. Semi state companies are not true companies. Most receive a subsidy from the government. In CIE's case I believe its about €340 million a year. Companies that do not receive a subsidy, are can be very sure that they price they receive for their product will never fall below a certain level that the business cannot survive at e.g the ESB at the yare regulated by a government body.

For example the ESB can say it has pay costs or €71,000 per employee, then cost of materials, then additional overhead plus a profit percentage. This is the min value that the ESB will receive for its product. In the real world of companies, the price that can be charged is set, for example for a car in the new small car segment, the cost would be about €13,000 and companies have to produce the best car it car to sell at that price so all costs are squeezed to reflect this. If a competitor lowers the cost to €12,000 then the car company will have to respond by lowering costs, including wages to match. This is how real companies work. This is not how semi state companies work so the same business rules cannot apply.

The ESB can never go out of business, EVER as the country could not run with no electricity. They will always be allowed to charge at least enough to break even. Therefore it will NEVER be able to plead inability to pay.

so why should we cut ESB workers wages?

other semi-states are different as they get a government subvention. Cuts may be necessary there alright. AFAIK management of some of those other companies are engaged in cost cutting measures, with varying degrees of success.

seangal

Mystik Monkey wrote: »

but why would we punish employees in a company that makes a profit each year?

We don’t need to make a large profit
What we want is cheap energy from the ESB
What we want is cheap health cover from VHI
The nurses and consultants have take a pay cut and this should reduce the cost which VHI have to pay for a person in hospital and should lead to a reduce in the cost of cover.
If we now reduce the VHI pay bill them we should see a reduction in the cost of our health cover also
So what are the odd that VHI will reduce it plans by 15 %
I would say no chance so it is time to privatise the semi state companies

vandermeyde

seangal wrote: »

We don’t need to make a large profit
What we want is cheap energy from the ESB
What we want is cheap health cover from VHI
The nurses and consultants have take a pay cut and this should reduce the cost which VHI have to pay for a person in hospital and should lead to a reduce in the cost of cover.
If we now reduce the VHI pay bill them we should see a reduction in the cost of our health cover also
So what are the odd that VHI will reduce it plans by 15 %
I would say no chance so it is time to privatise the semi state companies

Surely if you've got a problem with the VHI, you'd just go to Hibernian or Aviva or one of their competitors?

If you've got a problem with the ESB, you go to Airtricity or Bord Gais?

Dr Galen

seangal wrote: »

We don’t need to make a large profit
What we want is cheap energy from the ESB
What we want is cheap health cover from VHI
The nurses and consultants have take a pay cut and this should reduce the cost which VHI have to pay for a person in hospital and should lead to a reduce in the cost of cover.
If we now reduce the VHI pay bill them we should see a reduction in the cost of our health cover also
So what are the odd that VHI will reduce it plans by 15 %
I would say no chance so it is time to privatise the semi state companies

it's already been pointed out in previous pages that wage costs do not sufficiently affect the price that ESB charges. Do we realy need to go through that again? Just read back a bit and you'll see the actual figures.

As for VHI, well the wage costs of doctors, nurses, physios etc are a very small part of the premium. We have an aging population, with increasingly complicated health problems and with new and expensive treatments being needed. VHI have a higher proportion of older patients than the other insurers and thus pay more out in claims than the others, that a much more relevant reason for the higher premium. Reducing payroll costs at VHI would probably have en effect, but I don't know as I haven't seen the breakdown of costs. Again, simple logic like your applying above doesn't always hold through in a business that operates in a complicated marketplace.

thegoth

Mystik Monkey wrote: »

so why should we cut ESB workers wages?

other semi-states are different as they get a government subvention. Cuts may be necessary there alright. AFAIK management of some of those other companies are engaged in cost cutting measures, with varying degrees of success.

Because ESB workers are being paid an artificially high rate. €71,000 average per employee is ridiculous. If the ESB were a private company like airtricity, then they would be earning alot less. That in itself is not the problem though. The problem, is we, the consumers of electricity, are forced to pay artificially high rates per unit to pay these salaries. Even if you are with another electricity supplier, you are still paying the ESB for the wholesale rate and the use of their equipment.

If rates of pay in the ESB AND other semi state companies fall to levels in the private and public sector, every person in Ireland will benefit from savings in electricity, bus travel, train travel, air travel, gas, postal services, and maybe even TV licence fees for a start

And please dont use "The labor cost in ESB is tiny". Its the principle that we are still paying over the odds. If I stole 50 cent a month on you would that be ok ? No, its wrong, especially now we are in a national crisis, everyone should be doing there bit, not adding to artificially high costs

Dr Galen

but we're not paying over the odds to pay those salaries. it is written policy from the regulator that the ESB prices are artificially high in order to stimulate competition in the market. Not a mention of salaries. You also know that the ESB cannot set it's own price to consumers i take it?

If we were paying over the odds, so that ESB workers could have high salaries, well then wouldn't the percentage of costs attributable to wages be much higher? The average salary for an ESB worker is also a skewed figure, as it counts the Chairman, who is on over 500k, which is a bit mad alright. It was worked out to be closer to 48k on average by someone a few pages back.

super_furry

I honestly think that this is just a major case of jealously and bitterness from people backing the idea. They may have lost their jobs or has paycuts (like many in the semi-state workforce) and want everyone to suffer like they are. Why on earth would you cut the wages of those in a profitable and succeeding company?

vandermeyde

super_furry wrote: »

Why on earth would you cut the wages of those in a profitable and succeeding company?

To be honest, I reckon it's a sign that we're probably approaching the bottom of how bad things are going to get. The feeding frenzy is starting which is normally the sign, rational thought goes out the window and it's all about the pound of flesh.

Hopefully it won't last long and will be cathartic so we can get on with the business or trying to get this country back motoring rather than scrapping among ourselves.

Dr Galen

ei.sdraob wrote: »

it wont because employees salaries are a tiny percentage of overall expenses and falling rapidly as employee numbers fall

this would be apparent to anyone who bothers looking at accounts
http://www.esb.ie/downloads/about_esb/2007/esb-annual-report-complete-2007.pdf

but lets not have facts get in the way of passionate and uninformed arguments eh?

another interesting load info here
http://www.esb.ie/downloads/facts-at-a-glance-2008.pdf

i'm quoting this so that all those who have skipped the discussion to this point can see where ESB's actual costs lie, and where maybe they could look to reductions

ei.sdraob

thegoth wrote: »

Because ESB workers are being paid an artificially high rate. €71,000 average per employee is ridiculous. If the ESB were a private company like airtricity, then they would be earning alot less. That in itself is not the problem though. The problem, is we, the consumers of electricity, are forced to pay artificially high rates per unit to pay these salaries. Even if you are with another electricity supplier, you are still paying the ESB for the wholesale rate and the use of their equipment.

If rates of pay in the ESB AND other semi state companies fall to levels in the private and public sector, every person in Ireland will benefit from savings in electricity, bus travel, train travel, air travel, gas, postal services, and maybe even TV licence fees for a start

And please dont use "The labor cost in ESB is tiny". Its the principle that we are still paying over the odds. If I stole 50 cent a month on you would that be ok ? No, its wrong, especially now we are in a national crisis, everyone should be doing there bit, not adding to artificially high costs

why dont you read the thread

i posted figures earlier

ei.sdraob wrote: »

....

now to move onto facts from http://www.esb.ie/downloads/about_esb/2007/esb-annual-report-complete-2007.pdf

Net payroll cost for employees (excluding pension): 364,643,000
Total Operating cost: 3,068,896,000

thats 11% goes to salaries (and probably fallen since the company is shrinking)

the above is only operating cost, im not including the billions being spend on retrofitting old plants, like the third of a billion Moneypoint project to scrub **** from exhausts


the above cost of salary divided by 7500 employees is an average salary of 48K, now this of course is distorted since the chairman was on a salary of 500K, while alot of people at the lower levels are on 20K and 6 months contracts

...

thegoth

Mystik Monkey wrote: »

but we're not paying over the odds to pay those salaries. it is written policy from the regulator that the ESB prices are artificially high in order to stimulate competition in the market. Not a mention of salaries. You also know that the ESB cannot set it's own price to consumers i take it?

If we were paying over the odds, so that ESB workers could have high salaries, well then wouldn't the percentage of costs attributable to wages be much higher? The average salary for an ESB worker is also a skewed figure, as it counts the Chairman, who is on over 500k, which is a bit mad alright. It was worked out to be closer to 48k on average by someone a few pages back.

I'd say its ALOT more than 48 when bonus and overtime are taken into account.

So you accept that the ESB are getting paid too much per unit of electricity. I know they dont set their own prices. What are they doing what that cash ? They are over paying their staff. This is a company, owned by the citizens of Ireland, which is wasting money overpaying its staff. Its that simple. I, as I shareholder, strongly object to this.

ei.sdraob

thegoth wrote: »

I'd say its ALOT more than 48 when bonus and overtime are taken into account.

So you accept that the ESB are getting paid too much per unit of electricity. I know they dont set their own prices. What are they doing what that cash ? They are over paying their staff. This is a company, owned by the citizens of Ireland, which is wasting money overpaying its staff. Its that simple. I, as I shareholder, strongly object to this.

see for yourself i posted the link to accounts many of times in this thread, the information is freely available and in the public domain

billions are being spend on upgrading infrastructure and cleaning up plants so you have power to type these posts on your computer without destroying (too much) the environment for your kids

Dr Galen

thegoth wrote: »

I'd say its ALOT more than 48 when bonus and overtime are taken into account.

So you accept that the ESB are getting paid too much per unit of electricity. I know they dont set their own prices. What are they doing what that cash ? They are over paying their staff. This is a company, owned by the citizens of Ireland, which is wasting money overpaying its staff. Its that simple. I, as I shareholder, strongly object to this.

on your first point I agree that ESB prices are too high. No arguments there. Where we differ is the reasons behind this and you seem to have totally sidetracked my point on why this is the case. It is not to pay wages, but the policy of the regulator.

have you even bothered to look at the annual report, with the 2008 figures? You'll see exactly where they are spending their cash.

Since 2002 they've paid the government just over half a billion in dividends. You call that waste?

murphaph

Mystik Monkey wrote: »

i'm quoting this so that all those who have skipped the discussion to this point can see where ESB's actual costs lie, and where maybe they could look to reductions

It doesn't actually show the wages of course. Each slice of that pie has a wages component which is not explicitly shown.

I still maintain that people should all switch to another provider to then force the ESB to be allowed to compete, thus bringing true competition. The regulator here is doing the public a favour by giving other operators breathing space from the ESB to allow them attain a critical mass of customers. If the public are too lazy and or stupid to avail of an immediate 10% savings by switching, they really ought not complain about being overcharged by the ESB.

ei.sdraob

murphaph wrote: »

It doesn't actually show the wages of course. Each slice of that pie has a wages component which is not explicitly shown.

I still maintain that people should all switch to another provider to then force the ESB to be allowed to compete, thus bringing true competition. The regulator here is doing the public a favour by giving other operators breathing space from the ESB to allow them attain a critical mass of customers. If the public are too lazy and or stupid to avail of an immediate 10% savings by switching, they really ought not complain about being overcharged by the ESB.

arghghghghggh

i posted a link and figures to the last published accounts (2007) 2008 might be available as well now

with the full accounts and figures for salaries

364,643,000 for 7500 employees and X? contractors

does anyone bother reading the thread before posting?

Dr Galen

the accounts breakdown does details wage costs

as for you second point, I'm in complete agreement. Only through open competition, free from interference will we be able to bring down energy costs to a reasonable level

Dr Galen

ei.sdraob wrote: »

arghghghghggh

i posted a link and figures to the last published accounts (2007) 2008 might be available as well now

with the full accounts and figures for salaries

364,643,000 for 7500 employees and X? contractors

does anyone bother reading the thread before posting?

dude

we'll go have a pint and let everyone catch up

ei.sdraob

Mystik Monkey wrote: »

as for you second point, I'm in complete agreement. Only through open competition, free from interference will we be able to bring down energy costs to a reasonable level

complete agreement here

we are in this mess due to neglect and excessive regulation

the market forces are being prevented from doing their thing

MI5

Seems Liam Doran is now involved in saving semi state employees from pay cuts, AND, he seems to be winning this battle :pac:

Ministers back off in semi-state pay battle

Mixed signals highlight 'faultlines' in the Cabinet

http://www.independent.ie/national-news/ministers-back-off-in-semistate-pay-battle-1975096.html

Dr Galen

i don't see Liam Doran mentioned in that piece at all?

Bogger77

thegoth wrote: »

I'd say its ALOT more than 48 when bonus and overtime are taken into account.

So you accept that the ESB are getting paid too much per unit of electricity. I know they dont set their own prices. What are they doing what that cash ? They are over paying their staff. This is a company, owned by the citizens of Ireland, which is wasting money overpaying its staff. Its that simple. I, as I shareholder, strongly object to this.

1: You are not a shareholder in the ESB, there is only one share holder, the Minister for Energy (or whatever name that dept has this week)
2: Simple maths explanations for you.
If a company spends €364,643,000 in a year on salaries for 7500 peoples salaries, then the average salary for 1 staff member for one year is 48,619.07€. That includes overtime, bonuses, shift allowances*.
Hence, average pay per employee for ESB as a group is just a tad over 48K.

As well as direct dividend payments to Gov, the tax take on 48K is quite high, as well with Employer PRSI payments, etc.



ps: * is the little bonus paid so that there's people working every day, every hour, including New years, Christmas, etc.

holdfast

dude

we'll go have a pint and let everyone catch up

Good to see things have not changes in the ESB