Originally Posted by
SharpestTool
Wanna bet? To think this is to think that profit sharing does not entail a cost to management. Profit sharing has nothing to do with past sacrifices or past anything. It is about the future.
Profit sharing is about future compensation, period. It entails risk, period, because the future is unknown. Profit sharing is a hedge. When the risk is that profits will runaway to the upside it is useful. It sucks big time when the risk is a falloff in profitability.
If the bankruptcy had never happened, we wouldn't have negotiated profit sharing. It was a result of a weak hand we were dealt. It is an insurance policy.
You are exactly right. I'll betcha the institutional investors are banging on Richard's desk wanting to know how he can be paying 1/4 of the company's profits out to the employees in PS. At this point it IS a liability to the company. The only saving grace is that Richard can keep digging at Parker with it.