Lumps Of Coal

December 9, 2005
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Got Ebenezer Scrooge for a boss? You will next year.

The majority of the nation’s employees are not expected to receive higher raises and bonuses in 2006 than they did in 2005, a new survey finds. Less than one-third (29 percent) of chief financial officers polled said they will give bigger salary increases in the coming year, and just 20 percent anticipate boosting bonus amounts.

CFOs who said they expected to increase raises and bonuses in 2006 were asked by what percentage these forms of compensation would rise. The mean responses were 5 percent for raises and 7 percent for bonuses.

“Many companies may be hesitant to increase employee compensation because of other expenses impacting the business, such as rising health care and energy costs,” said Max Messmer, chairman and CEO of Robert Half International Inc., which developed the survey of more than 1,400 CFOs from a random sample of U.S. companies with 20 or more employees. “But an overly cautious approach can be detrimental, particularly as the competition for top candidates intensifies. Firms that fail to reward good performance risk losing their best talent.”

But maybe all is not Scrooged. Added Messmer, “Organizations unable to offer higher raises and bonuses should look for other ways to recognize and motivate their teams, such as offering professional development opportunities and enhancing the work environment. While employees value financial incentives, they also place great importance on their company’s corporate culture.”

  • Corporate culture is a phrase that’s often bandied about in the financial industry.

As usual, however, the banking business is in turmoil with job changes, finger-pointing, growth and takeover targets. And that’s just the surface stuff.

But the Fifth-Third-Being-Swallowed-Up rumor that resurfaces just about every year invites some pondering.

One of the more frequently mentioned banks, Wells Fargo, trades at a stock price-to-earnings ratio of 14.39 times, its stock is trading at $63 and its market capitalization is $105 billion.

Fifth Third’s price-to-earnings ratio of 16.24 times is higher than Wells Fargo’s, its stock is trading at $40 and its market capitalization is $22.4 billion.

Considering Fifth Third’s price to earnings ratio, would another bank really want to pay a premium to buy the company’s core Midwestern franchise given the region’s weak economic condition?

  • Here’s another one for Bill McKendry, the “local first” chief creative officer of Grand Rapids’ largest ad house, Hanon McKendry: Alticor has hired Chicago’s Element 79 Partners to assist with an upcoming corporate branding effort.

“We are so thrilled to have formed a partnership with Element 79,” said Tom Hall, Alticor chief brand officer in a prepared statement. “Their values of honesty, trust and respect are a perfect fit for Alticor and its history of integrity. Plus, their philosophies on partnership, creativity and quality are perfectly suited to making our future branding work successful.”

Those Chicago guys sound swell. They probably deserve the business and we can add Alitcor to the list of Grand Rapids icons (Meijer, Steelcase, etc.) shopping for creativity out-of-town.

Of course, if that’s an issue, there might be an ad agency in Fairlawn, Ohio, home of Rubbermaid Home Products, just as ticked.

  • Speaking of ticked, some of the fans at the recent MichiganStateUniversity vs. Arkansas Little Rock college hoops game at Van Andel Arena were feeling a bit peaked (and peeved) during the intermission.

As you might know, PeterSecchia and the gang arranged for a sellout at the arena, and Grand Rapids did itself proud as a sports town. Savvy fans not wanting to battle 11,000 of their closest friends for potty privileges, however, opted for the restrooms in the ground floor lobby during halftime. Imagine their surprise when told by security they’d have to hold it, because those relief sites were reserved for people with “floor seats.” (What? Was JackNicholson there?)

Isn’t Van Andel Arena a public building that was built with public dollars?

  • Here’s a little private prognosticating. MikeWashburn is leaving the superintendent’s seat at Forest Hills Public Schools. But our guess is he won’t just fade away. Watch for the educational architect to use his time to hook into the issues related to Grand Rapids Public Schools. The Kalamazoo Promise for public school children’s college scholarships has created all manner of discussion, and we wouldn’t be surprised to see the Grand Action Committee, that merry band of (very private) public do-gooders, provide a forum. Especially given all the back-room talk after the New York Times published a story on the dramatic strides made in Raleigh, N.C., student test scores after it began integrating schools economically (a formula by which no more than 40 percent of a school’s population is low income).

Grand Action will turn more of its attention toward education and no better candidate than Washburn is available to join the holy trinity of DickDeVos, JohnCanepa and DavidFrey. (OK, maybe beleaguered GRPS Superintendent BertBleke, but first he’s going to need some recovery time.)

  • Can’t decide what to give this Christmas? Try the shirt off your back.

The Grand Rapids Young Professionals, in conjunction with similar groups in Grand Haven and Holland, are collecting professional clothing that will be donated to graduates of Goodwill’s job training program who are going out on interviews in the community.

GRYP spokesperson AndreaGroom estimates that more than 1,500 young professionals between the three groups would participate. The Grand Rapids chapter “charged” one piece of clothing in lieu of admission price to its annual Christmas party last week.

All clothing will be given directly to participants and will not be sold in Goodwill’s retail stores, she said.

  • Canned: He does it every year, and this year Second Story Properties owner Sam Cummings has collected 1,430 pounds of food (to date) in bins located at all Second Story properties. The goal is 4,000 pounds of food by Dec. 16, and he’s asking everyone to pitch in.    

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