5 ms·

I expected to read this as another '$1 a year salary' story, wherein the CEO was still _actually_ rich, but only brought in a meager 'salary', owing the rest to

by bmelton 16y ago

I expected to read this as another '$1 a year salary' story, wherein the CEO was still _actually_ rich, but only brought in a meager 'salary', owing the rest to dividends. What I got instead was a story about what seems to be a brilliant boss. He lowered his own salary along with everybody else's. He's accessible. He actually rides his planes and lets people know he's the CEO of the airline. In short, he is accessible to both his customers and employees. In the startup world this probably isn't that uncommon -- when you have a staff of four or twenty, accessibility is easy to get. Wikipedia lists Japan Air as having over 30,000 employees. This is impressive to me, however, it's worth pointing out that despite this practicality and accessibility, the article linked was written in 2009, and Japan Air filed for Chapter 11 bankruptcy last year.

link2009 16y ago
I see your point and I agree with you. Look over the article describing the bankruptcy announcement, it states that "Some 15,600 jobs are expected to be cut." That is quite damaging for a company of such degree and the family of all those employees. I think the lesson here is that it's important to be close to your employees, regardless of how rich you _can_ be.
- ryanwaggoner 16y ago
  Actually, I think the message is that it's more important to be competent than nice. Most of those laid off would have probably preferred an overpaid, aloof manager who kept the company afloat. Not saying you have to choose, of course. But being competent at management doesn't require you to be loved by all your employees.
  - Silhouette 16y ago
    This seems to be a classic example of correlation vs. causation. Airlines have been having a rough time in recent years. Against a background of people bashing them on environmental grounds and promoting alternative modes of transport, often hypocritically, they have seen major costs such as fuel going way up, their market suffering because a lot of air travel is a luxury that people aren't so willing to pay for in a depressed economy, and in many cases significant staffing problems due partly to the same economic conditions. We can't say whether Japan Air failed because of its CEO's apparently folksy style of management. For all we know, it would have gone to the wall two years earlier if he'd been claiming millions and not so aware of what was really happening from his customers' and staff's points of view.
    - ryanwaggoner 16y ago
      I didn't say anything like that. In fact, I'm arguing the same point: we can't say his folksy style had any effect on the bottom line, good or bad. I'm just saying that it's clearly not required for good management.
      - knieveltech 16y ago
        I'd say that's pretty dependent upon one's definition of "good management". Not running the company in the ground is merely acceptable. Looting the company and distancing yourself from the people that sustain your lofty position while not running the company in the ground still seems pretty crap to me compared to engaging your employees directly and keeping your consumption (read salary) in line with the rest of the company while not running said company in the ground. YMMV
patio11 16y ago
I expected to read this as another '$1 a year salary' story, wherein the CEO was still _actually_ rich, but only brought in a meager 'salary', owing the rest to dividends. Without reference to this particular CEO, since I don't know him from Adam, much has been made of Japanese CEOs being compensated modestly and it is mostly an accounting fiction. For example, the CEO at a particular Japanese company might not be able to afford a dhh-style automobile, but if he desires to drive one, one will be made available for him from the corporate fleet. He lives, like many of his employees, in company housing, but his company-provided housing is decidedly not in the dorms with the 22 year old trainees. He will, like many of his employees, spend the majority of his meals working officially or unofficially on company business, and most of these will end up on the expense account of either his firm or one of his business partners'. etc, etc Compare it to being President: you may be cash-poor by the standards of the rich, but that is not a meaningful barrier to desired consumption. Speaking of which: I recently filed my taxes in Japan. The Japanese equivalent of the Schedule C (small business tax return form) has, like the Schedule C, an entry for meals & entertainment. Mine read 0 yen. A helpful person informed me that that was anomalously low, and that, wink wink, the routine practice is to claim that the company paid for every meal because, wink wink, we all know how being a salaryman works.
- bmelton 16y ago
  I don't get the sense of that, though it may well be the case. Specifically, as they referenced that he takes the bus to work, wears suits off the rack, etc. Honestly though, I'm MUCH more impressed with the accessibility -- knocked down the walls of his office, eats lunch in the regular cafeteria, etc. I know very little of Japanese culture, but he at least gives the impression that it's sincere, and as I mentioned, my initial expectation was quite cynical. Offtopic (bearing in mind my Japan-ignorance), having an excess of meals and entertainment on your business tax returns is an invitation to be audited here in the states. You might want to speak with someone who can give you legal advice without winking. ;-)
  - patio11 16y ago
    I totally understand the bit about it being an audit flag in the US. In Japan, it is apparently considered routine practice, in the same fashion that the IRS would never question a business deduction for a subscription to the Wall Street Journal. (I edited out the identity of the person giving the helpful suggestion shortly after posting. Suffice it to say she speaks from a position of authority on the matter.)
avar 16y ago
Japan Air filed for Chapter 11 bankruptcy last year. A Japanese Airline filed for bankruptcy under the bankruptcy laws of the United States?
- bradly 16y ago
  In Japan I believe it is called "Corporate Rehabilitation", but it is very similar to U.S.'s chapter 11 status.
jaxonrice 16y ago
This story reminds me of an experience I had on a Virgin Atlantic flight between London and LA in 1999. I was flying economy class and was one of the few passengers on the flight who was awake at 4am. Richard Branson, the owner of Virgin, walked up from the front of the plane and surprised me by asking if he could sit in the empty seat next to me and chat for a few minutes about my experience with Virgin Atlantic and how it could be improved. I got the impression that he was genuinely interested in listening to my feedback and that he cared passionately about his airline. It made a huge impression on me and set the standard by which I have judged senior executives ever since.
- kareemm 16y ago
  Branson encourages people to write his head office with feedback. Back in 2002 I sent them a letter because I was frustrated with the kiosks at the Virgin Mega Stores and suggested some improvements (you'd scan the barcode on a CD and it'd pull up a 30-second samples of songs on the album that you could listen to. Good idea in concept, but the implementation was horrible.) I got a letter back several weeks later saying my feedback had been passed on to the appropriate parties and they'd get in touch. A couple weeks later I got a phone call (!) from the VP of Product of the Virgin Mega Stores thanking me for my feedback and explaining that he knew the kiosks were sub-par, but their hands were tied by licensing arrangements. I can't begin to explain how impressed I was that a) Branson's address was on the Virgin website, b) his office responded by mail to my letter, c) they passed on my feedback to the relevant party, and d) the relevant person himself called me to explain the situation and thank me for caring enough to write I was pretty damn impressed by the experience, and Virgin has been a great example of a company that focuses on great products, and customer and employee happiness as I build my company.
  - catshirt 16y ago
    fwiw, which very well may be nothing, it's funny that virgin came up as the second example, since you'd be damned to find one of those kiosks anywhere in the US now.

by bmelton 16y ago

link2009 16y ago

I see your point and I agree with you. Look over the article describing the bankruptcy announcement, it states that "Some 15,600 jobs are expected to be cut." That is quite damaging for a company of such degree and the family of all those employees. I think the lesson here is that it's important to be close to your employees, regardless of how rich you _can_ be.

ryanwaggoner 16y ago
Actually, I think the message is that it's more important to be competent than nice. Most of those laid off would have probably preferred an overpaid, aloof manager who kept the company afloat. Not saying you have to choose, of course. But being competent at management doesn't require you to be loved by all your employees.
- Silhouette 16y ago
  This seems to be a classic example of correlation vs. causation. Airlines have been having a rough time in recent years. Against a background of people bashing them on environmental grounds and promoting alternative modes of transport, often hypocritically, they have seen major costs such as fuel going way up, their market suffering because a lot of air travel is a luxury that people aren't so willing to pay for in a depressed economy, and in many cases significant staffing problems due partly to the same economic conditions. We can't say whether Japan Air failed because of its CEO's apparently folksy style of management. For all we know, it would have gone to the wall two years earlier if he'd been claiming millions and not so aware of what was really happening from his customers' and staff's points of view.
  - ryanwaggoner 16y ago
    I didn't say anything like that. In fact, I'm arguing the same point: we can't say his folksy style had any effect on the bottom line, good or bad. I'm just saying that it's clearly not required for good management.
    - knieveltech 16y ago
      I'd say that's pretty dependent upon one's definition of "good management". Not running the company in the ground is merely acceptable. Looting the company and distancing yourself from the people that sustain your lofty position while not running the company in the ground still seems pretty crap to me compared to engaging your employees directly and keeping your consumption (read salary) in line with the rest of the company while not running said company in the ground. YMMV

patio11 16y ago

I expected to read this as another '$1 a year salary' story, wherein the CEO was still _actually_ rich, but only brought in a meager 'salary', owing the rest to dividends. Without reference to this particular CEO, since I don't know him from Adam, much has been made of Japanese CEOs being compensated modestly and it is mostly an accounting fiction. For example, the CEO at a particular Japanese company might not be able to afford a dhh-style automobile, but if he desires to drive one, one will be made available for him from the corporate fleet. He lives, like many of his employees, in company housing, but his company-provided housing is decidedly not in the dorms with the 22 year old trainees. He will, like many of his employees, spend the majority of his meals working officially or unofficially on company business, and most of these will end up on the expense account of either his firm or one of his business partners'. etc, etc Compare it to being President: you may be cash-poor by the standards of the rich, but that is not a meaningful barrier to desired consumption. Speaking of which: I recently filed my taxes in Japan. The Japanese equivalent of the Schedule C (small business tax return form) has, like the Schedule C, an entry for meals & entertainment. Mine read 0 yen. A helpful person informed me that that was anomalously low, and that, wink wink, the routine practice is to claim that the company paid for every meal because, wink wink, we all know how being a salaryman works.

bmelton 16y ago
I don't get the sense of that, though it may well be the case. Specifically, as they referenced that he takes the bus to work, wears suits off the rack, etc. Honestly though, I'm MUCH more impressed with the accessibility -- knocked down the walls of his office, eats lunch in the regular cafeteria, etc. I know very little of Japanese culture, but he at least gives the impression that it's sincere, and as I mentioned, my initial expectation was quite cynical. Offtopic (bearing in mind my Japan-ignorance), having an excess of meals and entertainment on your business tax returns is an invitation to be audited here in the states. You might want to speak with someone who can give you legal advice without winking. ;-)
- patio11 16y ago
  I totally understand the bit about it being an audit flag in the US. In Japan, it is apparently considered routine practice, in the same fashion that the IRS would never question a business deduction for a subscription to the Wall Street Journal. (I edited out the identity of the person giving the helpful suggestion shortly after posting. Suffice it to say she speaks from a position of authority on the matter.)

avar 16y ago

Japan Air filed for Chapter 11 bankruptcy last year. A Japanese Airline filed for bankruptcy under the bankruptcy laws of the United States?

bradly 16y ago
In Japan I believe it is called "Corporate Rehabilitation", but it is very similar to U.S.'s chapter 11 status.

jaxonrice 16y ago

This story reminds me of an experience I had on a Virgin Atlantic flight between London and LA in 1999. I was flying economy class and was one of the few passengers on the flight who was awake at 4am. Richard Branson, the owner of Virgin, walked up from the front of the plane and surprised me by asking if he could sit in the empty seat next to me and chat for a few minutes about my experience with Virgin Atlantic and how it could be improved. I got the impression that he was genuinely interested in listening to my feedback and that he cared passionately about his airline. It made a huge impression on me and set the standard by which I have judged senior executives ever since.

kareemm 16y ago
Branson encourages people to write his head office with feedback. Back in 2002 I sent them a letter because I was frustrated with the kiosks at the Virgin Mega Stores and suggested some improvements (you'd scan the barcode on a CD and it'd pull up a 30-second samples of songs on the album that you could listen to. Good idea in concept, but the implementation was horrible.) I got a letter back several weeks later saying my feedback had been passed on to the appropriate parties and they'd get in touch. A couple weeks later I got a phone call (!) from the VP of Product of the Virgin Mega Stores thanking me for my feedback and explaining that he knew the kiosks were sub-par, but their hands were tied by licensing arrangements. I can't begin to explain how impressed I was that a) Branson's address was on the Virgin website, b) his office responded by mail to my letter, c) they passed on my feedback to the relevant party, and d) the relevant person himself called me to explain the situation and thank me for caring enough to write I was pretty damn impressed by the experience, and Virgin has been a great example of a company that focuses on great products, and customer and employee happiness as I build my company.
- catshirt 16y ago
  fwiw, which very well may be nothing, it's funny that virgin came up as the second example, since you'd be damned to find one of those kiosks anywhere in the US now.