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Booking.com gives €28m in bonuses to three top execs; Took €65m in State aid

622 points by jsiepkes 5y ago

ska 5y ago
It's going to be interesting to see analysis of various "covid response" policies in terms of their intended vs. actual consequence. I'm guessing that countries that tied corporate money to payroll somehow are going to see better impacts than those that didn't. There's also a lot of weird incentives and corner cases. Especially in countries where states/provinces/whatever have a lot of autonomy, there is a ton of variation too.
amir734jj 5y ago
WOW. That's all I have to say.
ralph84 5y ago
Directly via bailouts and indirectly via inflation, COVID was the biggest wealth transfer to the rich in history.
- isaacremuant 5y ago
  It wasn't covid. It was the policies imposed in the name of covid. Including the absolutely unnecessary lockdowns and other restrictions that very rapidly exempted the elites and those making the decisions.
- inter_netuser 5y ago
  1% loves pandemics.
  - thinkmassive 5y ago
    ...and all other forms of disaster capitalism
    - trentnix 5y ago
      disaster capitalism Taking egregious sums of state aid is crony capitalism and is market manipulation. And wherever you find egregious market manipulation, you'll almost always find government doing the steering.
      - ep103 5y ago
        disaster capitalism is a term coined by Amy Goodman to describe the efforts of the most politically influential to steer the economy towards regular crises, and then take advantage of those crises via crony capitalism
        CyberDildonics 5y ago
        That would not apply here, since this was not a financial crisis or caused by systemic long term effects of direct government action.
      - elliekelly 5y ago
        Captain Government may be at the helm, but they’re serving is at the pleasure of those contributing to their next campaign fund. If the Yacht owners want to go to Tahiti where do you think a Yacht captain is most likely to steer the ship? It’s a cause and a symptom of “crony capitalism” — a feedback loop that perpetuates and exacerbates existing inequality.
      - andrepd 5y ago
        >government is doing the steering That under capitalism those who accumulate massive amounts of wealth can use that wealth to “buy” the state institutions to do their bidding, is precisely (one of the) problems in capitalism.
        trentnix 5y ago
        One way to address that problem is to prevent "state institutions" from being so powerful as being able to do anyone's bidding.
  - akomtu 5y ago
    I remember it was mentioned in the gervais principle book: when an organization approaches its final stage, the top brass collects anything of value and jumps the ship, leaving the clueless staff. These recessions are a lot like this value extraction phase.
    - inter_netuser 5y ago
      Absolutely. Strip the country of assets and flee to a stable jurisdiction. Wonder where will the American elites flee. Maybe won't need to, guns and all.
- mminer237 5y ago
  How does inflation help the rich? Doesn't that devalue their net worth?
  - beiller 5y ago
    If everyone's bank account balance goes up by 50% uniformly, lets say one person has 100,000 and another has 10,000. After the increase they now have 150,000 and 15,000 respectively. But the low end item costs also go up due to inflation, so food now costs 50% more lets say. The thinking is that this eats into the lower bracket much more than the higher one. So inflation would increase the divide between rich and poor. I think this makes sense, interested if I am wrong here please let me know your thoughts!
    - donmcronald 5y ago
      I don't think so. Both still have the same percentage of the money, so it should be even. If a rich person thinks inflation is coming they can buy fixed assets, invest in resource companies, invest in companies that provide critical services (food supply, communications, etc.). The problem for the poor is that it's hard to invest in things that benefit from inflation, especially if you don't have any money to invest. It's unlikely the paycheck-to-paycheck wages of poor people are going to go up enough to cover any kind of increase in (ex:) housing prices. Or you have people like my parents whose (defined benefit) pensions aren't going to do well against inflation. They'll get to watch the value of their retirement income drop like a rock at the same time they've seen millionaires with "small" businesses pocket hundreds of thousands of "bailout" dollars they didn't really need. Those millionaires will be the ones creating inflation by buying up fixed assets with their free government money. My parents will at least benefit from increased value in their house. Me and the generations after me that can't afford houses and don't have many fixed assets will get screwed really badly. I can see it coming and there's not much I can do for myself :-(
    - tchalla 5y ago
      You're essentially describing the Cantillon Effect :-)
  - 5y ago
- slowhand09 5y ago
  I saw people buying firearms with stimulus checks more than anything else. I saw a couple buy 2 identical $1300 handguns at once. They were joking about the stim checks. And annoyed they'd have to wait a week to pick up their purchases.
  - ipaddr 5y ago
    Perhaps they were hedging on what direction everything was going to go. I stocked up on everything but firearms thinking water and food would probably get me first.
  - jakearmitage 5y ago
    What's the problem with purchasing safety devices during unstable times?
    - jessaustin 5y ago
      The problem, of course, was that the poors were purchasing safety.
    - daddylongstroke 5y ago
      The problem is the deeply seeded psychology of fear driven by the media. Americans are the most fearful people I think I've come across. The concept of resiliency of all kinds seems to be largely foreign here, except out in the 'sticks'.
- skocznymroczny 5y ago
  Most of the 99% are proud of being vaccinated, so they don't seem to have a problem with the situation.
  - daddylongstroke 5y ago
    Fajne imię! I agree, most of the 99% don't seem to be too disturbed by the hyperinflation. Actually, we've spent a record on durable goods last year with the handouts! Keep the machine printing! Brrrrr....
- slowhand09 5y ago
  Not rich here. Wife's company got COVID loans. They were forgiven. Company had to prove money was spent on rent, salaries, benefits. Company didn't make money on it. Employees were able to keep their jobs. No bonuses involved there.
  - aeturnum 5y ago
    The COVID relief has helped the rich in the same way that the mortgage tax deduction 'mostly' helps the rich[1]: the majority of the dollars go to aid wealthy people, despite the number of non-wealthy beneficiaries being much higher. [1] https://thehill.com/opinion/finance/358922-mortgage-interest-deduction-mostly-benefits-the-rich-end-it https://thehill.com/opinion/finance/358922-mortgage-interest...
    - Karunamon 5y ago
      That always struck me as an ass-backwards way of looking at taxes. $100 saved by someone near the poverty line is a big deal to them, $100 saved by someone making six figures is not near as much. The recent doubling of the standard deduction is probably one of the biggest (in terms of impact) tax cuts to the lower/middle earners (read: the vast majority of people) in a long time.
      - treeman79 5y ago
        Low earners don’t pay federal income tax. Bottom 50% make up 3% Top 1% paid 40% of taxes. https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income...
      - aeturnum 5y ago
        I agree that poor-er people have much higher marginal utility for $1, but I think that observation supports this critique! The 'cost' of spending $1,000,000 on a wealthy person should be measured in terms of how much utility less-wealthy recipients would get out of that money. In the same way, your example with the standard deduction also, I think, supports this critique: either standard deduction is marginal once you reach a high enough level of income, but at lower levels of income it is much, much better (and results in higher tax rebates for poor people). It's an example of a tax policy that does the reverse of the mortgage tax deduction - it becomes less proportionally beneficial at higher levels of income. P.s. I may have misread your comment, and if we are actually in agreement I apologize!
- ChrisLomont 5y ago
  >via inflation The poor tend to be net borrowers. The rich tend to be net lenders. Inflation makes the poor less in debt by lowering the real value of payback. Inflation helps borrowers.
  - fastball 5y ago
    Not sure this is true. A wealthy person might have a mortgage on a $1M home while the poor are more likely to be renting. To whit, US mortgage debt in 2020 was at $10T while the debt that the poor are more likely to have (Credit Card / Personal Loan / Auto Loan) is a combined $2.5T[1]. The wealthy are often highly leveraged in a variety of ways. Just look at some of the world's richest people – they generally fund themselves through loans taken out against their equity holdings (stocks in the case of Bezos / Musk / etc). So the ultra-wealthy like Musk are actually winning twice: once when everyone rushes to buy stocks like Tesla because they're worried about inflation and such, increasing the value of his holdings substantially. Then again when the inflation actually hits, because he is funding himself with loans, which are now easier to repay. [1] https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/ https://www.experian.com/blogs/ask-experian/research/consume...
    - gher-shyu3i 5y ago
      Yet people still think having a financial system based on usury is an acceptable idea. Quite baffling to say the least.
    - ChrisLomont 5y ago
      The vast majority of investment capital is from rich person lending. Do you think the poor are lending all the money in the world? Or is it lent from those with the capability?
  - donmcronald 5y ago
    > The poor tend to be net borrowers. Wages for the poor won't go up because they don't have any leverage in terms of negotiating. With no fixed assets and no negotiating power to demand higher wages, the value of the real payback won't change for them, but the cost of living will go up. It'll help a few people who got lucky and bought houses within the last couple of years, but the truly poor (no assets) are about to get much poorer in terms of purchasing power.
- adamrezich 5y ago
  watch out, go any further down that train of thought and you'll be a "conspiracy theorist"
- jessaustin 5y ago
  This was version 2. Version 1 was the "great recession", when several investment banks found themselves insolvent after cluelessly underwriting an overvaluation of American homes. It had been their custom to play a sort of musical chairs with overvalued assets, unloading them on clients and other victims, but eventually they forgot how that game typically ends. After a small amount of public discussion, it was decided that a certain favored subgroup of the investment banks would be bailed out by the public but that their debtors would all lose their homes. This time around, that modicum of public discussion was avoided but we all gave those who can afford teams of lobbyists and lawyers lots of money anyway. For version 3, we can expect automatic deductions from the checking accounts of the bottom half of the income bracket, with automatic credit card transactions against those without checking accounts, to be transferred directly to entertainment allowances for Bezos, Musk, Gates, Buffett, MbL, and various estranged spouses thereof. "Representative government" seems fine until one looks more closely at who is actually represented.
  - zapita 5y ago
    > “Representative government" seems fine until one looks more closely at who is actually represented. Why ruin an otherwise reasonable argument with an out-of-nowhere jab at representative democracy? If anything, without legitimate elected officials in charge, the problem would have been more acute.
    - daddylongstroke 5y ago
      Ahhh yes. The old "the-ones-who-caused-the-problems-will-fix-them-honest" routine. Never gets old, and it's been playing out for thousands of years!!! What a sale job.
  - austincheney 5y ago
    Not exactly. I happen to work for a bank. My employer was minimally directly effected by the housing market crash, but due to the intermingling that comprises the financial industry everybody was seriously hurt indirectly. They were forced to purchase, by the federal government, a major stock brokerage that was in serious trouble for pennies on the dollar and assume all their troubled assets. > Representative government" seems fine until one looks more closely at who is actually represented. When looking at current politics I find your statement incredibly strange. I used to think the Republican Party represented the wealthy and special interests (certain business interests as both major parties have their special interest priorities). That was years ago when they were the stronger and more dominant of the two US major parties, back when they had values and weren’t so hypocritical about them. But now they seemed to have strangely thrown away dominance for a failed bet on populism to energize some new core constituents to the disgust of everyone else. I have trouble finding who is actually represented by that, but then I guess a lot of people have that trouble which explains that parties atrophy.
- tlogan 5y ago
  And this is one reason that we do not need to worry about inflation. All the money given to “not so wealthy” is already spent and gone.
- coliveira 5y ago
  The combined indirect result of the housing crisis and the COVID crisis is that the upper class doesn't fear recessions anymore. They now have the bail out machine very well tested and oiled. At any sign of recessions they will force governments to bail out their bad investments and let the population die of starvation if necessary.
PragmaticPulp 5y ago
The article is thin on details. Does the 65 million Euros of state aid need to be repaid? Or was it free money from the government with no expectation of repayment?
- oneplane 5y ago
  It was a deal where companies wouldn't discard the workforce in exchange for money. It didn't come with a ban on bonuses, but it did come with a bunch of middle-aged white men frowning at different middle-aged white men for not pausing the bonus culture.
  - Egidius 5y ago
    While booking in fact got rid of 25% of their workforce
    - oneplane 5y ago
      Oh yeah, totally forgot about that. I guess it's better than purging 80% or whatever they had in mind.
    - polynomial 5y ago
      this is kind of amazing given it appears terms of the aid were literally not to do this. and yet smh
  - ErikVandeWater 5y ago
    What does age/race/gender have to do with this?
    - sebmellen 5y ago
      If you replace "middle-aged white man" with "soulless corporate stooge" nearly anywhere this phrase is used, the replacement term will fit. The term "middle-aged white man" is a caricature of the extremely wealthy and powerful, even though (I believe) it is a misleading and inaccurate portrayal.
hathym 5y ago
My company is buying back millions of its own stock, giving 0€ raise to employees.
- swiley 5y ago
  Part of me wonders if that's one way to give bonuses to employees while avoiding a tax penalty. Most companies give employees stock via various mechanisms so you end up throwing money away by avoiding it.
  - shkkmo 5y ago
    The percentage of a companies stock that is owned by employees is rarely big enough to make this in anyway close to efficient.
  - qixxiq 5y ago
    Yes, but stock ownership isn't even and so it'll again primarily go to the CEO/etc (while reducing their tax impact). The employees earning minimum wage, and who likely don't hold any stock, won't see any of it.
sparkling 5y ago
These "state aids" are coming from the mandatory unemployment insurance scheme that both employees and employers (in this case, Booking) are forced to pay in. It is silly to now blame companies and employees now making use of the insurance that they paid in for years. Imagine crashing your car and the insurance is refusing to pay you, arguing "but you just bought a second car! you don't really need the insurance money!". You can claim it is morally wrong, ultimately the government set the conditions for these programs. Also one thing to keep in mind: we don't know the exact conditions of these bonuses, they might be simply legally required to pay out the bonuses.
- nielsbot 5y ago
  From the article: The bonuses were paid because they were "concerned they could otherwise lose the three top executives."
  - acomjean 5y ago
    They always say that. its not a great time for executives to look for new work. And in general pay has little to do with performance.
- yunohn 5y ago
  That’s not how bonuses should work. Plus, if there’s no money to pay other employees, they shouldn’t pay executives.
savant_penguin 5y ago
The real error here is public money being given to private companies. Let them break Fund people, not companies
- bazooka_penguin 5y ago
  Lock down the economy, kill small businesses, hand out printed money like candy to big corporations. Nothing suspicious going on...
- dalbasal 5y ago
  It's actually quite shocking how, when the primary idea is "dump money into the economy," giving the money to people instead of banks or firms is so controversial. It's more socialist and more capitalist, if you believe in that sort of thing.
  - deathcalibur 5y ago
    I'm not saying you're wrong when I say consider the following: if every individual had a bunch of free money and decided to not work, then the next day they drive to the store and there is no one working... what do they do? Didn't you just cause a ton of inflation? At the end of the day, money doesn't solve problems. Work being done solves problems. How that should affect policy... I have no idea but I can see both sides of the problem.
    - toxik 5y ago
      It would have to be A LOT of money for people to stop going to their jobs. In a more realistic scenario: Maybe some people would quit their jobs because they gained some independence. Is that bad?
      - deathcalibur 5y ago
        The problem isn't really people quitting actually because like you said, that could be good. It's more like the business can't pay to stay open because there aren't enough customers to cover the variable costs. So now the business is closed and you have no where to spend your money... This realistically only affects small businesses like your local grocery store or whatever. Once the pandemic lifts, all that cheap property gets bought up by the Walmarts of the world and the concentration of power to the top 1% continues. Right? I could totally be wrong here.
primitivesuave 5y ago
Same thing is happening here in the US. For example, Trump's law firm Kasowitz Benson Torres took a $10m forgivable government loan for COVID relief [1] despite earning a profit of over $2m per partner in the preceding years [2]. 1. https://pppwatch.com/loan/9581937109 https://pppwatch.com/loan/9581937109 2. https://en.wikipedia.org/wiki/Kasowitz_Benson_Torres https://en.wikipedia.org/wiki/Kasowitz_Benson_Torres
- kaliali 5y ago
  Blame the lawmakers who wrote and voted on the laws and rules.
nostromo 5y ago
I'm surprised anyone is surprised. Here in the US we've spent several trillion dollars on Covid relief so far, and there's more to come. When you're dealing with a torrent of printed cash of this magnitude, there's of course going to be a lot of it that ends up in the wrong hands for the wrong reasons.
- TheRealPomax 5y ago
  No one would be surprised if this was about the US, but it's that "euro" symbol that makes it surprising.
  - dalbasal 5y ago
    Is it? European/Dutch & US rhetoric can be quite different... but the actual policies are not, at least not in a sense relevant to this issue. In fact, the US cut people a bigger piece of the covid relief money than did most european countries.
    - e17 5y ago
      The US has even sent like $3k straight into the accounts of every citizen over the course of the pandemic! As far as I'm aware no other major country has done helicopter money like thia
      - tick_tock_tick 5y ago
        Much more than that if you were unemployed.
      - julienb_sea 5y ago
        The US money only went to households making below a certain threshold. Most other countries dumped heavily into their unemployment programs, sometimes funding full salaries for up to a fourth of the country over what is now looking like a 24 month period of time (see France).
      - icoder 5y ago
hugoromano 5y ago
Stop using marketplaces and book directly, these companies have no risks and take 16% to 30% commissions. If consumers start booking directly, recovery from the pandemic will be much faster.
- camillomiller 5y ago
  Any “solution” to the problem of excessive power of platforms that is based on the “individually do the harder thing” is bound to miserably fail. I think this kind of fallacy should have a name by now.
  - kristjansson 5y ago
    My shorthand for all sorts of loosely related lazy thinking like that is “just skate better”[0]. Applies individually and collectively. [0]: https://youtu.be/jE494P5gQaY https://youtu.be/jE494P5gQaY
- mschuster91 5y ago
  > Stop using marketplaces and book directly Easier said than done if you want to pay with anything else than cash. Or if you want at least a somewhat functioning website where you can see if the venue is actually available and do booking.
  - hugoromano 5y ago
    I know it is hard, but I have done it and I am a Revenue Manager in hospitality and a tours company. You have to be strong, it is a long process where you get repeat customers and friends of customers. A small loyalty program, best protection if your customers deals directly. one on one relationship but it works.
- compscistd 5y ago
  Some perspective from someone who has worked in hospitality: Some brands have fought back in creative ways. An essential part of being listed on Booking or Expedia is to agree to never advertise lower prices anywhere else, including your own website. That means you can share a $100/night rate on your own brand's site (with no commission) and you can't tell Booking or Expedia to show rates over $100. Thus, users have no advantage in going to a hotel's own site, which only shows their own brand's hotels. Expedia/Booking on the other hand show you all the hotels in the area and you can be confident in price-shopping (the one exception is loyalty points, but if you're a price-conscious, non brand-loyal customer, that won't matter to you). Worse, competing hotels can get better visibility by sharing even lower rates and promotions on these aggregators, and it becomes a race to the bottom, really hurting hotels long-term just for visibility. Choice Hotels had an interesting response a couple years ago: they show a "member-only rate" on their website. In the above scenario, technically, their public rate is $100 so Booking would take around $20 leaving $80 for the hotel. But Choice might also show $93 as an option on their website only for members (which is free to join, only takes an email/password). This way, technically their members-only rate isn't being advertised for just anyone so they don't run afoul of their Booking/Expedia agreements while only losing $7 as opposed to $20. Last I checked, Booking and Expedia didn't like this and they docked Choice Hotel visibility in their searches because even if it didn't run afoul of the agreement, they still have discretion over their search ranking. These aggregators don't need to disappear. They just need to lose some of their leverage over hotels. If all hotel brands banded together to offer their own "members-only" rate and customers became aware of what's happening, I'm sure it would really help out hotels long term.
ErikVandeWater 5y ago
It's interesting the CFO got more than 3x the CEO, and more than 2x CEO + VP. Does anyone know the reasoning behind that? It seems a bit shady to me in general for a CFO to be paid large performance bonuses.
- Finnucane 5y ago
  CFO writes the checks?
- vmception 5y ago
  The quartermaster runs the show on a pirate ship. The captain gets all the fanfare.
- papito 5y ago
  The CEO and the VP get the taste of the wig to not make much noise.
  - nielsbot 5y ago
    "taste of the wig"? I don't know that saying.. is it "wine"?
    - ska 5y ago
      I suspect a typo for "vig", short for "vigorish".
      - nielsbot 5y ago
        Cheers. https://en.wiktionary.org/wiki/vigorish https://en.wiktionary.org/wiki/vigorish
- ska 5y ago
  For the most part, C level comp of this type is defined ahead of time with the board, and based on formulas/targets that are often tied pretty closely to job function. Given that; it's not a big stretch to see how income like this ("for nothing") might factor into CFO far more than the others.
sebmellen 5y ago
In the article, it's mentioned that they took €100m in state aid — even more egregious than the mere €65m they took from the Netherlands alone. And that, while Booking.com gets discounted tax rates and strong-arms the Dutch government to pay even less through an "innovation box" [0]. Not good at all. > In 2018 alone, the company received a tax discount of $435 million in the Netherlands, or about €385 million. Thanks to this bait from the state, not only will Booking’s headquarters remain in the Netherlands, but all income generated worldwide by the company will immediately flow to the Netherlands before being taxed elsewhere. [0]: https://happyhotelier.com/2020/04/18/booking-com/ https://happyhotelier.com/2020/04/18/booking-com/
GordonS 5y ago
If we're really going to insist on bailing out private companies (rather than letting them fail and using the money to help those left without work) - then surely these bailouts should come with rules that prevent the money from basically being embezzled by top management?
sdeframond 5y ago
I know at least one French consulting company did the same (Amaris). They basically gave the benefits they made from state aid straight to their shareholders. And at the same time they laid people off. My guess is: most companies who could do this did. No conspiracy, just plain greed.
kaliali 5y ago
Well blame the politicians who left loopholes in the laws to be exploited. Or blame yourselves for falling for the same stupid trick over and over. If everything they did was legal and by the book you shouldn't be blaming them, you should blame the lawmakers that allowed it to happen. There are no excuses when you write and vote on laws for millions of people to abide by.
Krull 5y ago
If it didn't come with string attached why are people mad at the companies? Shouldn't they either be mad with their representatives who allowed such things?
victordg 5y ago
"2.8 million euros went to Peter Millones, the vice president. Nearly 20 million euros, mostly in shares, went to CFO David Goulden" Goulden & Millones. You could not make this shit up.
sjaak 5y ago
This needs a trigger warning for the Dutch people reading this site. Shameless. Totally shameless.
- jtwaleson 5y ago
  It's not like we're proud of booking. Dark patterns in their product, horrible tech stack. As a software engineer there you'll get paid 30% over market value to work on Perl in a dysfunctional org. This bonus round is just another stain on an already bad reputation. Their CMO tried to start some nice PR recently, must be pretty mad now :)
necovek 5y ago
It seems that most of that €28M was "mostly" paid out in "shares": iow, minimal cash was transferred. That may make it both better or worse for everyone else at Booking.com (if shares go back in value as travel gets reinstated, it will effectively be more than that), but the aid itself was not used to cover these bonuses. Basically, Booking.com shareholders have redistributed their shares to a couple of employees. If, otoh, Booking.com goes bust, the value of these bonuses would plummet. If they attempted to cash in, it's likely value would go down too. Not going into the moral background of this, but the title and comments here were misleading to me.
- shkkmo 5y ago
  The reason why Booking.com had no money and needed a bailout is because they spent billions on stock buybacks. So when a company that does lots of buy backs later issues stock to pay bonuses, they might as well be directly using cash from the bailout. Edit: For concrete numbers, Booking.com spent 5.5 BILLION on stock buybacks in the first half of 2019.
  - necovek 5y ago
    Buybacks are not mentioned in this article, and you quote a number from 2019, which is, to the best of my knowledge, pre-pandemic. If you are saying that they foresaw the pandemic and government grants, well... Now, I wouldn't be surprised that they were doing that even in 2020, considering they were also taking out $3B in loans (in addition to $100M of subsidies) to maintain the share value or reinvesting in themselves when others had lower trust in them, but when all of these numbers are stacked together, this article title is obviously click-baiting ("Top execs receive €25M of stocks while company borrows €3B and gets €100M in grants" is not something too much fuss will be raised about). The bigger problem IMO is the regular subsidies they receive for "innovating" (somebody here brought up a figure of >$400M of tax subsidies a year). I do agree that top executive remuneration is commonly out of hand, but I think that applies even to "regular folk": I find it unfair that my programming salary is like 7x the average salary (10x the median) in my "developing world" country. Both of those problems equally need to be fixed. While I may be providing suitably more economic benefit to my employer, I am not "worth" that much more: the incentives and values are messed up somewhere.
Ekaros 5y ago
28M bonuses on after probably worst year in their history? How can the system be this broken?
forgithubs 5y ago
And yet, people still vote for the same kind of politicians. I don't blame the execs, I would have done the same.
varispeed 5y ago
There needs to be done something about situations where companies pay minimum wage and at the same time register millions or billions in profits (and then making artificial loss while moving money offshore). It's controversial, but I think minimum wage should be directly tied to a given company revenue.
Jiocus 5y ago
The title is almost underwhelming in severity (which is a refreshing break from sensationalistic headlines), “[€28m in bonuses] even after taking three billion euros in loans last year, and 100 million euros in State aid including 65 million from the Netherlands. The company also let go of thousands of people during the coronavirus pandemic.” Booking.com isn't alone engaging in these practices. Many corporations seem to defend these payouts, by suggesting that these executives have gracefully managed the organisation during the pandemic distress. Such statements aren't very reassuring, because they feel more like sound bites of opinion, rather than arguments that can be debated and examined. How many jobs could they have saved with 28 million euros?
- donmcronald 5y ago
  IMHO the aid should have been loans only and executive bonuses should have gone to the government as collateral. If the company pays back the loan, the executives get their bonus.
  - boruto 5y ago
    I have no horse in this race but intrigued by one sided comments here. Wouldn't people just be laid off of if govt did not give 65 mil to booking as benifits.(I assume this benifit is similar to short term work which is present in Germany). At the same time 25m is stock grants. So I feel both cannot be compared. If the government says you get no aid, Wouldn't company just lay them off? From what little I understand, In EU, govt pays a part of salary for employees to prevent them from getting laid off
- deleted 5y ago
  [deleted]
- fruityrudy 5y ago
  I think people make the mistake of thinking that the people who get bonuses are easily replaceable. The executive market of people who have experience at these kinds of levels is extremely thin. Your company needs to be attractive to this high echelon of talent. That means keeping a good record of treatment to executives. I think the thought of: “just pay them less or they can leave” is pretty common. But it’s just not easy to recruit at this level and the responsibility is huge. There is a slight PR angle to avoid looking greedy, but its moreso just the nature of the talent market at this level.
__turbobrew__ 5y ago
Covid has got me thinking about the government’s role in social welfare. Providing social welfare through money allows for people to misallocate the money or skim off the top of the money. For the vast majority of people their covid stimulation money did not go into their pockets, it went to their landlord or their mortgage holder resulting in a massive wealth transfer from public funds to banks and those who own land. I think the government should directly supply the basic needs of its citizens instead of using money as an intermediary for supplying social welfare. Money is only a means to an end for obtaining the basic necessities to live: you cannot eat a dollar bill for nutrition or sleep under a dollar bill for shelter. Government provided housing and food should be available to any citizen — no questions asked. At that point you can get rid of all welfare programs since the government is directly supplying the basic necessities for those in need. People would still be incentivized to work in order to obtain luxuries which are not supplied by the government: a private house, travelling, a car, etc. Stories like this further affirm that handing out money is not a good way for the government to provide welfare.
- freetanga 5y ago
  Five minutes later you have contracts for 5 dollar bananas and 4 dollar apples in every government… I like the idea but I much rather trust individuals (some of which will misuse funds) than politicians.
- hervature 5y ago
  How much food and what quality? Do I get to ask for tomahawk steaks every meal and an extra one to bring home to my dog? Is everyone entitled to an avocado or just those that live close to an avocado farm? There is no easy answer to this and you bet a government mandated system would be heavily lobbied to include/exclude certain things. For housing, do you get to decide where you live? Or does the government set up a massive new settlement of block housing in the cheapest part of the country? Do I get to ask for an apartment close to my family or do they just add me to the next unit available? We can argue about how many funds should be directed to certain programs, but SNAP and no taxes on food essentially is what you are suggesting while allowing for individual choice. Same for housing. The US basically gives your first house away for free which is part of the reason housing is so expensive.
ThePhysicist 5y ago
I stopped using them around two years ago when I was finally fed up with the increasing amount of dark patterns and gaslighting they did on their site. The reviews also became more and more inflated, I stayed at places with a 8.9 rating that were really shabby and subpar. The straw that broke the camel's back was when I booked a room at a hotel that had great reviews and lovely photographs, only to come to a place that was in the middle of being remodeled, with torn down walls and entry through a construction site. Also, most hotels will actually allow you to book rooms at lower prices and with less severe cancellation policies when calling them directly.
- jiofih 5y ago
  The rating goes from 8 to 10 in practice, so 8.9 is like a 5-7 :)
Shadonototro 5y ago
why would anyone want to go to work everyday and pay taxes, when things like this can; and happen?
knuthsat 5y ago
I'm not sure if I just can't find this information or if people exploiting government aid are just silent about it. These things happen because there are people who are trained to exploit these situations. But there are definitely levels to it. One way to do it is to just start a bunch of projects that will fail in countries that cannot meet their EU funds quota. https://cohesiondata.ec.europa.eu/overview https://cohesiondata.ec.europa.eu/overview You look at the data here. Figure out which EU countries can't find enough validly looking projects to get the funds. Go to that country with some initial funding and start legitimate looking business that will be funded by EU (mostly). Create legitimate expenses, even though the business will never be profitable and leech the EU funds through your personal accounts at some non-suspicious rate. Involving more players makes everything look more legitimate and when things fail, it's just how capitalism works. You can spend decades leeching on the money. On several occasions I met some fairly competent looking aliens and eventually realized this was the pattern that they wanted to exploit. These things are also done on a personal level (for example, a psychologist wants to open a practice that will work with groups of children and the project is well-written, costs are well defined and EU gives most of the money and the person just does what they described at a lower cost - spending the money on services that will indirectly make the individual richer). Another example is non-profits in EU. Small and large, they just suck out so much money, do the things they say will do, but the costs trickle down to the executives through various channels (for example, you can hire individuals to educate your employees but they charge you for fictional stuff and you collect the spent funds through some other way).
jVinc 5y ago
The base position taken in some countries of not providing bailouts, or bailouts above a certain limit, to companies who carried out stock buybacks or issued dividends was fantastic in my opinion, because it makes situations like this extremely bad for the company. Of cause a company would want to give huge bonuses to execs who manage to pull in a huge amount of money from the state, that's great for the company. Why should a company care if executives are being rewarded or are being selfish if it also benefits the company and owners overall? But with the exception to the aid, that would only be possible if the same execs brutally punished the stock owners, which would obviously put them in bad light for being selfish and not just doing good for the company.
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dbg31415 5y ago
Likely bonus criteria were set up in advance, but governments handing companies money certainly didn't hurt. Nor did having the people who run the company choose to award themselves bonuses. But look... end of the day here, if you give money to businesses don't expect the people running those businesses to do anything that isn't selfish with the money. If you give a bum on the street $5, he's going to spend that money on himself. If you give a CEO $5M, he's going to spend that money on himself too. I don't see why any sane person would expect anything different. Moral of the store is don't give money to people... not bums on the street, or CEOs. Just don't do it. You'll be let down every time.
Krisjohn 5y ago
When the poor receive benefits, some people get upset if they buy iPhones or big screen TVs. This is the first time the rich have experienced the same disapproval. I bet they're really surprised.
coliveira 5y ago
This is what we, in popular language, call a scam.
matthewtovbin 5y ago
They'd better spend this money to refund the customers for missed flight/hotel reservations in 2020/2021.
doingmyting 5y ago
Just another case of privatizing gains and socializing losses. A tale as old as America itself.
semilattice 5y ago
My view is that a system of government, where material advantages are based on quality of legal representation -- is doomed to become non-representative. The case in article is just an example of it. That means, in short, wealthy (corporations or individuals) can afford good legal representation --therefore they will necessarily bias the case law. And case law, will necessary, bias the subsequent judicial decisions. So a judicial system biased towards judging in favor of more expensive legal representation, is really the main reason why corporations become larger, why they create their own system of rules, that 'floats' on top of the system of rules for the mere mortal. --- We often have a dialog and an argument about size of government, vs size of corporations, vs individual freedoms and so on. But really what we first must recognize is that manipulation, disinformation and biases in the judicial systems must be eliminated. Basically we have to remove information manipulation and judicial selectivity out of the society. Then argue about other stuff. A step in the right direction -- would be to assign legal representation to all sides involved in a dispute (or in a criminal case) -- from some sort of a pool (based on say some standardize algorithm). This way in a dispute between Alphabet and a Joe Shmo would have equal legal representation. Overtime, this will slowly change case law, and outcomes of legal disputes -- towards fairness. Some might ask: would you do the same with Financial advisors, Doctors, University professors ? I would say no, because they do not impact the fairness of judicial system. Having said that, I do think that Job applications must hide (not include) what University an applicant had attended... but that's discussion for another post...
hrbf 5y ago
Lately, every time I read something like this, I think: if you build/maintain a system where such behavior is possible or even incentivized, you will get more of the same behavior. If you want this to change, at the very minimum, crooks in leadership positions need to be socially outcast, given a harsh prison sentence, their wealth confiscated and their legacies dismantled. Essentially, there need to be consequences. They need to lose what they care most about: their status, freedom and wealth. From there, give them a clean slate to work on earning our trust again, to rehabilitate, the hard way. You know, like every convicted criminal should have the chance to.
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stunt 5y ago
Every crisis is an opportunity IF you have business man's instinct.

622 points by jsiepkes 5y ago

ska 5y ago

It's going to be interesting to see analysis of various "covid response" policies in terms of their intended vs. actual consequence. I'm guessing that countries that tied corporate money to payroll somehow are going to see better impacts than those that didn't. There's also a lot of weird incentives and corner cases. Especially in countries where states/provinces/whatever have a lot of autonomy, there is a ton of variation too.

amir734jj 5y ago

WOW. That's all I have to say.

ralph84 5y ago

Directly via bailouts and indirectly via inflation, COVID was the biggest wealth transfer to the rich in history.

isaacremuant 5y ago
It wasn't covid. It was the policies imposed in the name of covid. Including the absolutely unnecessary lockdowns and other restrictions that very rapidly exempted the elites and those making the decisions.
inter_netuser 5y ago
1% loves pandemics.
- thinkmassive 5y ago
  ...and all other forms of disaster capitalism
  - trentnix 5y ago
    disaster capitalism Taking egregious sums of state aid is crony capitalism and is market manipulation. And wherever you find egregious market manipulation, you'll almost always find government doing the steering.
    - ep103 5y ago
      disaster capitalism is a term coined by Amy Goodman to describe the efforts of the most politically influential to steer the economy towards regular crises, and then take advantage of those crises via crony capitalism
      - CyberDildonics 5y ago
        That would not apply here, since this was not a financial crisis or caused by systemic long term effects of direct government action.
    - elliekelly 5y ago
      Captain Government may be at the helm, but they’re serving is at the pleasure of those contributing to their next campaign fund. If the Yacht owners want to go to Tahiti where do you think a Yacht captain is most likely to steer the ship? It’s a cause and a symptom of “crony capitalism” — a feedback loop that perpetuates and exacerbates existing inequality.
    - andrepd 5y ago
      >government is doing the steering That under capitalism those who accumulate massive amounts of wealth can use that wealth to “buy” the state institutions to do their bidding, is precisely (one of the) problems in capitalism.
      - trentnix 5y ago
        One way to address that problem is to prevent "state institutions" from being so powerful as being able to do anyone's bidding.
- akomtu 5y ago
  I remember it was mentioned in the gervais principle book: when an organization approaches its final stage, the top brass collects anything of value and jumps the ship, leaving the clueless staff. These recessions are a lot like this value extraction phase.
  - inter_netuser 5y ago
    Absolutely. Strip the country of assets and flee to a stable jurisdiction. Wonder where will the American elites flee. Maybe won't need to, guns and all.
mminer237 5y ago
How does inflation help the rich? Doesn't that devalue their net worth?
- beiller 5y ago
  If everyone's bank account balance goes up by 50% uniformly, lets say one person has 100,000 and another has 10,000. After the increase they now have 150,000 and 15,000 respectively. But the low end item costs also go up due to inflation, so food now costs 50% more lets say. The thinking is that this eats into the lower bracket much more than the higher one. So inflation would increase the divide between rich and poor. I think this makes sense, interested if I am wrong here please let me know your thoughts!
  - donmcronald 5y ago
    I don't think so. Both still have the same percentage of the money, so it should be even. If a rich person thinks inflation is coming they can buy fixed assets, invest in resource companies, invest in companies that provide critical services (food supply, communications, etc.). The problem for the poor is that it's hard to invest in things that benefit from inflation, especially if you don't have any money to invest. It's unlikely the paycheck-to-paycheck wages of poor people are going to go up enough to cover any kind of increase in (ex:) housing prices. Or you have people like my parents whose (defined benefit) pensions aren't going to do well against inflation. They'll get to watch the value of their retirement income drop like a rock at the same time they've seen millionaires with "small" businesses pocket hundreds of thousands of "bailout" dollars they didn't really need. Those millionaires will be the ones creating inflation by buying up fixed assets with their free government money. My parents will at least benefit from increased value in their house. Me and the generations after me that can't afford houses and don't have many fixed assets will get screwed really badly. I can see it coming and there's not much I can do for myself :-(
  - tchalla 5y ago
    You're essentially describing the Cantillon Effect :-)
- 5y ago
slowhand09 5y ago
I saw people buying firearms with stimulus checks more than anything else. I saw a couple buy 2 identical $1300 handguns at once. They were joking about the stim checks. And annoyed they'd have to wait a week to pick up their purchases.
- ipaddr 5y ago
  Perhaps they were hedging on what direction everything was going to go. I stocked up on everything but firearms thinking water and food would probably get me first.
- jakearmitage 5y ago
  What's the problem with purchasing safety devices during unstable times?
  - jessaustin 5y ago
    The problem, of course, was that the poors were purchasing safety.
  - daddylongstroke 5y ago
    The problem is the deeply seeded psychology of fear driven by the media. Americans are the most fearful people I think I've come across. The concept of resiliency of all kinds seems to be largely foreign here, except out in the 'sticks'.
skocznymroczny 5y ago
Most of the 99% are proud of being vaccinated, so they don't seem to have a problem with the situation.
- daddylongstroke 5y ago
  Fajne imię! I agree, most of the 99% don't seem to be too disturbed by the hyperinflation. Actually, we've spent a record on durable goods last year with the handouts! Keep the machine printing! Brrrrr....
slowhand09 5y ago
Not rich here. Wife's company got COVID loans. They were forgiven. Company had to prove money was spent on rent, salaries, benefits. Company didn't make money on it. Employees were able to keep their jobs. No bonuses involved there.
- aeturnum 5y ago
  The COVID relief has helped the rich in the same way that the mortgage tax deduction 'mostly' helps the rich[1]: the majority of the dollars go to aid wealthy people, despite the number of non-wealthy beneficiaries being much higher. [1] https://thehill.com/opinion/finance/358922-mortgage-interest-deduction-mostly-benefits-the-rich-end-it https://thehill.com/opinion/finance/358922-mortgage-interest...
  - Karunamon 5y ago
    That always struck me as an ass-backwards way of looking at taxes. $100 saved by someone near the poverty line is a big deal to them, $100 saved by someone making six figures is not near as much. The recent doubling of the standard deduction is probably one of the biggest (in terms of impact) tax cuts to the lower/middle earners (read: the vast majority of people) in a long time.
    - treeman79 5y ago
      Low earners don’t pay federal income tax. Bottom 50% make up 3% Top 1% paid 40% of taxes. https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income...
    - aeturnum 5y ago
      I agree that poor-er people have much higher marginal utility for $1, but I think that observation supports this critique! The 'cost' of spending $1,000,000 on a wealthy person should be measured in terms of how much utility less-wealthy recipients would get out of that money. In the same way, your example with the standard deduction also, I think, supports this critique: either standard deduction is marginal once you reach a high enough level of income, but at lower levels of income it is much, much better (and results in higher tax rebates for poor people). It's an example of a tax policy that does the reverse of the mortgage tax deduction - it becomes less proportionally beneficial at higher levels of income. P.s. I may have misread your comment, and if we are actually in agreement I apologize!
ChrisLomont 5y ago
>via inflation The poor tend to be net borrowers. The rich tend to be net lenders. Inflation makes the poor less in debt by lowering the real value of payback. Inflation helps borrowers.
- fastball 5y ago
  Not sure this is true. A wealthy person might have a mortgage on a $1M home while the poor are more likely to be renting. To whit, US mortgage debt in 2020 was at $10T while the debt that the poor are more likely to have (Credit Card / Personal Loan / Auto Loan) is a combined $2.5T[1]. The wealthy are often highly leveraged in a variety of ways. Just look at some of the world's richest people – they generally fund themselves through loans taken out against their equity holdings (stocks in the case of Bezos / Musk / etc). So the ultra-wealthy like Musk are actually winning twice: once when everyone rushes to buy stocks like Tesla because they're worried about inflation and such, increasing the value of his holdings substantially. Then again when the inflation actually hits, because he is funding himself with loans, which are now easier to repay. [1] https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/ https://www.experian.com/blogs/ask-experian/research/consume...
  - gher-shyu3i 5y ago
    Yet people still think having a financial system based on usury is an acceptable idea. Quite baffling to say the least.
  - ChrisLomont 5y ago
    The vast majority of investment capital is from rich person lending. Do you think the poor are lending all the money in the world? Or is it lent from those with the capability?
- donmcronald 5y ago
  > The poor tend to be net borrowers. Wages for the poor won't go up because they don't have any leverage in terms of negotiating. With no fixed assets and no negotiating power to demand higher wages, the value of the real payback won't change for them, but the cost of living will go up. It'll help a few people who got lucky and bought houses within the last couple of years, but the truly poor (no assets) are about to get much poorer in terms of purchasing power.
adamrezich 5y ago
watch out, go any further down that train of thought and you'll be a "conspiracy theorist"
jessaustin 5y ago
This was version 2. Version 1 was the "great recession", when several investment banks found themselves insolvent after cluelessly underwriting an overvaluation of American homes. It had been their custom to play a sort of musical chairs with overvalued assets, unloading them on clients and other victims, but eventually they forgot how that game typically ends. After a small amount of public discussion, it was decided that a certain favored subgroup of the investment banks would be bailed out by the public but that their debtors would all lose their homes. This time around, that modicum of public discussion was avoided but we all gave those who can afford teams of lobbyists and lawyers lots of money anyway. For version 3, we can expect automatic deductions from the checking accounts of the bottom half of the income bracket, with automatic credit card transactions against those without checking accounts, to be transferred directly to entertainment allowances for Bezos, Musk, Gates, Buffett, MbL, and various estranged spouses thereof. "Representative government" seems fine until one looks more closely at who is actually represented.
- zapita 5y ago
  > “Representative government" seems fine until one looks more closely at who is actually represented. Why ruin an otherwise reasonable argument with an out-of-nowhere jab at representative democracy? If anything, without legitimate elected officials in charge, the problem would have been more acute.
  - daddylongstroke 5y ago
    Ahhh yes. The old "the-ones-who-caused-the-problems-will-fix-them-honest" routine. Never gets old, and it's been playing out for thousands of years!!! What a sale job.
- austincheney 5y ago
  Not exactly. I happen to work for a bank. My employer was minimally directly effected by the housing market crash, but due to the intermingling that comprises the financial industry everybody was seriously hurt indirectly. They were forced to purchase, by the federal government, a major stock brokerage that was in serious trouble for pennies on the dollar and assume all their troubled assets. > Representative government" seems fine until one looks more closely at who is actually represented. When looking at current politics I find your statement incredibly strange. I used to think the Republican Party represented the wealthy and special interests (certain business interests as both major parties have their special interest priorities). That was years ago when they were the stronger and more dominant of the two US major parties, back when they had values and weren’t so hypocritical about them. But now they seemed to have strangely thrown away dominance for a failed bet on populism to energize some new core constituents to the disgust of everyone else. I have trouble finding who is actually represented by that, but then I guess a lot of people have that trouble which explains that parties atrophy.
tlogan 5y ago
And this is one reason that we do not need to worry about inflation. All the money given to “not so wealthy” is already spent and gone.
coliveira 5y ago
The combined indirect result of the housing crisis and the COVID crisis is that the upper class doesn't fear recessions anymore. They now have the bail out machine very well tested and oiled. At any sign of recessions they will force governments to bail out their bad investments and let the population die of starvation if necessary.

PragmaticPulp 5y ago

The article is thin on details. Does the 65 million Euros of state aid need to be repaid? Or was it free money from the government with no expectation of repayment?

oneplane 5y ago
It was a deal where companies wouldn't discard the workforce in exchange for money. It didn't come with a ban on bonuses, but it did come with a bunch of middle-aged white men frowning at different middle-aged white men for not pausing the bonus culture.
- Egidius 5y ago
  While booking in fact got rid of 25% of their workforce
  - oneplane 5y ago
    Oh yeah, totally forgot about that. I guess it's better than purging 80% or whatever they had in mind.
  - polynomial 5y ago
    this is kind of amazing given it appears terms of the aid were literally not to do this. and yet smh
- ErikVandeWater 5y ago
  What does age/race/gender have to do with this?
  - sebmellen 5y ago
    If you replace "middle-aged white man" with "soulless corporate stooge" nearly anywhere this phrase is used, the replacement term will fit. The term "middle-aged white man" is a caricature of the extremely wealthy and powerful, even though (I believe) it is a misleading and inaccurate portrayal.

hathym 5y ago

My company is buying back millions of its own stock, giving 0€ raise to employees.

swiley 5y ago
Part of me wonders if that's one way to give bonuses to employees while avoiding a tax penalty. Most companies give employees stock via various mechanisms so you end up throwing money away by avoiding it.
- shkkmo 5y ago
  The percentage of a companies stock that is owned by employees is rarely big enough to make this in anyway close to efficient.
- qixxiq 5y ago
  Yes, but stock ownership isn't even and so it'll again primarily go to the CEO/etc (while reducing their tax impact). The employees earning minimum wage, and who likely don't hold any stock, won't see any of it.

sparkling 5y ago

These "state aids" are coming from the mandatory unemployment insurance scheme that both employees and employers (in this case, Booking) are forced to pay in. It is silly to now blame companies and employees now making use of the insurance that they paid in for years. Imagine crashing your car and the insurance is refusing to pay you, arguing "but you just bought a second car! you don't really need the insurance money!". You can claim it is morally wrong, ultimately the government set the conditions for these programs. Also one thing to keep in mind: we don't know the exact conditions of these bonuses, they might be simply legally required to pay out the bonuses.

nielsbot 5y ago
From the article: The bonuses were paid because they were "concerned they could otherwise lose the three top executives."
- acomjean 5y ago
  They always say that. its not a great time for executives to look for new work. And in general pay has little to do with performance.
yunohn 5y ago
That’s not how bonuses should work. Plus, if there’s no money to pay other employees, they shouldn’t pay executives.

savant_penguin 5y ago

The real error here is public money being given to private companies. Let them break Fund people, not companies

bazooka_penguin 5y ago
Lock down the economy, kill small businesses, hand out printed money like candy to big corporations. Nothing suspicious going on...
dalbasal 5y ago
It's actually quite shocking how, when the primary idea is "dump money into the economy," giving the money to people instead of banks or firms is so controversial. It's more socialist and more capitalist, if you believe in that sort of thing.
- deathcalibur 5y ago
  I'm not saying you're wrong when I say consider the following: if every individual had a bunch of free money and decided to not work, then the next day they drive to the store and there is no one working... what do they do? Didn't you just cause a ton of inflation? At the end of the day, money doesn't solve problems. Work being done solves problems. How that should affect policy... I have no idea but I can see both sides of the problem.
  - toxik 5y ago
    It would have to be A LOT of money for people to stop going to their jobs. In a more realistic scenario: Maybe some people would quit their jobs because they gained some independence. Is that bad?
    - deathcalibur 5y ago
      The problem isn't really people quitting actually because like you said, that could be good. It's more like the business can't pay to stay open because there aren't enough customers to cover the variable costs. So now the business is closed and you have no where to spend your money... This realistically only affects small businesses like your local grocery store or whatever. Once the pandemic lifts, all that cheap property gets bought up by the Walmarts of the world and the concentration of power to the top 1% continues. Right? I could totally be wrong here.

primitivesuave 5y ago

Same thing is happening here in the US. For example, Trump's law firm Kasowitz Benson Torres took a $10m forgivable government loan for COVID relief [1] despite earning a profit of over $2m per partner in the preceding years [2]. 1. https://pppwatch.com/loan/9581937109 https://pppwatch.com/loan/9581937109 2. https://en.wikipedia.org/wiki/Kasowitz_Benson_Torres https://en.wikipedia.org/wiki/Kasowitz_Benson_Torres

kaliali 5y ago
Blame the lawmakers who wrote and voted on the laws and rules.

nostromo 5y ago

I'm surprised anyone is surprised. Here in the US we've spent several trillion dollars on Covid relief so far, and there's more to come. When you're dealing with a torrent of printed cash of this magnitude, there's of course going to be a lot of it that ends up in the wrong hands for the wrong reasons.

TheRealPomax 5y ago
No one would be surprised if this was about the US, but it's that "euro" symbol that makes it surprising.
- dalbasal 5y ago
  Is it? European/Dutch & US rhetoric can be quite different... but the actual policies are not, at least not in a sense relevant to this issue. In fact, the US cut people a bigger piece of the covid relief money than did most european countries.
  - e17 5y ago
    The US has even sent like $3k straight into the accounts of every citizen over the course of the pandemic! As far as I'm aware no other major country has done helicopter money like thia
    - tick_tock_tick 5y ago
      Much more than that if you were unemployed.
    - julienb_sea 5y ago
      The US money only went to households making below a certain threshold. Most other countries dumped heavily into their unemployment programs, sometimes funding full salaries for up to a fourth of the country over what is now looking like a 24 month period of time (see France).
    - icoder 5y ago

hugoromano 5y ago

Stop using marketplaces and book directly, these companies have no risks and take 16% to 30% commissions. If consumers start booking directly, recovery from the pandemic will be much faster.

camillomiller 5y ago
Any “solution” to the problem of excessive power of platforms that is based on the “individually do the harder thing” is bound to miserably fail. I think this kind of fallacy should have a name by now.
- kristjansson 5y ago
  My shorthand for all sorts of loosely related lazy thinking like that is “just skate better”[0]. Applies individually and collectively. [0]: https://youtu.be/jE494P5gQaY https://youtu.be/jE494P5gQaY
mschuster91 5y ago
> Stop using marketplaces and book directly Easier said than done if you want to pay with anything else than cash. Or if you want at least a somewhat functioning website where you can see if the venue is actually available and do booking.
- hugoromano 5y ago
  I know it is hard, but I have done it and I am a Revenue Manager in hospitality and a tours company. You have to be strong, it is a long process where you get repeat customers and friends of customers. A small loyalty program, best protection if your customers deals directly. one on one relationship but it works.
compscistd 5y ago
Some perspective from someone who has worked in hospitality: Some brands have fought back in creative ways. An essential part of being listed on Booking or Expedia is to agree to never advertise lower prices anywhere else, including your own website. That means you can share a $100/night rate on your own brand's site (with no commission) and you can't tell Booking or Expedia to show rates over $100. Thus, users have no advantage in going to a hotel's own site, which only shows their own brand's hotels. Expedia/Booking on the other hand show you all the hotels in the area and you can be confident in price-shopping (the one exception is loyalty points, but if you're a price-conscious, non brand-loyal customer, that won't matter to you). Worse, competing hotels can get better visibility by sharing even lower rates and promotions on these aggregators, and it becomes a race to the bottom, really hurting hotels long-term just for visibility. Choice Hotels had an interesting response a couple years ago: they show a "member-only rate" on their website. In the above scenario, technically, their public rate is $100 so Booking would take around $20 leaving $80 for the hotel. But Choice might also show $93 as an option on their website only for members (which is free to join, only takes an email/password). This way, technically their members-only rate isn't being advertised for just anyone so they don't run afoul of their Booking/Expedia agreements while only losing $7 as opposed to $20. Last I checked, Booking and Expedia didn't like this and they docked Choice Hotel visibility in their searches because even if it didn't run afoul of the agreement, they still have discretion over their search ranking. These aggregators don't need to disappear. They just need to lose some of their leverage over hotels. If all hotel brands banded together to offer their own "members-only" rate and customers became aware of what's happening, I'm sure it would really help out hotels long term.

ErikVandeWater 5y ago

It's interesting the CFO got more than 3x the CEO, and more than 2x CEO + VP. Does anyone know the reasoning behind that? It seems a bit shady to me in general for a CFO to be paid large performance bonuses.

Finnucane 5y ago
CFO writes the checks?
vmception 5y ago
The quartermaster runs the show on a pirate ship. The captain gets all the fanfare.
papito 5y ago
The CEO and the VP get the taste of the wig to not make much noise.
- nielsbot 5y ago
  "taste of the wig"? I don't know that saying.. is it "wine"?
  - ska 5y ago
    I suspect a typo for "vig", short for "vigorish".
    - nielsbot 5y ago
      Cheers. https://en.wiktionary.org/wiki/vigorish https://en.wiktionary.org/wiki/vigorish
ska 5y ago
For the most part, C level comp of this type is defined ahead of time with the board, and based on formulas/targets that are often tied pretty closely to job function. Given that; it's not a big stretch to see how income like this ("for nothing") might factor into CFO far more than the others.

sebmellen 5y ago

In the article, it's mentioned that they took €100m in state aid — even more egregious than the mere €65m they took from the Netherlands alone. And that, while Booking.com gets discounted tax rates and strong-arms the Dutch government to pay even less through an "innovation box" [0]. Not good at all. > In 2018 alone, the company received a tax discount of $435 million in the Netherlands, or about €385 million. Thanks to this bait from the state, not only will Booking’s headquarters remain in the Netherlands, but all income generated worldwide by the company will immediately flow to the Netherlands before being taxed elsewhere. [0]: https://happyhotelier.com/2020/04/18/booking-com/ https://happyhotelier.com/2020/04/18/booking-com/

GordonS 5y ago

If we're really going to insist on bailing out private companies (rather than letting them fail and using the money to help those left without work) - then surely these bailouts should come with rules that prevent the money from basically being embezzled by top management?

sdeframond 5y ago

I know at least one French consulting company did the same (Amaris). They basically gave the benefits they made from state aid straight to their shareholders. And at the same time they laid people off. My guess is: most companies who could do this did. No conspiracy, just plain greed.

kaliali 5y ago

Well blame the politicians who left loopholes in the laws to be exploited. Or blame yourselves for falling for the same stupid trick over and over. If everything they did was legal and by the book you shouldn't be blaming them, you should blame the lawmakers that allowed it to happen. There are no excuses when you write and vote on laws for millions of people to abide by.

Krull 5y ago

If it didn't come with string attached why are people mad at the companies? Shouldn't they either be mad with their representatives who allowed such things?

victordg 5y ago

"2.8 million euros went to Peter Millones, the vice president. Nearly 20 million euros, mostly in shares, went to CFO David Goulden" Goulden & Millones. You could not make this shit up.

sjaak 5y ago

This needs a trigger warning for the Dutch people reading this site. Shameless. Totally shameless.

jtwaleson 5y ago
It's not like we're proud of booking. Dark patterns in their product, horrible tech stack. As a software engineer there you'll get paid 30% over market value to work on Perl in a dysfunctional org. This bonus round is just another stain on an already bad reputation. Their CMO tried to start some nice PR recently, must be pretty mad now :)

necovek 5y ago

It seems that most of that €28M was "mostly" paid out in "shares": iow, minimal cash was transferred. That may make it both better or worse for everyone else at Booking.com (if shares go back in value as travel gets reinstated, it will effectively be more than that), but the aid itself was not used to cover these bonuses. Basically, Booking.com shareholders have redistributed their shares to a couple of employees. If, otoh, Booking.com goes bust, the value of these bonuses would plummet. If they attempted to cash in, it's likely value would go down too. Not going into the moral background of this, but the title and comments here were misleading to me.

shkkmo 5y ago
The reason why Booking.com had no money and needed a bailout is because they spent billions on stock buybacks. So when a company that does lots of buy backs later issues stock to pay bonuses, they might as well be directly using cash from the bailout. Edit: For concrete numbers, Booking.com spent 5.5 BILLION on stock buybacks in the first half of 2019.
- necovek 5y ago
  Buybacks are not mentioned in this article, and you quote a number from 2019, which is, to the best of my knowledge, pre-pandemic. If you are saying that they foresaw the pandemic and government grants, well... Now, I wouldn't be surprised that they were doing that even in 2020, considering they were also taking out $3B in loans (in addition to $100M of subsidies) to maintain the share value or reinvesting in themselves when others had lower trust in them, but when all of these numbers are stacked together, this article title is obviously click-baiting ("Top execs receive €25M of stocks while company borrows €3B and gets €100M in grants" is not something too much fuss will be raised about). The bigger problem IMO is the regular subsidies they receive for "innovating" (somebody here brought up a figure of >$400M of tax subsidies a year). I do agree that top executive remuneration is commonly out of hand, but I think that applies even to "regular folk": I find it unfair that my programming salary is like 7x the average salary (10x the median) in my "developing world" country. Both of those problems equally need to be fixed. While I may be providing suitably more economic benefit to my employer, I am not "worth" that much more: the incentives and values are messed up somewhere.

Ekaros 5y ago

28M bonuses on after probably worst year in their history? How can the system be this broken?

forgithubs 5y ago

And yet, people still vote for the same kind of politicians. I don't blame the execs, I would have done the same.

varispeed 5y ago

There needs to be done something about situations where companies pay minimum wage and at the same time register millions or billions in profits (and then making artificial loss while moving money offshore). It's controversial, but I think minimum wage should be directly tied to a given company revenue.

Jiocus 5y ago

The title is almost underwhelming in severity (which is a refreshing break from sensationalistic headlines), “[€28m in bonuses] even after taking three billion euros in loans last year, and 100 million euros in State aid including 65 million from the Netherlands. The company also let go of thousands of people during the coronavirus pandemic.” Booking.com isn't alone engaging in these practices. Many corporations seem to defend these payouts, by suggesting that these executives have gracefully managed the organisation during the pandemic distress. Such statements aren't very reassuring, because they feel more like sound bites of opinion, rather than arguments that can be debated and examined. How many jobs could they have saved with 28 million euros?

donmcronald 5y ago
IMHO the aid should have been loans only and executive bonuses should have gone to the government as collateral. If the company pays back the loan, the executives get their bonus.
- boruto 5y ago
  I have no horse in this race but intrigued by one sided comments here. Wouldn't people just be laid off of if govt did not give 65 mil to booking as benifits.(I assume this benifit is similar to short term work which is present in Germany). At the same time 25m is stock grants. So I feel both cannot be compared. If the government says you get no aid, Wouldn't company just lay them off? From what little I understand, In EU, govt pays a part of salary for employees to prevent them from getting laid off
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fruityrudy 5y ago
I think people make the mistake of thinking that the people who get bonuses are easily replaceable. The executive market of people who have experience at these kinds of levels is extremely thin. Your company needs to be attractive to this high echelon of talent. That means keeping a good record of treatment to executives. I think the thought of: “just pay them less or they can leave” is pretty common. But it’s just not easy to recruit at this level and the responsibility is huge. There is a slight PR angle to avoid looking greedy, but its moreso just the nature of the talent market at this level.

__turbobrew__ 5y ago

Covid has got me thinking about the government’s role in social welfare. Providing social welfare through money allows for people to misallocate the money or skim off the top of the money. For the vast majority of people their covid stimulation money did not go into their pockets, it went to their landlord or their mortgage holder resulting in a massive wealth transfer from public funds to banks and those who own land. I think the government should directly supply the basic needs of its citizens instead of using money as an intermediary for supplying social welfare. Money is only a means to an end for obtaining the basic necessities to live: you cannot eat a dollar bill for nutrition or sleep under a dollar bill for shelter. Government provided housing and food should be available to any citizen — no questions asked. At that point you can get rid of all welfare programs since the government is directly supplying the basic necessities for those in need. People would still be incentivized to work in order to obtain luxuries which are not supplied by the government: a private house, travelling, a car, etc. Stories like this further affirm that handing out money is not a good way for the government to provide welfare.

freetanga 5y ago
Five minutes later you have contracts for 5 dollar bananas and 4 dollar apples in every government… I like the idea but I much rather trust individuals (some of which will misuse funds) than politicians.
hervature 5y ago
How much food and what quality? Do I get to ask for tomahawk steaks every meal and an extra one to bring home to my dog? Is everyone entitled to an avocado or just those that live close to an avocado farm? There is no easy answer to this and you bet a government mandated system would be heavily lobbied to include/exclude certain things. For housing, do you get to decide where you live? Or does the government set up a massive new settlement of block housing in the cheapest part of the country? Do I get to ask for an apartment close to my family or do they just add me to the next unit available? We can argue about how many funds should be directed to certain programs, but SNAP and no taxes on food essentially is what you are suggesting while allowing for individual choice. Same for housing. The US basically gives your first house away for free which is part of the reason housing is so expensive.

ThePhysicist 5y ago

I stopped using them around two years ago when I was finally fed up with the increasing amount of dark patterns and gaslighting they did on their site. The reviews also became more and more inflated, I stayed at places with a 8.9 rating that were really shabby and subpar. The straw that broke the camel's back was when I booked a room at a hotel that had great reviews and lovely photographs, only to come to a place that was in the middle of being remodeled, with torn down walls and entry through a construction site. Also, most hotels will actually allow you to book rooms at lower prices and with less severe cancellation policies when calling them directly.

jiofih 5y ago
The rating goes from 8 to 10 in practice, so 8.9 is like a 5-7 :)

Shadonototro 5y ago

why would anyone want to go to work everyday and pay taxes, when things like this can; and happen?

knuthsat 5y ago

I'm not sure if I just can't find this information or if people exploiting government aid are just silent about it. These things happen because there are people who are trained to exploit these situations. But there are definitely levels to it. One way to do it is to just start a bunch of projects that will fail in countries that cannot meet their EU funds quota. https://cohesiondata.ec.europa.eu/overview https://cohesiondata.ec.europa.eu/overview You look at the data here. Figure out which EU countries can't find enough validly looking projects to get the funds. Go to that country with some initial funding and start legitimate looking business that will be funded by EU (mostly). Create legitimate expenses, even though the business will never be profitable and leech the EU funds through your personal accounts at some non-suspicious rate. Involving more players makes everything look more legitimate and when things fail, it's just how capitalism works. You can spend decades leeching on the money. On several occasions I met some fairly competent looking aliens and eventually realized this was the pattern that they wanted to exploit. These things are also done on a personal level (for example, a psychologist wants to open a practice that will work with groups of children and the project is well-written, costs are well defined and EU gives most of the money and the person just does what they described at a lower cost - spending the money on services that will indirectly make the individual richer). Another example is non-profits in EU. Small and large, they just suck out so much money, do the things they say will do, but the costs trickle down to the executives through various channels (for example, you can hire individuals to educate your employees but they charge you for fictional stuff and you collect the spent funds through some other way).

jVinc 5y ago

The base position taken in some countries of not providing bailouts, or bailouts above a certain limit, to companies who carried out stock buybacks or issued dividends was fantastic in my opinion, because it makes situations like this extremely bad for the company. Of cause a company would want to give huge bonuses to execs who manage to pull in a huge amount of money from the state, that's great for the company. Why should a company care if executives are being rewarded or are being selfish if it also benefits the company and owners overall? But with the exception to the aid, that would only be possible if the same execs brutally punished the stock owners, which would obviously put them in bad light for being selfish and not just doing good for the company.

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dbg31415 5y ago

Likely bonus criteria were set up in advance, but governments handing companies money certainly didn't hurt. Nor did having the people who run the company choose to award themselves bonuses. But look... end of the day here, if you give money to businesses don't expect the people running those businesses to do anything that isn't selfish with the money. If you give a bum on the street $5, he's going to spend that money on himself. If you give a CEO $5M, he's going to spend that money on himself too. I don't see why any sane person would expect anything different. Moral of the store is don't give money to people... not bums on the street, or CEOs. Just don't do it. You'll be let down every time.

Krisjohn 5y ago

When the poor receive benefits, some people get upset if they buy iPhones or big screen TVs. This is the first time the rich have experienced the same disapproval. I bet they're really surprised.

coliveira 5y ago

This is what we, in popular language, call a scam.

matthewtovbin 5y ago

They'd better spend this money to refund the customers for missed flight/hotel reservations in 2020/2021.

doingmyting 5y ago

Just another case of privatizing gains and socializing losses. A tale as old as America itself.

semilattice 5y ago

My view is that a system of government, where material advantages are based on quality of legal representation -- is doomed to become non-representative. The case in article is just an example of it. That means, in short, wealthy (corporations or individuals) can afford good legal representation --therefore they will necessarily bias the case law. And case law, will necessary, bias the subsequent judicial decisions. So a judicial system biased towards judging in favor of more expensive legal representation, is really the main reason why corporations become larger, why they create their own system of rules, that 'floats' on top of the system of rules for the mere mortal. --- We often have a dialog and an argument about size of government, vs size of corporations, vs individual freedoms and so on. But really what we first must recognize is that manipulation, disinformation and biases in the judicial systems must be eliminated. Basically we have to remove information manipulation and judicial selectivity out of the society. Then argue about other stuff. A step in the right direction -- would be to assign legal representation to all sides involved in a dispute (or in a criminal case) -- from some sort of a pool (based on say some standardize algorithm). This way in a dispute between Alphabet and a Joe Shmo would have equal legal representation. Overtime, this will slowly change case law, and outcomes of legal disputes -- towards fairness. Some might ask: would you do the same with Financial advisors, Doctors, University professors ? I would say no, because they do not impact the fairness of judicial system. Having said that, I do think that Job applications must hide (not include) what University an applicant had attended... but that's discussion for another post...

hrbf 5y ago

Lately, every time I read something like this, I think: if you build/maintain a system where such behavior is possible or even incentivized, you will get more of the same behavior. If you want this to change, at the very minimum, crooks in leadership positions need to be socially outcast, given a harsh prison sentence, their wealth confiscated and their legacies dismantled. Essentially, there need to be consequences. They need to lose what they care most about: their status, freedom and wealth. From there, give them a clean slate to work on earning our trust again, to rehabilitate, the hard way. You know, like every convicted criminal should have the chance to.

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stunt 5y ago

Every crisis is an opportunity IF you have business man's instinct.