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Booking.com to repay €65M Dutch State aid after €28M in bonuses for 3 US execs
- eyelovewe 5y agoI guess that I won’t be using Booking.com in the future.
- the-dude 5y agoNot only that, but TIL : HN automatically converts 'million' to 'M' and pulls the amount together, even if the title submitted is too long.
- barkingcat 5y agoautomation is overrated. I wouldn't be surprised if it was manually done by one of the backend admins or editors
- mosselman 5y agoI love simple-looking software that has nifty features hidden away behind the scenes where you’d never expect it. I pointed a non-tech recruiter of ours to HN the other day and she said “that’s a weird looking site”. Yes, yes it is and I like it.
- sim_card_map 5y agonothing weird about HN it's perfect
- dgfitz 5y agoI've always found the indentation being done by a gif kind of weird. But hey, it works.
- sim_card_map 5y agoit's because it was created like this 15 years ago, and if it ain't broke, don't fix it I wish every website followed this rule
- paulpan 5y agoI was wondering what made HN special, aside from its user community. The simplicity and self-governance model are atop that list. In other words, what if HN was a subreddit? There is actually a parallel one already set up: https://www.reddit.com/r/hackernews/ https://www.reddit.com/r/hackernews/
- fnord77 5y agoit's funny - in the banking world, at least with bonds, 'M' is 1000 and 'MM' is 1 million then you have fox news who uses "G" for 1000, as in 1 grand.
- kevincox 5y agoThat is sad. We have standards like SI units to help us communicate. Something as wide and non-specialized as Fox News should be using common standards.
- mypalmike 5y agoFox News literally had a segment where Tucker Carlson and a guest ranted about how the metric system is a tyrannical globalist plot. I don't think they're interested in such standards.
- gopher_space 5y agoIs there a better way to signal that you've never worked with your hands?
- elliekelly 5y agoThe way M is used so inconsistently always means I have to stop and ponder the context when I read it.
- lotsofpulp 5y agoI do not think the convention of using multiple Ms makes sense anymore in a world of billions and trillions. No reason to use MMM or MMMM instead of k, M, B, T, and eventually Q. The usage of G is just regrettable, although I guess there is a population that does not associate k with thousand. But that’s more of an indictment in lack of adequate education that they would not have experience with sufficient science courses.
- ewalk153 5y agoNot sure of the history of the Ms, but it could come from French: 1000 = mille 10e6 = million 10e9 = millard
- Daishiman 5y agoIt must be so nice being a corporation and saying "oops, our bad, we'll get right on it" instead of going straight to prison if I were to personally defraud a state of so much money.
- AbortedLaunch 5y agoThere’s no fraud involved. Booking was legally allowed to keep the money.
- deleted 5y ago[deleted]
- consp 5y agoThis is just PR damage control. Apparently someone calculated the loss would be more than the 65M so instead of reducing the exec payout they just pay back the money.
- elliekelly 5y agoIf they didn’t need the money in the first place why was it given to them?
- NovemberWhiskey 5y agoPerhaps at the time they asked for the money, it wasn't clear whether they were going to need it?
- ergocoder 5y agoAlso, the government could have dictated any vague good-faith terms under the sun like "if you don't need the money, you must return it" and etc. But the government didn't do that.
- Freestyler_3 5y agoThey fired people after they got the money so they kept losses lower that way.
- suetoniusp 5y agoWhat does US execs mean here? I see nothing in the article about the US
- fnord77 5y agofrom a previous article I read on this, the executives were based in the US. I don't have a link
- tyingq 5y ago"Some 5.8 million euros in shares and cash went to CEO Glenn Fogel, and 2.8 million euros went to Peter Millones, the vice president. Nearly 20 million euros, mostly in shares, went to CFO David Goulden, according to company documents reviewed by NRC" All 3 are Americans. https://nltimes.nl/2021/05/28/bookingcom-gives-eu28m-bonuses-three-top-execs-took-eu65m-state-aid https://nltimes.nl/2021/05/28/bookingcom-gives-eu28m-bonuses...
- thanatos519 5y agoUS execs, as in, the people who imported US tech management and fskced the whole thing up.
- bjeds 5y ago"Company X got state aid and paid Y in bonuses" seems to be one of those cookie cutter news reports that pop up several times per day the past year. The titles seem to imply that state aid directly went to a few senior executives. Outrage, right? But why not look past the knee jerk reaction? 1) In most cases I'm aware of, after digging deeper, you find out that the state aid is not for the company - it's for the employees. Running a business is no charity and if you have employees that are superfluous due to current market situation you lay them off unless the cost of retraining future employees is higher than paying operating expenses to have employees around that are not working as much as they used to. State aid can affect the decision by offloading expenses to the state, for employment safety. 2) Bonus payouts may be for last year performance and not related to either covid or the state aid at all. Just because you have two large numbers within the same order of magnitude doesn't mean they are related. Bonuses may have been paid of regardless of state aid.
- itake 5y agoI can't speak for this situation in Europe, but with the US PPP loans, companies basically had 2 months of their payroll paid for. This also means that got 2 months of free labor. With the no payroll costs, where does that "extra" payroll money that would/should of gone to payroll go? Investors? Executives?
- nickff 5y agoWell, a great deal of the money was to forestall layoffs; discount-rate labor doesn't do you much good if you don't need it.
- gareim 5y agoMoney is fungible. Aid that goes to paying non exec employees frees up money to be used for bonuses, so aid went to bonuses. I think people are more mad at the idea that companies that didn’t need aid got aid.
- deleted 5y ago[deleted]
- neom 5y agoSimilar conversation happening in Canada (but no repayment): "Bloc Québécois MP Xavier Barsalou-Duval put forward the motion, which states “that this House condemn the decision of senior management of Air Canada to pay themselves $20 million in executive bonuses when they’re received $6 billion in public assistance.” Air Canada informed shareholders on Monday that its top executives and managers were getting a combined $10 million in stock options and bonuses for their response to the COVID-19 pandemic." https://globalnews.ca/news/7918875/air-canada-executive-bonuses-covid-pandemic/ https://globalnews.ca/news/7918875/air-canada-executive-bonu...
- notsureaboutpg 5y agoBut that's 1/300 of the amount of aid they received spent on exec bonuses. In the booking.com case it's almost half the amount of aid spent on exec bonuses
- jlos 5y agoThe issue is (only slightly) more nuanced: while the executives collected bonuses, they did go for a few months without pay and their overall bonus' for 2020 were lower than in previous years. It does reveals the reality of our managerial class--in a sort of distributed, quasi-feudalism they are entitled (legally and practically) to extract massive amounts of wealth from large corporate entities regardless of any negative impact on the company. - Running the business into the ground (Target Canada) - Running the business into the ground while underfunding the company pension (Sears) - Lobbying for billions of dollars of tax dollars while cutting thousands of jobs (Bombardier, Air Canada)
- NicoJuicy 5y agoThey promised to protect jobs and no bonuses in return for state aid. That's exactly what they didn't do. They laid off 5000 people and got bonuses.
- lrem 5y agoBut giving the money back now would bankrupt the company, which no government would do. And since the people involved are powerful donors, no politician will even mention holding the people responsible.
- stuaxo 5y agoGiven the choice of paying back the 28 million in bonuses or the paying back the 65 million in state aid, the execs took the hard choice and decided to keep the bonuses.
- greydius 5y agoHard choice indeed
- ocdtrekkie 5y agoThis feels like something stockholders should sue over, as it's a deliberate choice for executives to screw the company to pad their personal profits.
- Aeolun 5y agoOf course, and it will show great executives what a swell place to work booking.com really is. Even if the comp is a bit low by executive standards, at least they have your back.
- elliekelly 5y agoA derivative suit: https://en.m.wikipedia.org/wiki/Derivative_suit https://en.m.wikipedia.org/wiki/Derivative_suit
- mypalmike 5y agoThe successful result of such a lawsuit: average stockholders will get a $12 credit towards their next booking.com excursion. Class action lawyers take their $18M commission. And the execs keep their jobs and those bonuses.
- bradleyjg 5y agoThat’s why boards hire “executive compensation consultants” to bless what they want to do anyway.
- s1artibartfast 5y agoWhy do you think there was a choice? I don't see anything supporting that in the article. The governments position was stated as follows: it was more important to maintain a consistent government than to apply the bonus rule retroactively and without warning. Seems like the company payback was entirely voluntary and this is an example no good deed going unpunished.
- mkl95 5y agoA quick Google search reveals Booking's net income is two orders of magnitude above those figures. The Dutch State should ask themselves if Booking ever needed those €65M and review the process that got them that money.
- gargs 5y agoThey get close to €400 million a year in 'innovation subsidies', so this probably didn't warrant any checks. https://www.quotenet.nl/financien/belasting/a27160874/nederlandse-fiscus-gaf-bookingcom-euro18-miljard-belastingkorting/ https://www.quotenet.nl/financien/belasting/a27160874/nederl...
- s1artibartfast 5y agoAnd they had 6 billion in cash on hand going into the pandemic
- lotsofpulp 5y agoThat much money for “innovation” and their website still looks like a malware site.
- belter 5y agoThe "innovation subsidies" are well know in the Netherlands as another tax stealing mechanism. Nobody takes them serious. The same as the intellectual patent laws in NL and Luxembourg. For Booking.com apparently most of their back-end is still Perl....
- namdnay 5y agoI don’t know about the Netherlands, but I’m France for example “innovation subsidies” are basically just a way to give tax breaks to industry. Every company with 100+ employees will have someone working on claiming as many projects as possible as “innovation” and claiming the relevant tax breaks Very silly, but it does slightly reduce the prohibitive cost of labour
- sam0x17 5y agoWish this kind of stuff would happen with U.S. bailouts when they spend it all on bonuses.
- gargs 5y agohttps://outline.com/Nf5eNe https://outline.com/Nf5eNe Here's a little bit of background from an article at the start of the pandemic. The company had originally announced that they would cancel bonuses in exchange for government support. They even promised to protect jobs, which they didn't, and laid off around 5000 anyway.
- Arrath 5y agoJust despicable.
- s1artibartfast 5y agoWould like to see more info about what exactly they said about bonuses and to whom. The article only mentions it in passing
- alephu5 5y agoI don't know much about economics but I do wonder why governments don't finance companies during crises by buying shares, and subsequently recoup our taxes buy selling them in times of prosperity. The UK government did this for the banks in 2008 but have recently been selling shares below market price. Is it corruption or is something you else at play?
- MattGaiser 5y agoBecause companies would rather lay people off than sell shares. Rationally, I think that governments should be ok with that as they will pay either way through unemployment or these rescue packages (at least with some industries where no critical supply chains are ripped out), but there would be enormous political pressure to stem job losses.
- newdude116 5y ago"Rationally, I think that governments should be ok with that as they will pay either way through unemployment or these rescue packages" You are wrong here. The 3rd option is to take money from the investors. The example given in this thread, Lufthansa, the stock holders should have been wiped out. It is called risk.
- sva_ 5y agoFWIW, Germany bought 25% of Lufthansa for 9 billion EUR in summer 2020[0] amid the Covid-19 losses, while the market capitalization was less than 4 billion. So they paid more than double the market capitalization to get a quarter of the company. [0] https://www.spiegel.de/wirtschaft/unternehmen/coronakrise-regierung-einigt-sich-auf-lufthansa-rettung-a-a017ac3b-c1af-4039-b7b9-8b74d376107b https://www.spiegel.de/wirtschaft/unternehmen/coronakrise-re...
- deleted 5y ago[deleted]
- newdude116 5y agoOT. Where do you book hotels?
- h_anna_h 5y agoI wonder if Mozilla received state aid.
- jbverschoor 5y agoThey'll also pay back the subsidies in all other countries
- hugoromano 5y agoWith interests please, and penalties for not abiding by contract.
- ta1234567890 5y ago> Social Affairs Minister Wouter Koolmees told Parliament there was little the government could legally do to force Booking.com to return the money because the bonus provision was not immediately included in the rules. He said it was more important to maintain a consistent government than to apply the bonus rule retroactively and without warning. This sounds either lazy or corrupt. There’s no need to retroactively apply the rule, but there are consequences that could be applied in the future, like forbidding companies that used the money for bonuses to apply for other government grants. Doing nothing because it’s “more important to maintain a consistent government” is messed up.
- the-dude 5y agoAs a Dutch citizen, I like my government to be consistent and not retroactively petty because of their own failings.
- stingraycharles 5y agoAgreed, as far as I can see, it was a calculated risk that companies would abuse it. Better to just suck it up and hope for public outrage in some of the more despicable cases, which is just what happened here.
- sabas123 5y ago> Agreed, as far as I can see, it was a calculated risk that companies would abuse it During the announcement of the first support package it was explicitly stated that due to the short time frame they had to operate in, they were taking this risk for the greater good. I believe that in the next support package they immediately made it a lot better w.r.t to abusing support. Personally I really liked how upfront they were with it.
- polytely 5y agoYeah it's actually the part of the pandemic the government handled the best as far as I can see, they got it up and running really quickly
- durnygbur 5y agoThis is so extraordinarily corrupted. Dutch employees of Booking, your income tax on the income above 68k EUR is 51% but don't worry the wealth will trickle down. Just work hard, wake up early, and be nice to people. Not.
- mathattack 5y agoThis reminds me of the Wall Street execs paying themselves huge bonuses after the 2007/2008 bailouts. (And nobody went to jail) The mentality was “The government should have struck a tougher deal!”
- cosmodisk 5y agoSimilar discussions in Lithuania: lots of companies that claimed state aid due to Covid went on to purchase supercars, boats, etc.
- Vinnl 5y agoOne caveat that I haven't seen mentioned yet is that the bonuses were awarded in shares, ie they did not affect Booking's liquidity. Not relevant for every (valid) opinion you might have, but relevant when judging e.g. Booking's consideration between not awarding the bonuses and paying back the aid.