Conference 7.286::dcu

re: .0

I'm not a candidate by any stretch of the imagination, but it would seem to
me that to supply a direct (i.e. yes or no) answer to the question posed in
the basenote would be to nail an inappropriate plank in their platform at
this time.

At this time, I would think that specific answers about specific cost cutting
measures, or one's feeling about such specifics, don't serve much purpose.
It might sway some particular voters one way or the other, but not on the
general issue, rather on a specific speculation.

I would think a more appropriate question would be "Would you favor the
_consideration_ of cost cutting measures in _all_ areas?" (Yes - I know that
answer wouldn't say much, but depending upon the answer and your desired
results, it might be enlightening to some degree. It also might invite
an appropriate followup which could be more specific.)

Of course, it is your base note, and you can ask whatever you like. I
just wanted to offer an opinion.

-Jack 

    As a candidate, I would agree with .1.  Not having current access to
    all the appropriate financial data of the DCU, it would be premature to
    commit to that type of a cost savings measure.  Loss of morale and
    productivity would have to be balanced against the savings.  Better to
    review all areas for inefficient cost expenditures and review (or
    establish) spending guidelines.  Making that drastic of a move without
    careful review would be as improper as some of the spending trends that
    have been observed as of late.
    
    Initial steps should involve an independant audit so the incoming board
    members know what they are getting into with respect to any
    inpropietites that might (or might not) exist.  Next would be to review
    the existing policies and modify the directives to each department to
    allow for them to adapt to the new changes.  At the same time, a
    review could be made of industry salaries and compare that to the
    existing DCU salaries in similar positions.  If they are high, it
    could be address by either a pay cut, as you suggest,  or a salary
    freeze.  The concern should be that you do not want to drive away your
    talented people - and there are many talented folks working for DCU. 
    We need to establish an environment to allow the cream to settle at the
    top. 
                                                                     

    I'm always willing to consider ideas. However, to say right
    now that I would or would not cut something would be irresponsible.
    I believe that the new board will have a learning curve. During
    that time all manner of things will be looked at. I have no
    idea what DCU employees make. I do believe that we have a whole
    lot of very good people there. Until proven otherwise I'm going 
    to assume that they're worth their pay. As a board member I would
    of course be taking a close look at operations costs but don't
    have near enough information to suggest cuts or additions to
    payroll.

    			Alfred

I have to agree with the previous candidates, we don't have enough data to
be able to say anything about salaries. We don't know what sort of things
we'll find whichever one of us is elected.

However I can say something concerning the California pension fund that was
pressuring companies (including DEC) to reduce the top officers' salary while
the company was going thru the "poor earnings" phase. There was a note
recently in the DIGITAL notes file about it. I thought it was a great idea.
It always bothered me to see people being layed off while the top bananas
get bonuses. When I met with Jack Smith, I gave him a copy of a newspaper
article concerning New England executives and how much each got as raises.
Ken and Jack were both listed on there as getting raises while people were
being transitioned at the time (I think it was around the same time).

I've also admired Ben and Jerry's ice cream corporate philosophy that says
that there should be a maximum ratio between the highest and lowest paid
people in a company. Their ratio was 7 or 8 to 1 I think.

I believe that reducing cost is an important objective for any company or
organization, given the current state of the economy and current business 
conditions.  I would not want to state in strict yes/no terms whether or not
I would favor salary reductions until I can review in detail the financial
condition of our credit union.  Salary reductions can have an extreme negative
impact on employees - I question whether a Digital employee would be willing
to work harder if DEC suddenly cut the payroll 15%.  So I do not view salary
cuts as a motivator of people.

The base note comments about salary cuts as a symbolic statement to those who
worked closely with Richard Mangone.  My understanding, based on reviewing
minutes of Board meetings, reading DCU v. Mangone, and NCUA v. Cohen et. al. leads
me at present to believe that Richard Mangone and Robert Cohen were the
central players in the alleged fraud.  These individuals are no longer in the employ
of the credit union.  The BoD, who got "taken" by the fraud, is not compensated.
So, its unclear to me whose salary could be cut as a symbolic gesture against 
Mangone.  Clearly it would be inappropriate to go to DCU employees and say "Well,
you were here working as tellers, clerks, loan officers, and accountants while
Richard Mangone was here, so you deserve a 15% cut in pay."

I do not have detailed information describing the cost structure within DCU.  I'm
certain that there is room for budget modifications and cost cutting/money saving
measures.  But at the present time, I cannot agree with the notion of cutting
salaries as a blanket statement or a campaign plank.

./chris

    
    Again, not knowing specifics about DCU management compensation levels
    it would be pure speculation to offer specific solutions.
    
    But I will comment on how I view bonuses for the DCU senior management.
    Bonuses are appropriate when the DCU has meet or exceeded its goals for
    the year.  Net profit, while one of the considerations, would NOT be
    the primary gauge.  Membership satisfaction, operating costs at or
    below the industry norms, increasing membership (market penetration),
    innovation, low loan defaults, are all very high on my list.  But if 
    there isn't sufficent net income to provide bonuses, none should be 
    given.  I suspect this to be the case for 1991.
    
    I view salary reductions with great skepticism.  For the little money
    you save, you end up de-moralizing and alienating the employee.  There
    are things which they have no control over which can impact their
    performance.
    
    I also do not view bonuses to be the sole property of senior
    management.  If a DCU teller suggests a new way of doing something that
    saves the credit union $150K a year, a new service for the memebrship
    that is a great success, there is no reason that they shouldn't receive 
    a bonus or reward as well.
    

re .0:  Great question -- it has elicited some very useful answers from
some of the candidates.  

I would like to ask a variant of the question.  Assuming for the moment
that salaries are not touched by the new Board, what about perqs?  What
kinds of perqs are apprpopriate for the high officers of a credit union
to receive?  What would you do if you feel that inappropriate or excessive
perqs are being granted in the DCU?

I realize that to some extent, the DCU has to provide the perqs that 
are standard in the industry to attract the best talent.  But where does 
one draw the line?  Would it be better to eliminate all perqs that are
not directly job-related, and replace them with higher salaries?

Finally, would you support revealing information about the salaraies,
bonuesses and perqs received by high officers?  At least in summary form?

	Thanks,
	Larry

    With that assumption or inappropriate or excessive perks, the answer is
    simple - remove them, and do so quickly.
    
    On the second issue of public salary information for executives - you
    bet!  Since the DCU is owned collectively by the membership, salary
    disclosures should be recorded in expense reports of the corporation to
    which members should have free and equal access, dispite your "business
    needs".