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Electronic Design

What's All This Compensation Stuff, Anyhow?

One evening many years ago, I was sitting in a hotel lounge after a big Conference, drinking beer and talking with my boss Bob Dobkin and several other engineers, as well as some of National's marketing guys. The topic of different kinds of work came up, and after a while, the head of Linear Marketing, Brent Welling, said, "Well, Bob, suppose I asked you to come over to work for me in Marketing, for $80K a year."

I drawled, "Gee, Brent, that's an intriguing offer, but why would I come to work for you just to take a cut in pay?" Now, at that time I guess I was probably not making $80K, but I can keep a straight face when I call somebody's bluff, and Dobkin can keep a straight face, too. Brent was so nonplussed that he shut up for more than 5 minutes. Heck, I hadn't ever seen Brent shut up for as much as a minute, so I guess I did a good hit on him. And all because the topic of compensation is such a taboo. (No, we're not discussing 30 picofarads, not today.)

These days, if I say anything about changes in my paycheck, I might be considered bragging about my income. Here's the point: If my salary is slightly more than $56K, then one of my paychecks late in the year will jump up because the deductions for FICA* are cut off when you have made that much money in a calendar year. But if your salary is double that, your paycheck will show an increase in July. So, even though I may feel great when my paycheck is unleashed from the FICA deductions, I can only brag to my wife about how good I feel on that payday. If I talked about how happy I am to my friends, they can all look at the calendar and compute what my income is. Everybody who makes a different salary (greater than $56K) will have his paycheck jump up at a different time. However, in January, a lot of people will have their take-home pay decrease all at once. So even though we can't exactly celebrate our good fortune, we can all mourn the cut-off of our good fortune. Even our president Gil Amelio can join us in this disappointment.

Several years ago, I proposed to establish a new holiday to celebrate the rise and fall of income for anybody who makes more than $56K, and for anybody who ever expects to. (I didn't want to exclude any wannabes.) Since we already have too many holidays around January 1, I proposed to position this holiday half-way between Labor Day and Thanksgiving, about October 15. I tried to interest Herb Caen, the excellent columnist for the San Francisco Chronicle, in the publicity for this new holiday. But he never showed any interest, so I let the idea drop.

Obviously, everybody likes to have some take-home pay. Even those of us who say, "I can't believe they are paying us to do this stuff, when I would do it almost for free...." are pleased when we actually do get paid. But then, there are many other sorts of compensation. Most engineers get pretty good medical insurance, and those who are self-employed would be quick to remind us that that's a pretty impressive fringe benefit. At National, we also get Dental insurance (about 90% coverage), eyeglasses, and eye care. We get some free life insurance, and the right to buy more at cheap rates. Now, I have not been sick enough to miss one day of work in at least the last 17 years, but that does not keep me from appreciating good health insurance.

What other kind of compensation do I get? Well, when I publish a technical article in a magazine, or every time I write a column, National contributes a chunk of money. They think it's better to invest money by encouraging the employees to write about how to design with our products, rather than just running paid advertisements. We can get paid between $500 and $3000 for an article, and that is AFTER taxes. So all of us engineers, and many technicians, too, feel a good incentive to write about new applications for NSC parts.

I'll name another area of "compensation": National has good parking lots. I don't know how it is where you live, but here in California, many companies, especially in urban areas, are required by anti-smog regulations to start to account for the value of parking privileges. If I drove in to work in San Francisco, and my boss decided to bribe me by paying my parking fees, that gets counted as income. But soon, a person who takes public transportation, or bicycles, or walks to work, can apply for an equal amount of extra pay, even though he doesn't pay any parking lot fees. And, in a short time, even companies like NSC will be required to either charge drivers for their parking privileges or give comparably-valued benefits to employees who do not drive to work. So, the whole area of "compensation" is really VERY complex these days.

How can we "compensate" some of the people who work for us? Well, we have to make sure they get a decent take-home pay. And we can make sure they get enough challenging work so they're not hopelessly bored. I mean, would I take a big raise in pay for a hopelessly boring job? (Hey, Brent, not even for $80K).

Other forms of compensation include when NSC employees want to buy National parts to build into their hobby circuits, they can get them at distributor prices—such as 4M DRAMs for $12. And since we obviously want to encourage a guy to build a circuit that may turn into a good magazine article, we usually are able to get that guy sample parts for free. If he/she wants to come in on a Saturday, or take a scope or DVM home for the weekend, we can always find ways to get permission for that.

Just recently, NSC remodeled its cafeteria for quite a bit of money. The new food service provides inexpensive tasty meals, better than ever before. Because NSC subsidizes this, it saves the employee money, but the company gets the advantage that we can pop back to work quicker than if we went off to lunch at a restaurant. In a similar vein, we have some coffee groups that can put a Bunn-o-Matic in a convenient nook, with space and water and electricity provided by the Company. I won't say I never go over to the cafeteria to buy a cup of java, but usually I just throw 15 cents in a basket, grab a quick cup of Coffee Bob's best, and dig right back in to work.

So National puts a good bit of money in a given year into being nice to its employees. Is it direct compensation? Some is, and a lot isn't. But if you look at it as "enlightened self-interest," my employer tries to make life pleasant for us employees in many ways, and they do put a lot of money into it.

Am I trying to say that NSC is a great place? Well, I think it's a great and challenging place to work. Back 20 years ago, some of the toughest technical questions about op amps came in to Philbrick Researches, where I used to work, and we got paid well for answering them. These days, alas, Philbrick is no longer in business, and the tough questions come in to places like National. If we can answer the questions with a National part, then we deserve to get paid well for helping that customer. As near as I can tell, everybody at NSC is enthusiastic and cheerful and is willing to go out of his/her way to give the customer full satisfaction, even if it takes extra effort. And being compensated properly helps us get in that enthusiastic mood.

National has a good Stock Option Plan. We can all pay a certain amount of our pay into a special interest-bearing account. At the end of each year, we can either buy stock at the price set a year ago—great if the price has gone up—or at a 15% discount if the stock has not gone up. I don't know anybody who doesn't appreciate this advantage. We also have a 401K retirement savings plan, where we can conveniently set aside tax-free money, and National even matches some of this savings. There's also a profit-sharing plan, which looks even better now that National is beginning to make a profit.

The Company Store offers photo finishing at very inexpensive prices, as well as assorted merchandise—watches, calculators, tee-shirts, and sportswear—I gotta go see what they are selling this week. We do NOT yet have a dry-cleaning establishment.

Of course we have strayed away from the original subject of compensation, and are also talking about "benefits," but it's pretty hard to draw a dividing line between them, unless you're a lawyer. For example, we have a pleasant 14-acre Employees' Park where we can picnic or jog on our lunch hour or on weekends. And NSC will pay the tuition for many kinds of educational courses.

I haven't mentioned every good or worthwhile topic. So, YOUR comments are invited. I will not invite every reader to write about how well they're paid or their amazing compensation packages. Rather, topics should be of general interest, and, as usual, some of these may show up in one of my Mailbox columns.... All for now./Comments invited! RAP/Robert A. Pease/Engineer

Address: Mail Stop C2500A, National Semiconductor, P.O. Box 58090, Santa Clara, CA 95052-8090

*Who knows what "FICA" stands for? We know that our "Social Security" funds are technically sent through "FICA," but most people do not know that it stands for Federal Insurance Contributions Act.

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