Stripe Is Offering $20,000 Bonus To Employees Who Relocate To Less Expensive Cities, But It Comes With A Pay Reduction


Topline

Stripe is offering a $20,000 bonus to employees who move away from San Francisco, New York City or Seattle but it comes with a 10% pay reduction, spokesman Mike Manning told Forbes, making the e-commerce and mobile payment processor the latest tech company to implement pay cuts for workers who chose to relocate to less expensive cities as remote work policies are extended because of the pandemic. 

Key Facts

Stripe, which has more than 2,800 employees, has relied on remote work for years and in May announced it would hire at least 100 remote engineers, saying remote workers have helped the company stay close to customers so they can tailor Stripe’s products accordingly. 

Stripe joins other technology companies that have said they’ll cut the pay of employees who move to less expensive cities, including the social media companies Facebook and Twitter and enterprise software companies VMware and ServiceNow, according to Bloomberg, which first reported the news.

Further Background

Just as many white-collar Americans are reconsidering the cost of living in expensive cities if remote work policies continue, many companies are also reconsidering expensive office costs. Some companies have had market-based salary policies in place for years, meaning pay is adjusted based on the cost of living or cost of labor in the area. 

Tangent

The job search marketplace Hired surveyed 2,300 tech workers and found that 55% said they would not be willing to accept a reduced salary if their employer made work from home permanent. An overwhelming 90% said the same job should receive the same pay, regardless of if the person works remotely, but 40% said they support location adjustments. More than half, 53%, said they would be “likely” or “very likely” to move to a city with a lower cost of living if allowed to work from home permanently. 

Further Reading

Stripe Workers Who Relocate Get $20,000 Bonus and a Pay Cut (Bloomberg)

Why Silicon Valley workers who relocate for remote work face pay cuts (Fox Business)

2020 State of Salaries Report: Salary benchmarks and talent preferences (Hired)



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Chinese Billionaire Wang Jianlin’s Wanda Group Sells U.S. Skyscraper Project To Reduce Debt


Wang Jianlin’s conglomerate is offloading another overseas asset to reduce its debt.

Wanda Hotel Development Co., a Hong Kong-listed subsidiary of Dalian Want Group, said in a filing that it has agreed to sell its 90% stake in Vista Tower for $270 million to Magellan Parcel. The Chicago-based real estate company already owns the remaining 10% of the luxury residential and hotel project that will rise 101 floors above downtown Chicago.

The asset sale is expected to give Wanda Hotel Development a net return of HK$94 million ($12.13 million) before taxes, the stock exchange notice says. Wanda acquired its share of the project in 2014.

“As the Chicago property project is still under construction, the disposal will help reduce the current and future indebtedness of the group,” says the company’s filing to the exchange. The group in turn expects to “divert its resources” to hotel development, management and operations among other lines of business.

Wang, estimated to be worth $14.3 billion, is the founder and chairman of Dalian Wanda Group. He had become China’s richest man at more than twice that amount by arriving early to China’s commercial real estate boom in the 1990s and later transformed the group into a global entertainment empire. Jack Ma, chairman of the e-commerce giant Alibaba Group, overtook Wang in 2017.

After making a slew of acquisitions for several years in Europe and the U.S., Wanda has been offloading assets after it was placed on a watch list by regulators in April 2017. He sold his Chinese hotel and tourism assets for over $9 billion in 2017, followed by shedding a stake in the Spanish soccer club Atletico de Madrid and part of a stake in the U.S. movie theater chain AMC a year later. In March, Wanda Sports Group agreed to sell its Ironman triathlon business for $730 million.

Dalian Wanda Group had joined a wave of Chinese companies that sought ambitious overseas investments between 2012 and 2016. They hoped to brand themselves as global names, learn from overseas partners and diversify beyond an increasingly crowded domestic market. The deals didn’t always pan out.

“Chinese corporates went on an overseas buying spree, though this petered out as many realized investments were more challenging than previously anticipated,” says James Macdonald, senior director of Savills Research, China. At this point, he says, “developers might be looking to selectively dispose of assets to pay down outstanding debt or raise capital to be redeployed elsewhere.”

Wang’s companies still owns U.S. film studio Legendary Entertainment and run one of China’s largest movie theater chains. The group was hit particularly hard this year by the coronavirus outbreak which forced mass closures of cinemas. “Obviously Covid-19 has had a big impact on the hospitality, retail and entertainment sector, and so if assets can be sold and generate a net gain during this period of time, then all the better,” Macdonald says.

The group has additional investments in finance as well as more than 260 plazas in China.

The hotel developer’s Hong Kong-traded stock price gained 24.5% to close at HK$0.33 on Thursday after a three-day pause in trading due to the announcement.



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