| Salary Increase Plans Comparisons | ||||||||||||
| Plan A | Plan B | Plan C | ||||||||||
| Base | New | Total | Base | Total | Base | Total | ||||||
| Year | Increase | Bonus | Base | Salary | Increase | Salary | % loss | Increase | Salary | % loss | ||
| 0 | 1% | 4% | 60,000 | 60,000 | 3% | 60,000 | 4% | 60,000 | ||||
| 1 | 600 | 2,400 | 60,600 | 63,000 | 1,800 | 61,800 | 1.9 | 2,400 | 62,400 | 1.0 | ||
| 2 | 606 | 2,424 | 61,206 | 63,630 | 1,854 | 63,654 | 0.0 | 2,496 | 64,896 | -2.0 | ||
| 3 | 612 | 2,448 | 61,818 | 64,266 | 1,910 | 65,564 | -2.0 | 2,596 | 67,492 | -5.0 | ||
| 4 | 618 | 2,473 | 62,436 | 64,909 | 1,967 | 67,531 | -4.0 | 2,700 | 70,192 | -8.1 | ||
| 5 | 624 | 2,497 | 63,061 | 65,558 | 2,026 | 69,556 | -6.1 | 2,808 | 72,999 | -11.4 | ||
| 6 | 631 | 2,522 | 63,691 | 66,214 | 2,087 | 71,643 | -8.2 | 2,920 | 75,919 | -14.7 | ||
| 7 | 637 | 2,548 | 64,328 | 66,876 | 2,149 | 73,792 | -10.3 | 3,037 | 78,956 | -18.1 | ||
| 8 | 643 | 2,573 | 64,971 | 67,545 | 2,214 | 76,006 | -12.5 | 3,158 | 82,114 | -21.6 | ||
| 9 | 650 | 2,599 | 65,621 | 68,220 | 2,280 | 78,286 | -14.8 | 3,285 | 85,399 | -25.2 | ||
| 10 | 656 | 2,625 | 66,277 | 68,902 | 2,349 | 80,635 | -17.0 | 3,416 | 88,815 | -28.9 | ||
| 11 | 663 | 2,651 | 66,940 | 69,591 | 2,419 | 83,054 | -19.3 | 3,553 | 92,367 | -32.7 | ||
| 12 | 669 | 2,678 | 67,610 | 70,287 | 2,492 | 85,546 | -21.7 | 3,695 | 96,062 | -36.7 | ||
| 13 | 676 | 2,704 | 68,286 | 70,990 | 2,566 | 88,112 | -24.1 | 3,842 | 99,904 | -40.7 | ||
| 14 | 683 | 2,731 | 68,968 | 71,700 | 2,643 | 90,755 | -26.6 | 3,996 | 103,901 | -44.9 | ||
| 15 | 690 | 2,759 | 69,658 | 72,417 | 2,723 | 93,478 | -29.1 | 4,156 | 108,057 | -49.2 | ||
| 16 | 697 | 2,786 | 70,355 | 73,141 | 2,804 | 96,282 | -31.6 | 4,322 | 112,379 | -53.6 | ||
| 17 | 704 | 2,814 | 71,058 | 73,872 | 2,888 | 99,171 | -34.2 | 4,495 | 116,874 | -58.2 | ||
| 18 | 711 | 2,842 | 71,769 | 74,611 | 2,975 | 102,146 | -36.9 | 4,675 | 121,549 | -62.9 | ||
| 19 | 718 | 2,871 | 72,487 | 75,357 | 3,064 | 105,210 | -39.6 | 4,862 | 126,411 | -67.7 | ||
| 20 | 725 | 2,899 | 73,211 | 76,111 | 3,156 | 108,367 | -42.4 | 5,056 | 131,467 | -72.7 | ||
| Explanations: | ||||||||||||
| 1) To find out how this affects you, change the amount $60,000 in cell D5 to your 04-05 salary. | ||||||||||||
| All the numbers will change according to the formulas, assuming that the % increase stays the same. | ||||||||||||
| 2) % loss is based on plan A as compared with plan B or C. | ||||||||||||
| For example: In year 1, Plan A total is larger than Plan B, so % loss = 1.9 means Plan A is better | ||||||||||||
| than Plan B. However, starting in Year 3, Plan A total will be less than that in Plan B (% loss = - 2%) | ||||||||||||
| In twenty years, if we stay with Plan A (or this philosophy) instead of Plan B or C, | ||||||||||||
| we have the net loss of 42.4% and 72.7% respectively. | ||||||||||||
| The key is to make the BASE increase faster instead of taking a smaller BASE increase while | ||||||||||||
| accepting the BONUS in the long run. Not only does this affect the salary, it also negatively | ||||||||||||
| affects the benefit because it is tied to the BASE. | ||||||||||||