I  really enjoyed the last post about private company incentives and the infamous Donn Corporation Outings. So today we are adding another unique reward that few companies would ever use.  Again this occurred at Donn Corporation while it was private and for reasons you will soon see was quickly discontinued when Donn was acquired by a very public firm. ( Warning: Some former Donn Corporation managers may want to delete these from their spouses’ computers or create one heck of a backup story!)

The Special Payroll Account:

The Donn payroll manager, Opal, maintained what we called the regular office/management semi-monthly payroll. This payroll worked like thousands of other ones at other firms.  But Donn’s Chief Financial Officer (my old mentor George, then me and our trusted Administrative Assistant, Kathy) maintained the special payroll Account. Both of these payrolls were, of course, reported to the IRS and the applicable state taxing people, but the special payroll offered people some unique benefits. The regular payroll only covered annual salaries to a fixed amount of say $75,000. Any base salary or bonus over that amount was paid quarterly from the special payroll Account. This insured that no one in payroll or accounting or anyone in a small department would ever know any top managers’ total compensation. Likewise, no one would ever know Don Brown’s or his family members’ total compensation. The accounting was handled by charging the special payroll in a large lump with no detail.

All of this is perfectly legal but with one moral caveat. Many of the top managers insisted that we not mail these special payroll checks to their homes. Rather they would come by personally and get them. Some of these Donn managers maintained special bank accounts of their own where they would deposit these special payroll checks. These amounts could buildup. For example, if you had a base salary of $100,000 and a bonus of $25,000, your special payroll checks that year totaled $50,000 before tax and say $30,000 after tax. After 5 years that’s a $150,000 special bank account. These non-reported-at-home funds could be used for hobbies, to pursue other interests or perhaps even charity.

When the large, public firm USG Corporation acquired Donn, several long-time Donn managers immediately quit rather than risk their marriages with the pending disclosure of their full salary checks. Some of us actually intermingled and disclosed our regular and special checks at home and did not have this problem.

But Donn’s owner, Don Brown, understood human nature and incentive rewards more than most Human Resource professionals. Mr. Brown also understood the little bit of larceny in the hearts of mankind that the Special payroll allowed some people to pursue in private.

This is probably another example of a private company incentive that is best not continued! But a great and true story.