I don't know about all the formulas you just threw at me. I could send over mine and we could have a wonderful math off. But I would much rather leave all my math problems at work.
However, I can tell you that if you pay normally expect to pay a $350,000 bonus for an 18K trainer that you are losing money if you wait until his salary is $70K to replace him. My formula says in those conditions you should buy again when your trainer costs about $36,500. Let's see the difference in money if instead you wait until $70K.
I will ignore the original severance for now since it clouds things. I am also rounding Kukoc's and my salary down to make the numbers easier.
Scenario 1 - keep until $70K salary - about 56 weeks
-56 weeks salary=$2,149,914
-bonus=$350,000
-total=$2,499,914
Scenario 2 - replace when salary hits $35K - about 28 weeks
-28 weeks salary=$717,476
-bonus #1=$350,000
-severance=$35,000
-28 weeks salary=$717,476
-bonus #2=$350,000
-total=$2,169,952
Look at that - a savings of $330K over 56 weeks. That's almost $6,000 per week, not a fantastic amount. But if you multiply that over three different staff members...
You can't calculate this and take some willy-nilly date for when you want to break even.
Last edited by HeadPaperPusher at 10/15/2010 10:22:53 PM
Run of the Mill Canadian Manager