Seattle CEO Cuts $1 Million Salary To $70K, Raises Employee Salaries 482
First time accepted submitter fluffernutter writes Dan Price started his company, Gravity Payments, out of university when he was 19. Now he is cutting his $1 million salary to $70,000 and promising to raise all his employees' salaries. Dan is quoted as saying he made the move because "I think this is just what everyone deserves."Good business practice? Silly boosterism? Enlightened self-interest?
The dude's a dreamboat (Score:4, Funny)
Decent (Score:5, Interesting)
Just seems like a decent thing to do.
Re:Decent (Score:5, Insightful)
Decent *and* sensible.
He might draw a much smaller salary - but as he notes, a $1M salary had low marginal value for him.
What he just did was remove all money worries from his staff. Now all their focus can go on increasing the value of his business.
Good for them, good for him. Good morals, and good sense.
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What he just did was remove all money worries from his staff.
Not necessarily. When people earn more money, they tend to spend more less efficiently or for things they want more than need. If they have poor discipline, now they are eligible for more credit and can rack up bigger debts faster.
Often people spend more money than they should, Or they have a "spending disorder", such as Shopping Addiction OR Binge + Buyer's Remorse, and it ultimately results in money worries.
In other words: money wo
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If they have poor discipline, now they are eligible for more credit and can rack up bigger debts faster.
This is definitely true. I had a relative who spent several years working in the oil fields after dropping out of college. He easily was making enough money in one year to completely pay off all his student loans and other debts that he had racked up.
During the recent downturn he was laid off and was more in debt after several years of hauling in six figures than he was when he first started working out there. You tend to see the same thing with lottery winners as well where they can suddenly have millio
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I hope he has recovered; I was listening to the radio one time and this is the reason athletes who just turned pro in the NFL usually are staffed with a financial advisor to work out the mess a sudden windfall that 6 figures creates.
Re:Decent (Score:5, Insightful)
Yeah, don't give people money, they will just misuse it...
OFFS!
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He seems like one of the rare people/leaders who can say, I have enough, I want others to have enough as well. bravo.
Re:Decent (Score:5, Insightful)
Well, that depends... has he also cut any bonuses he may get? How much does he already have stashed away? Is the company public, or going public? If so, how much stock does he own? Is he contemplating an entry into politics and is doing it to put a nice coat of polish on his populism creds?
By the way: For the longest time, Steve Jobs had an annual salary of $1.00 as CEO of Apple. Of course, his stock holdings in the company gave him more money annually than the GDP of many small countries, but...
Anyrate, while this is admirable and such, the sceptic in me wants to know more abut how he can afford to do that (because $70k/yr in Seattle ain't really all that much money), and why.
$70,000 not being all that much money depends on how much you expect is "all that much". I was supporting a family in Seattle with a single income of $70,000 before taxes, with want of nothing.
But, that's not what prompted me to reply.He reduced his salary to 7% of its prior amount because he felt he had enough and wanted his company to better invest that money in its other employees. He could have six billion in cash sitting in accounts all over the world, and it wouldn't change the sense of his action.
Re:Decent (Score:5, Informative)
Do you understand how taxes work? Only the first $4,900 of capital gains would be tax-free assuming no other income. The next $389,500 at 15%, and the rest at 20%. If he took a $5 million capital gain, he'd still own the top capital gain tax rate on most of it.
Re: Decent (Score:3)
Re: Decent (Score:4, Insightful)
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With a newborn, child daycare will cost me $1515 per month. An increase in my salary will help me be in the office 5 days a week vs. working from home
Your story is anecdotal and does not apply to the population in general. Your story also does not contradict my proposition.
There are intelligent or beneficial uses of additional $$$ and bad ones. There is well-planned budgeted constrained spending, and impulsive spending.
You chose to not spend money on childcare before, and work from home which can be car
Re: Decent (Score:5, Funny)
Why pay $1515 per month ?
When with new Amazon Babycare your infant child (maximum 20 pounds and 30" x 10" x 10") will be picked up by drone on Sunday night and returned on Friday evening each week for a mere $1000 per baby per month. Baby warehouse specialists will tend to your child's every need and facilitate full access to kindle baby entertainment and eLearning.
Prime discounts available.
Re:Decent (Score:4, Insightful)
What he just did was remove all money worries from his staff.
Not necessarily. When people earn more money, they tend to spend more less efficiently or for things they want more than need. If they have poor discipline, now they are eligible for more credit and can rack up bigger debts faster.
Often people spend more money than they should, Or they have a "spending disorder", such as Shopping Addiction OR Binge + Buyer's Remorse, and it ultimately results in money worries.
In other words: money worries are not exclusively caused by low salaries. Money worries can be caused by insufficient education/poor resource management, and psychological problems as well.
Our modern economy is based on this dynamic. We would not be able to sustain economic growth if people just bought what they need and maybe a little extra. Because of the way our monetary and economic systems are set up, they require constant growth or the music stops.
I would also add that people are constantly inundated with advertizing. That advertizing often seeks to make the subject feel inadequate in some way and offers the solution by way of the product being advertized. People have studied how to make people react in a certain way and what triggers their responses. Basically it is those people's job to figure out what makes you tick and use that knowledge to manipulate you. So I can't be too hard on people who make seemingly foolish decisions with their money. We are so immersed in advertizing and PR it's hard to even see it happening. The psychological pressure is immense and is designed to be hard to resist.
MMMP (Score:3)
So what you're saying is that Biggie Smalls was giving out good financial advise? "Mo Money, Mo Problems"
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What he just did was remove all money worries from his staff. Now all their focus can go on increasing the value of his business.
Hopefully, but in most cases, bills tend to rise to meet available cash for some reason. Often when household incomes hit the $70K-$140K range depending on location, household money management starts to get strategic instead of purely tactical and things change.
Sounds Familiar (Score:2)
I think this has been tried before [blogspot.com]
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What he just did was remove all money worries from his staff.
But he could have used that money to hire more people instead, and expand the business. The result would have been broader income equality, more goods and services produced, and more revenue for the company that could then be used to pay even more people. He would have done more good if he had been greedy.
Reality: Stock Options (Score:3)
Moves like this aren't philanthropic. It's a common tactic for a vested CEO to cut their salary to just $1. But because they are vested (EG: stock options, partial ownership, etc) they make out just fine.
As a company owner, I could cut my salary to just $1 and it probably wouldn't affect my true annual gross income at all, since unpaid salary just becomes profit.
Re:Decent (Score:5, Insightful)
Even if that is true and he still makes boatloads of money, raising the minimum pay of everybody in the company to $70k is still a very generous thing to have done and should still laudable.
This is assuming they don't try to weasel out of the spirit of it (e.g. only full-time employees and they only hire contractors and part-time workers afterwards).
Re:Decent (Score:5, Insightful)
Good for them! Gaming the system to make a buck and help their employees at the same time. But this is not sheer altruism at work.
Re:Decent (Score:5, Insightful)
Forget about the class warfare, OK? Even Bruce Springsteen would agree that as long as everyone is winning, it shouldn't matter if someone is winning more. There are few places in the USA where $70K/year is not a good salary. I doubt those high-fiving employees who just had their salaries doubled think it's a "publicity stunt".
Singlehandedly, he returned $930,000 to the bottom line of his company. Most of us can't make such a claim. But that only accounts for boosting about 25 people who were making $34K to $70K, so unless his company is quite small, I'm sure other strategies were employed. We'll see how effective those strategies are over the coming years. That will tell us if he's just a good guy, or a great CEO.
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Forget about the class warfare, OK? Even Bruce Springsteen would agree that as long as everyone is winning, it shouldn't matter if someone is winning more. There are few places in the USA where $70K/year is not a good salary. I doubt those high-fiving employees who just had their salaries doubled think it's a "publicity stunt".
Singlehandedly, he returned $930,000 to the bottom line of his company. Most of us can't make such a claim. But that only accounts for boosting about 25 people who were making $34K to $70K, so unless his company is quite small, I'm sure other strategies were employed. We'll see how effective those strategies are over the coming years. That will tell us if he's just a good guy, or a great CEO.
From the images on their web it looks like they have about 40-ish employees. Going down from 1M to 70k would give about 23k extra per person. If the average salary before was around 50k then this alone would be sufficient to cover that.
But even for very large companies where 1M distributed over the employees doesn't give more than a couple of hundred extra each year I think it could be beneficial.
The symbolic gesture of the CEO not making more than two or three times more than the guy on the floor could boo
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From the images on their web it looks like they have about 40-ish employees. If the average salary before was around 50k then this alone would be sufficient to cover that.
You don't need to infer from images. This article tells you there are 120 people on staff, and that aside from the CEO salary cut, 75-80 percent of the company's current projected profits are being transformed into salary: http://www.nytimes.com/2015/04... [nytimes.com]
Re:Decent (Score:4, Insightful)
Forget about the class warfare, OK? Even Bruce Springsteen would agree that as long as everyone is winning, it shouldn't matter if someone is winning more.
Everyone except the most radical parts of the left would likely agree with that, the problem is when everyone stops winning it becomes a lot less palatable. In the US, that occurred in the mid-1970s so even the slowest among us have figured out that something is wrong by now.
Long View (Score:5, Interesting)
So here you are, a clerk or some other lower on the totem pole individual who is now making $70k. You buy a house, maybe a used car, or the reverse, either way, you increase you expenses because you can. Even frugal people would do it, it's human nature.
So now it's a few years later. The company goes under, you get laid off and you go around looking for a job that pays $70k for doing what you were doing.
None to be had.
Compensation has been commensurate to your skills for hundreds of years. It may suck for the unskilled, but that's what works. For the employer and the employee. You increase your skills, you increase your pay. Do more, get paid more. When everyone makes the same or nearly the same for vastly different levels of skill and effort, then you are headed for trouble in the long term. Just look up the Jamestown Colony and how it worked out for them.
Re:Long View (Score:5, Insightful)
Your argument boils down to:
"if you get paid more than you're worth, you might someday find yourself in a situation where that well-paying job goes away, and you'll need to re-adjust your standard of living back down to where you 'should' be. Wouldn't it be better for you to simply keep making less money and remain at that lower standard of living in the first place? You'd avoid all kinds of uncertainty and potential upheaval!"
Compensation is whatever your employer wants to give you. If you find what this guy is doing to be grating and wrong, that says a lot more about you than it does him.
Re:Long View (Score:4, Insightful)
No, the argument is that people will do what people do, which is increase their expenses as their income increases.
When they have to cut back, they won't, and instead end up on the six o'clock news whining that it's so unfair and that they should get to keep the house they can no longer afford. We've seen this before.
We're both saying the same thing. You trust the wisdom of the market over your own judgement. Your core argument is that you should stay where the market says you belong, because you really can't be trusted to know how to handle more than what the market says you deserve.
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Start your own company and employee a few hundred people.
Let us know how that turns out. Tell us what skills it took or how it was so easy, a caveman could do it.
You casually dismiss the amount of time and effort that goes into creating a thriving and successful enterprise and almost certainly know nothing about it.
Re:Decent (Score:4, Insightful)
>Forget about the class warfare, OK? Even Bruce Springsteen would agree that as long as everyone is winning, it shouldn't matter if someone is winning more.
Sure, *IF* everyone were winning. But they're not. Real wages have been falling for the lower 90% of the population for ~50 years, even while the GDP has been climbing rapidly. And even most of the top 10% are substantially worse off than they would be if wealth disparity weren't climbing so rapidly - only the 1% are actually better off than they would be if not for the aggressive class warfare being waged by the uppermost echelons of the 1%. Double the salary of someone making $35k and they're STILL losing, just not as badly.
That said, in this particular instance yeah, the CEO is to be applauded - he can't change the game single-handedly, but he can and has improved the lives of many of his employees,
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We've got more gadgets, but energy, healthy food, and property, the most "real" things you can get, have not gotten cheaper in line with the reduction in incomes.
Re:Decent (Score:4, Insightful)
I'd rather see someone selfishly improve the lives of others than see somebody wreak havoc in the name of good.
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Yeah, well, some kids never get over the desire to blow things up.
Re:Decent (Score:5, Informative)
Meh, like most CEOs out there Im sure he makes most of his income in bonuses and stock, I doubt that he'll really notice the drop in income from his annual salary. This is a publicity stunt and nothing more. /cynicism.
The company was projected to make $2.2 million in profit and he was going to make $1 million in salary. He is also cutting into 75-80% of his profits to pay for this wage increase, so the total amount of money being spent is an extra $2.6 million. He has one partner and I couldn't find the equity split, but the owner is likely going from around $2.5 million in total compensation down to about $400k. That is a pretty large difference.
The owner is still making a lot of money, but I don't think this gesture should be written off as a publicity stunt.
Re:Decent (Score:4)
Slashing your own take in by 75% isn't a PR stunt anymore, and he has the benefit of ensuring he will have the pick of the litter in terms of talent for his company. Who wouldn't want to work for a guy that doubles your salary to look out for you? The most important part of running a company is getting the right people and keeping them happy. With this one move he has done both with a perfect ten.
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Look at a store like Wal-Mart and then something like Costco and tell me that one doesn't have employees that are more enjoyable to interact with. Guess which store is more likely to get my business.
The extra public
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It's not just the people, it's the way they are treated.
Most people with no worries are nice pleasant folks. People who have to regard life as a constant battle are likely to be hostile.
Are you more likely to be of pleasant demeanour, if you know that after a work day in one hour you are
a) Going home to a nicely appointed white-picket-fence home where your wife, who can afford not to work full time, has a good home-cooked meal waiting for you
OR
b) Going to your next job as fry cook in the McDonalds. You'll p
Good advertising (Score:5, Insightful)
I've seen this headline about 5 times in the last 24 hours, on a variety of media. It's certainly good for advertising, if nothing else.
Brilliant Marketing (Score:5, Informative)
If you dig through more articles it states that he'll be paid $70k a year until his business starts making above a certain amount again.
So far I've seen this guy on Facebook, the Today show, Reddit and now Slashdot. It's making its rounds and is a great PR move.
Socialism! (Score:5, Funny)
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That's what's wrong with 'Murica today, too much socialism. We need to nip this kind of thinking in the bud! When will the working class realize that they only benefit when their betters are allowed to run things as they see fit, unrestricted by regulations and burdensome tax laws?
I realize you're trolling, but there's nothing about capitalism that prohibits benevolence. This seems to be a very confusing point for many people.
The owner decided to do this of his own free will, regardless of what his motive was. That's the point of freedom. You're allowed to choose. Under socialism, your choices are far more limited. As with most forms of collectivism, either things are mandatory or they're prohibited.
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The owner decided to do this of his own free will, regardless of what his motive was. That's the point of freedom. You're allowed to choose. Under socialism, your choices are far more limited. As with most forms of collectivism, either things are mandatory or they're prohibited.
Under capitalism, the people with the money have LOTS of choices. The vast majority of us, not so many choices.
Re:Socialism! (Score:5, Insightful)
Clearly a comment from someone who has never been without money. FYI it costs a lot of money to start your own business, and those who live paycheck to paycheck are very much short on options when quitting means they are homeless. Money gives you options. Lower income people have less options because they have less money, and the reason they have less money is because the money is being scalped by higher income people who have the options, granted by wealth, to do something like influence an election or lobby for a lower minimum wage.
also:
The fact that some people have more choices doesn't mean that you have less
Did you actually read this statement? Do you realize that it contradicts itself or are you just that blinded by you unsubstantiated ideology that you cannot see reason?
Real freedom means having a say in what matters (Score:5, Insightful)
The owner decided to do this of his own free will, regardless of what his motive was. That's the point of freedom. You're allowed to choose.
And most will choose not to of their own free will. That's the problem. If we made taxes optional, how many people do you think would pay? If we eliminated work safety rules do you think best practices would be followed? Real freedom isn't the absence of rules and obligations because society cannot function without them. Real freedom is being able to have a meaningful say in what those rules and obligations are and should be. Real freedom isn't depending on the beneficence of a single CEO deciding one day to be a nice guy.
Under socialism, your choices are far more limited. As with most forms of collectivism, either things are mandatory or they're prohibited.
Tell you what. Take a trip to Europe sometime. The EU is by many measures the largest economy in the world. The standard of living in most of the EU is quite high compared to much of the rest of the world. Most governments in the EU have what is generally acknowledged to be a somewhat socialist ideology - certainly in comparison to the USA. And yet they have good health care, good GDP per-capita, world class businesses and manufacturing and art and sport, and are among the most successful societies on the globe politically, economically, militarily and socially. All while "socializing" certain aspects of their society and what do you know, it works if you don't take it to the extreme of communism.
Here's the point of all that. We ALL depend on each other. You can argue about how much sharing is a good thing but you cannot argue that all sharing can be optional. It simply will not work. Some folks simply are more willing to acknowledge this fact than others. You can argue about how much sharing is a net benefit to society but the argument Socialism = Bad is just stupid. EVERY society has some amount of socialism to it and it cannot be otherwise.
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Re:Socialism! (Score:5, Insightful)
So we can both agree that this is the exception, rather than the rule. CEOs and shareholders will pretty-much NEVER allow this, unless forced.
Now, back to the salt mines.
Re:Socialism! (Score:5, Insightful)
Capitalism allows business owners and leaders to CHOOSE to make decisions like this.
Count of business owners making such a decision under capitalism: 1
Socialism forces them to do it. Liberals don't really understand the importance of this distinction.
Oh, we understand perfectly.
Re:Socialism! (Score:5, Insightful)
But it's fine for the 0.01% to rewrite the laws to allow themselves to seize an ever-greater portion of the national profits? They thank you for your loyalty I'm sure - or they would, if they gave a fuck about the proletariat.
Re:Socialism! (Score:5, Insightful)
But it's fine for the 0.01% to rewrite the laws to allow themselves to seize an ever-greater portion of the national profits?
So basically, what you're saying is "The rich and powerful are corrupting the government. The only solution is more government!"
Re:Socialism! (Score:4, Insightful)
Choice is overrated. Most people would choose not to pay taxes, but are reliant on them being paid by someone.
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Say, I wonder how many "business owners and leaders" would have CHOSEN to go to the Moon in 1961?
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You start with a true statement, and then go on to make a baseless and unsubstantiated attack. First, you really can't claim to know what an entire segment of the population thinks. (If you do, Randi would be happy to hear from you.) Second, I think Socialists would argue that the distinction is very important -- central to their beliefs, in fact.
Re:Socialism! (Score:5, Funny)
We depend on each other - like it or not (Score:5, Insightful)
Capitalism allows business owners and leaders to CHOOSE to make decisions like this. Socialism forces them to do it.
Every civilized country engages in socialism. The only difference is in the degree to which they do it. A society which does not will rapidly fall apart. If you have a job it is because a lot of other people worked very hard to make it possible - even if you work for yourself. We require people pay taxes and minimum wages and other things because it benefits us all. While you can take it too far, we're certainly in no danger of that here in the US.
Liberals don't really understand the importance of this distinction.
Liberals understand that the real world isn't a place where we can afford to pretend we don't depend on each other. Share a little and everyone benefits. It is possible to both share too little and share too much. Personally I think the sharing too little is the worse of the two options.
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Capitalism allows business owners and leaders to CHOOSE unilaterally for all the employees under their purview. Socialism forces them to extend the power of choice a little bit to all involved. Conservatives don't really understand the importance of this distinction.
People paint all socialism like some kind of communist dictatorship, but in reality socialism can be very similar to capitalism, but with one small but very important change:
A capitalist company is owned by its financial capital and "borrows" it
How much is his investment in the company making? (Score:5, Interesting)
A lot of CEOs (a good example was Steve Jobs) will take token small salaries because most of their income is from their ownership in the company.
If he's pulling down $5 million a year from company stock dividends, is giving up a $1 million salary that big a deal?
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If he's pulling down $5 million a year from company stock dividends, is giving up a $1 million salary that big a deal?
Yes, when it means the minimum wage of his employees jumps from $34,000 to $70,000.
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The tax rate on his salary was 40% (marginal). The tax rate on his capital gains is 15%. He could even come out ahead.
Missing the Point (Score:5, Insightful)
If he's pulling down $5 million a year from company stock dividends, is giving up a $1 million salary that big a deal?
I think these kinds of statements are missing the point.
The real story here is: hey, you can still make an ass-ton of money without leaving your employees as slaves!! Everyone can win and grow together, rather than a subset at the expense of the majority. (and happy employees produce more, willing to work more, etc., so the company and therefore CEO benefit even more -- it's a positive cycle).
If it's not a big deal to lose some salary because it will be made up for in investment income/dividends, then why don't more CEOs do this? I hope this guy starts a movement; even if his intentions were not entirely altruistic, it is still a good thing.
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If it's not a big deal to lose some salary because it will be made up for in investment income/dividends, then why don't more CEOs do this?
Because:
A: their souls are dried up.
B: their souls are sold to the Devil.
C: They never had a soul in the first place.
Re:How much is his investment in the company makin (Score:5, Informative)
The company was making $2.2 million in profits, and 75-80% of that is also going into this wage increase. So he is significantly lowering his total compensation by a drastic amount (probably around 20% of his previous compensation).
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What you should do is stop focusing on whether the dude is indeed negatively affected by this or not, and switch to whether the people who work for him are positively affected or not. They ARE positively affected and that's all that matters.
I don't care if it's a PR stunt or calculated move, I care whether the employees of that company are happier. If they are, all's peachy.
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It isn't cute, it is CEOs taking advantage of YOU directly, and looking like heroes when they do it.
Re:How much is his investment in the company makin (Score:4, Informative)
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In general I applaud this sort of restraint, but I hope it is the full story. As anyone who has contracted knows, you are a knob to accept a salary if you can avoid it. Having the money come out in dividends, capital gains or trust/company income basically takes you from a punitive tax regime into one where you can manage tax in remarkably creative ways.
For example if you want to run a race car, you can quite happily claim back the costs of racing as an advertising expense so long as you put a logo on your
So what? (Score:5, Interesting)
He surely owns a large chunk of the company: Why take a huge salary when you can motivate your employees to work harder and make the company worth more? That is a faster way to get rich than just paying yourself a salary.
He gets rich faster, and the employees are happier. It's win-win. Just don't pretend it's about "justice" and not simple self-interest.
Meh.
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That's one way to look at it I guess. He could just have easily boosted his salary and cut staff. He didn't do that. Let's hear from the employees before we make judgment. Sure there is a good dose of PR in there, but if staff are getting raises and he is motivating them that will improve the company, and that is good business.
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Actually I fail to see how "motivate your employees to work harder" necessarily translates into "employees are happier". In many companies the two concepts are inversely correlated.
I prefer it when leadership gets paid in company stock. When the company does well, they get a reward. If the company performs poorly, they take a hit. When CEOs get a guaranteed salary with a nice severance agreement, that gives them less incentive to perform in the best interest of the company.
Re:So what? (Score:5, Insightful)
I prefer it when leadership gets paid in company stock.
That's exactly why most companies' leadership only thinks ahead until the next fiscal quarter end.
Re:So what? (Score:4, Insightful)
Indeed. Perhaps they could be paid primarily in stock options vesting 10 years after they're issued.
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"Actually I fail to see how "motivate your employees to work harder" necessarily translates into "employees are happier""
Fair criticism. I just think that for people with common sense, more money likely (not necessarily!) translates into a better life and more satisfaction, up to a point.
A larger apartment closer to work for a more relaxing commute, fewer nagging worries about money, chances to enjoy nicer "things", etc. are all minor but real improvements in quality of life that can be enjoyed with a
Missing option (Score:5, Insightful)
Good business practice? Silly boosterism? Enlightened self-interest?
Why not all of the above? He's generating buzz for his company, one which I've never heard of before. His employees will probably be happier, and he's probably getting stock options or something else we don't know about here, so that fits both the good business practice AND enlightened self-interest. It could turn out to be "silly boosterism" if it doesn't end up having any of those effects, but you won't know that immediately...
A Spectacular Political Statement (Score:2)
This is not just a good thing for Gravity's employees, it is also an enormously thought-provoking action at a time when such actions are rare.
Even imagining that high tech is a true meritocracy, which is a fairly dubious imagining, American companies are still floating in the sea of American business. And America has been heading towards historic levels of income inequality, higher than the levels that preceded the great depression. We tend not to learn our lessons until we shoot ourselves in the foot or
70k for all (Score:2)
While a campaign is underway in B.C. to raise the minimum wage to 15 dollars, a Seattle company is going to pay its employees at least $70,000 a year.
Basically everyone (even the janitors) will make 70k. I'm sure the CEO will have stock and options in the company to make far more than 70k but his "official" earnings is the same.
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Basically everyone (even the janitors) will make 70k
I know this is pedantic but... do any companies actually employ janitors rather than contracting it to a cleaning company?
Worth it. (Score:4, Insightful)
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A good deal in the first year, but it's an ongoing expense. Now $70k will get you a shit-ton of options to choose from for lower level job hiring, but anyone looking to hire in at a higher salary is going to know that there isn't as much headroom in the budget for the overall salary cap. It may work; it will certainly gain him at least a huge short-term morale boost (unless you were already making 63-69k, in which case, not so much) in addition to the press.
Its still a nice gesture, even if it's a calculate
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I didn't see anything where it said the maximum salary would be $70k, just that the CEO was dropping his own to $70k. I've known a few businesses where a particularly valuable employee made more than the CEO/owner since the CEO/owner made money off stock or was already wealthy enough that the salary just didn't mean much to their overall numbers.
Challenge to other CEOs (Score:5, Interesting)
CEO salaries are getting ludicrous, and while his $1M is not that outrageous compared to others, it still could be translated into about 10 FTEs. Setting a minimum wage for his staff, and making sure they can all survive on what they make at their job, will translate in staff dedication that will be hard to put a price on.
I think he's also thrown the gauntlet down to other CEOs, saying: "Dare you to join me!"
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Steve Jobs, and many others, could probably live like Gregory Peck in The Million Pound Note [film4.com] ; people are willing to provide you goods and services if they think you're good for it, and will bring them more business later...
Easy and misleading (Score:2)
This isn't hard to do -- it simply means that the company will eliminate all jobs making less than $70k and supplement with contracted individuals and companies. It's easy to say that you would pay janitors $70k a year if you don't actually employ any janitors (and wouldn't employ any janitors because you don't want to pay $70k for them).
Rich people are taxed differently (Score:3)
Once your net worth is sufficient such that you don't have to earn a salary anymore, you want to switch the majority of your earnings to income from investments.
Investment income is taxed at the capital gains rate, whereas regular income is taxed at the much higher income tax rate.
This is the simplest explanation you can read, but it's one reason why the rich keep getting richer. We've set up a welfare state for them.
Re:Rich people are taxed differently (Score:5, Insightful)
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It's much much worse than that. If you're slightly above middle class wealthy (more than a few million) you don't pay any tax, and if you're completely immoral you can even put yourself into an income position where you, your spouse or children are getting handouts from the state (e.g. education grants, child tax credits). I'm serious look into it a bit.
http://www.accounting-degree.org/accounting-tricks/
I can't find the link now but the investment banks have a great scheme where they essentially loan you mo
What if this happened at Wal-Mart? (Score:2)
Let's suppose Wal-mart started a floor at something reasonable, say 20$ an hour. This would attract a much better class of employee and in turn customers. They wouldn't spend nearly as much on shrinkage and retention as they do now... I think it would transform the entire company.
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Let's suppose Wal-mart started a floor at something reasonable, say 20$ an hour. This would attract a much better class of employee and in turn customers. They wouldn't spend nearly as much on shrinkage and retention as they do now... I think it would transform the entire company.
I'd think Wal-Mart has considered all this and compensates their employees to maximize their return. I trust their judgment over yours..
But what other compensation does he get? (Score:2)
What a lot of people don't realize is that top brass gets compensation that's often not in their salary e.g. stock options. Salaries are taxed at the ordinary income rate. Bonuses and options are not. More than likely this was a weasel move to garner public support while secretly loving the fact that his tax burden has been significantly lowered.
Good for him (Score:3)
The cynical side of me wonders if he still maintains stock options, etc. but that is besides the point. The point is that he did it when he didn't have to. More importantly he is raising the salaries of others at the same time that he is lowering his own. It might be symbolic to a certain extent but I'm betting that the people that got raises are not seeing it that way.
Well played Mr. Price, well played.
Retention is a nice bonus to the owner (Score:3)
I'm not saying this is a bad move, but it may not be a purely good move for the employees.
GOPRO (Score:3)
He should also equalize equity compensation, then. (Score:3)
There are a lot of CEOs who make $1 per year to pay less in income tax, and rake in hundreds of millions in stock comp. Also, $70K is barely adequate in Seattle.
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5000 resumes in the first day
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Why does anyone need to work harder in an era of technological efficiency? Working harder at WHAT? For WHO? WHY?
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The database guy CAN unload the trucks with dinner on them.
The loading dock guy CAN'T upgrade the databases. That is why you make more money than he does.
Incentive to Work Harder? (Score:5, Insightful)
This is exactly what's wrong with America. The majority is convinced convinced that our economy is broken because people aren't working hard enough. I'm convinced of the exact opposite. The reason the economy isn't working right is because people are working too hard in exchange for too little. Furthermore, we could be more productive, and more prosperous, by working more cooperatively and less competitively.
Re:Incentive to Work Harder? (Score:4, Insightful)
Nah, GDP has been growing by leaps and bounds for decades, the economy is running fine. The problem is that it's been intentionally re-tuned so that wealth is being transfered to the 1% even faster than the economy is growing, and the rest of us have gotten screwed.
The fact that so many people think that the problem is people not working hard enough is an example of the effectiveness of propaganda in class warfare.
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