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I froze the salaries of my executive team to benefit other workers

theguardian.com

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Re: I froze the salaries of my executive team to benefit other workers

#11

Post by pdimitar »

the_mitsuhiko wrote: post #7
chmod775 wrote: post #2

Why does a company with only 500 regular employees even have 20 executives in the upper bracket? Are they just overpaid sales people? If the upper 5% at my company earned enough to double the wages of the other 95%, I'd be pretty damn mad about those leeches. Especially if the company is already struggling.

What they have on the website: * Chief Executive Officer * Chief Medical Officer * Senior Vice President, Human Resources * Chief Customer Officer * Chief Legal & Strategic Solutions Officer * Chief Financial Officer * President and Chief Operating Officer * Chief Compliance Officer * Chief Technology Officer * Chief Growth Officer In addition their board has 8 members.

What the hell is even "Chief Growth Officer"? Asking for real.

Growth is either achieved organically or you are just forcing your way to a lucrative exit without bringing any value. Artificial and forced growth is toxic for the economy at large.

The rest of the roles mostly make sense although I believe some of them can be merged so further savings can be accomplished.

Re: I froze the salaries of my executive team to benefit other workers

#12

Post by shalmanese »

petercooper wrote: post #6

I was thinking the math didn't work out, but it does. If you ignore taxes and say a raise of +7.50 an hour for a working week comes to around $14500 extra a year, over 500 employees that's about $7.3m. If that were split into 20 executive bonuses, that'd be $365K each.

$7.3M is the max if every other employee were making minimum wage. The amount it would take just to bring only the bottommost employees to the base wage is significantly smaller.

Re: I froze the salaries of my executive team to benefit other workers

#13

Post by johnchristopher »

locklock wrote: post #8
petercooper wrote: post #6

I was thinking the math didn't work out, but it does. If you ignore taxes and say a raise of +7.50 an hour for a working week comes to around $14500 extra a year, over 500 employees that's about $7.3m. If that were split into 20 executive bonuses, that'd be $365K each.

And if you're getting a $365k bonus you are likely already so rich that the money is only going for luxury things while for someone making $7.25 it's quite literally the difference between living in a car or not. I wonder if you could apply this to the rest of American society...

Isn't money used to buy luxury things supposed to stimulate the economy that would then stimulate the job markets and then trickle down to people ? /s

edit: forgot the /s

Re: I froze the salaries of my executive team to benefit other workers

#14

Post by shalmanese »

pdimitar wrote: post #11
the_mitsuhiko wrote: post #7

Earlier quoted context omitted.

What they have on the website: * Chief Executive Officer * Chief Medical Officer * Senior Vice President, Human Resources * Chief Customer Officer * Chief Legal & Strategic Solutions Officer * Chief Financial Officer * President and Chief Operating Officer * Chief Compliance Officer * Chief Technology Officer * Chief Growth Officer In addition their board has 8 members.

What the hell is even "Chief Growth Officer"? Asking for real. Growth is either achieved organically or you are just forcing your way to a lucrative exit without bringing any value. Artificial and forced growth is toxic for the economy at large. The rest of the roles mostly make sense although I believe some of them can be merged so further savings can be accomplished.

"Growth" is one of the most misnamed and misunderstood roles because, as you correctly noted, everyone in the company should be responsible for growth.

I explain to everyone about my role that it's not the responsibility of the Growth team to deliver Growth, it's our responsibility to put Growth more under the companies control. We act like a team of scientists to empirically try and understand what drives our growth and then build out systems, tools and processes to measure & improve those factors.

YC has a good guide on what kinds of roles a Growth team is responsible for and what good Growth people do: https://blog.ycombinator.com/growth-guide2017/

Re: I froze the salaries of my executive team to benefit other workers

#15

Post by arethuza »

chmod775 wrote: post #4
Angostura wrote: post #3

Earlier quoted context omitted.

CEO CFO Head of Marketing Head of Sales Chief Security Officer Head of IT Head of Clinical Services. Head of HR .. off the top of my head. Shouldn't be too difficult to add in the remaining posts

HR should be about 5 people in a 500 people company. There's not much space there for a hierachy with much of a pay gap, unless you're going to pay a direct superior >500% more. Same with most other roles at such a company.

I worked for a company that had about a thousand people in the UK and it had 2 people in HR (it was part of a much larger multinational).

Mind you - they didn't get involved in hiring at all - only processing people during acquisitions and handling layoffs and disciplinary matters.

Re: I froze the salaries of my executive team to benefit other workers

#16

Post by hedonic_ »

johnchristopher wrote: post #13
locklock wrote: post #8

Earlier quoted context omitted.

And if you're getting a $365k bonus you are likely already so rich that the money is only going for luxury things while for someone making $7.25 it's quite literally the difference between living in a car or not. I wonder if you could apply this to the rest of American society...

Isn't money used to buy luxury things supposed to stimulate the economy that would then stimulate the job markets and then trickle down to people ? /s edit: forgot the /s

Yes and no. Give someone earning $7.50/hour more money and it gets spent and put back into the economy like you said. Give someone earning a base salary of say 500k more money and it gets put into a bank to earn them even more money, taking it out of the equation.

Re: I froze the salaries of my executive team to benefit other workers

#17

Post by edh649 »

chmod775 wrote: post #2

Why does a company with only 500 regular employees even have 20 executives in the upper bracket? Are they just overpaid sales people? If the upper 5% at my company earned enough to double the wages of the other 95%, I'd be pretty damn mad about those leeches. Especially if the company is already struggling.

It's 500 entry level jobs, not all remaining 500 jobs. I presume there are many people between the bottom 500 employees and top 20 executives

Re: I froze the salaries of my executive team to benefit other workers

#18

Post by pdimitar »

shalmanese wrote: post #14
pdimitar wrote: post #11

Earlier quoted context omitted.

What the hell is even "Chief Growth Officer"? Asking for real. Growth is either achieved organically or you are just forcing your way to a lucrative exit without bringing any value. Artificial and forced growth is toxic for the economy at large. The rest of the roles mostly make sense although I believe some of them can be merged so further savings can be accomplished.

"Growth" is one of the most misnamed and misunderstood roles because, as you correctly noted, everyone in the company should be responsible for growth. I explain to everyone about my role that it's not the responsibility of the Growth team to deliver Growth, it's our responsibility to put Growth more under the companies control. We act like a team of scientists to empirically try and understand what drives our growth…

What you say softens it a little but IMO growth still should be organically achieved first and foremost and not chased after to please investors.

Bringing real value for customers should weigh much more than the approval of a bunch of golfers.

"Growth" in the terms you describe should be more like "marketing": what other market niches can we fill, are our prices reasonable, can we expand to country X, etc.

Re: I froze the salaries of my executive team to benefit other workers

#19

Post by rjf72 »

I don't understand something from this article:

"Our margins had declined and our revenue growth had stalled. ... I was becoming increasingly worried about our team and our turnover numbers. We are a people business and in some divisions we were losing 30 to 40% of our teammates within a year.

My HR staff suggested that we re-think our recruiting and training – which made sense – but I thought that we could do more. I thought we needed to reconsider how we supported and paid our team. For our entry level jobs – where turnover was the highest – we paid the federal minimum wage of $7.25 an hour (or less than $16,000 per year).

...

I took my concerns to my team. After many tough conversations, it became clear that we could not simply raise wages and hit our budget."

This just doesn't make any sense whatsoever. Recruiting and especially training has a very real cost for non-trivial jobs. Why would they pay minimum wage when they seem to be acknowledging that not paying minimum wage would increase their profits? This is something companies learned in the early 20th century. Henry Ford was the first employer to institute a higher minimum wage for his employees (doubling the average pay of the time). He didn't do it because he was a nice guy, he did it because he found that increasing the minimum wage reduced turnover which meant less spent on training and a general increase in productivity and profits. The same reason he would also go on to standardize what we now consider the normal 8 hour work day / 40 hour work week.

This seems very much like a story of a very poorly managed company. A minimum wage is appropriate when it's appropriate. When you're losing 30-40% of your employees, likely in meaningful part due to wage, and it's costing substantial amounts to replace and retrain for their roles - it's not appropriate. It seriously seems like at times that MBAs should be relabeled to masters of business annihilation because that's invariably where these incredibly myopic views on labor:costs:revenue seem to come from.

---

edit: confirmed. Here [1] is their board. And indeed it's just an MBA pack.

[1] - https://www.carecentrix.com/about-us

Re: I froze the salaries of my executive team to benefit other workers

#20

Post by adrianN »

hedonic_ wrote: post #16
johnchristopher wrote: post #13

Earlier quoted context omitted.

Isn't money used to buy luxury things supposed to stimulate the economy that would then stimulate the job markets and then trickle down to people ? /s edit: forgot the /s

Yes and no. Give someone earning $7.50/hour more money and it gets spent and put back into the economy like you said. Give someone earning a base salary of say 500k more money and it gets put into a bank to earn them even more money, taking it out of the equation.

I don't support trickle down economics, but it's not the case that money in banks is just sitting around in a vault. The banks actually do stuff with the money. For example it's loaned out to real world businesses.
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