Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

“Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

twitter.com

Post reply on HN
Print view View original

71–80 of 193 posts

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#71

Post by rsync »

benatkin wrote: post #38

There are a bunch of tech CEOs who pay themselves one dollar. https://thehustle.co/1-ceo-salary/

I am aware of this, of course, and always find it interesting ...

According to my own understanding of US tax code(s), one must not reduce their w-2 income to zero - or even relatively small numbers that do not befit their position or responsibilities.

The issue here is that a funding for welfare programs, such as social security, are taken from wage earnings. It is, in fact, preferable for me, as a business owner, to reduce wages to zero and take compensation in the form of dividends or distributions.

But I cannot legally do that. I have been advised by multiple tax professionals that not only can I not do that, but I cannot have a conspicuously low salary. At the very least I need to hit the max social security threshold to avoid scrutiny.

So I always wonder how these $1 and $0 earners make this work on their personal tax returns ...

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#72

Post by Hasz »

liamcardenas wrote: post #55

Almost everyone I know who has run a business (myself included) has made similar sacrifices. This is not that rare. This guy seems to serially try to generate PR by making himself out to be a selfless CEO. In doing so, he is implying that most other CEOs/business owners are bad people.

I don't think the second sentence follows. Good people existing does not imply that everyone else is bad.

What's more, signaling corporate responsibility + personal ethics is a part of his company in the same way that Elon Musk's flamboyancy is a part of Tesla.

I much prefer the former.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#73

Post by sitkack »

treyfitty wrote: post #51
A4ET8a8uTh0 wrote: post #40

Earlier quoted context omitted.

Because society needs feel good stories right now. I am not even joking. You probably did not realize how close to the abyss we have come last week. In practical terms, people suck when they are scared and hungry. I rarely go for pop culture references, but it is very much applicable here: “Their morals, their code; it's a bad joke. Dropped at the first sign of trouble. They're only as good as the world allows them t…

The abyss is still near. This isn’t, in any way shape or form, over by a long shot.

It is both closer and deeper that it appears. We also need to flatten the depth.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#74

Post by danans »

zaroth wrote: post #44
brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

> The terms of the bailout loans are such that they can lay off people before they apply, get the money, and so long as they don't lay off any additional people after they get the money, the loan converts into a grant . This is false. The formula for the maximum amount of the loan is based on last years employment levels, or optionally, for companies that were not in business last year, based on January-February empl…

Just following that section is this:

-----------

(3) REDUCTION RELATING TO COMPENSATION.—The amount of loan forgiveness under this section shall also be reduced by the amount of any reduction in excess of 25 percent of compensation in the most recent full quarter in which the employee was paid in compensation during the covered period of any employee who was compensated—

(A) in an amount less than $33,333 during the period beginning on March 1, 2019 and ending on June 30, 2019; or

(B) not more than $100,000 on annualized basis during 2019.

------------

IANAL, but that sounds like employers can reduce employee compensation by 25% without any reduction in loan forgiveness, for any employee making less than $100k/yr.

Also, unless the individual workers are being tracked, they could also fire the existing workers, and hire replacements at a 25% reduction in compensation. Especially at the more easily replaceable sectors of the labor force, there are a lot of people desperate for employment right now.

EDIT: The Application section states:

-------------

(e) Application.—An eligible recipient seeking loan forgiveness under this section shall submit to the lender that originated the covered 7(a) loan an application, which shall include documentation verifying the number of full-time equivalent employees on payroll and pay rates for the periods described in subsection (d), including—

(1) payroll tax filings reported to the Internal Revenue Service;

(2) State income, payroll, and unemployment insurance filings;

(3) financial statements verifying payment on debt obligations incurred before the covered period; and

(4) any other documentation the Administrator determines necessary.

-------------

So it says they are interested in the number and fulltime-equivalent employees and pay rates, but nothing about the replacement of existing workers, although that information should be available in the payroll, state, and unemployment tax filings. With all likelihood, they are just looking at totals, just for efficiency's sake in processing the number of loan applications. This seems to leave a loophole open for unscrupulous employers to dock employee pay 25% without cause.

This is all an emergency drill of course. We're all going to see how this shakes out.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#75

Post by liamcardenas »

Judson wrote: post #62
liamcardenas wrote: post #55

Almost everyone I know who has run a business (myself included) has made similar sacrifices. This is not that rare. This guy seems to serially try to generate PR by making himself out to be a selfless CEO. In doing so, he is implying that most other CEOs/business owners are bad people.

I wouldn’t be so cynical. It’s important there are vocal leaders showing the sacrifices they are making — otherwise it’s easy for others to pretend it isn’t possible to make the same sacrifice.

I think it’s counter-productive. He is making this seem like a huge sacrifice when, in fact, it’s par for the course. I wish if he wanted to talk about it, he would make it less about himself and more about “what it takes to run a business”. In many cases, people pay themselves nothing, take on debt (without having ever made millions of dollars per year), and don’t guilt-trip/lord it over their employees.

(Ok I’ve said my piece, I won’t continue to be a hater :P)

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#76

Post by caycep »

todd3834 wrote: post #4

Not to be pessimistic but I assume when a CEO cuts their salary there are other forms of compensation like stock. Maybe someone here with more experience can weigh in? Cutting $70k only helps one person keep their job. How many employees do they have? Anyways, I still applaud his desire to keep 100% of his employees. It is noble. Board and shareholders might disagree but it is nice to see someone looking out for the…

I always wonder - when they calculate the dollars and cents of layoffs vs. hiring etc. Do they factor in the cost of losing employees, expertise, talent?

There's probably financial value that's hard to model/capture in the balance sheet by retaining employees and building up the average years of experience in your workforce, etc.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#78

Post by mantas »

onetimemanytime wrote: post #70
praptak wrote: post #34

Earlier quoted context omitted.

"And the principle of really existing free market theory is: free markets are fine for you, but not for me. That’s, again, near a universal. So you — whoever you may be — you have to learn responsibility, and be subjected to market discipline, it’s good for your character, it’s tough love, and so on, and so forth. But me, I need the nanny State, to protect me from market discipline, so that I’ll be able to rant and r…

They have a gun pointed to the government, we'll lay off 12,870 employees, unless. And so on. So it's not always that easy.

Let them do this and use money to pay job loss benefits to employees.

First rule of stopping kidnapping and blackmailing - don't pay ransom.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#79

Post by psychlops »

adaisadais wrote: post #29
brenden2 wrote: post #16

Earlier quoted context omitted.

Unfortunately there's little visibility into this, so we can raise our pitch forks and go after companies with angry mobs, but at the end of the day we don't really know what's going on inside every company. The law makers are the ones who write the cheques and make the system the way it is. The real problem is how laws are made and how the government functions.

> The law makers are the ones who write the cheques and make the system the way it is. The real problem is how laws are made and how the government functions Amen x 1,000,000. We elected these people whether we voted or not. As a people (whatever country we are in) it is our responsibility to hold them accountable because they will not hold themselves accountable. The whole system is completely broken. I have but one…

I wish this were more effective. Sadly, even between our false choices of poor candidates, we are frequently gerrymandered into futile voting.

Re: “Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”

#80

Post by kitotik »

ViViDboarder wrote: post #57
brenden2 wrote: post #7

What I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and s…

Some may do that, but if we don’t offer loans or bailouts to many companies (as well as bolster unemployment for the individuals) companies will surely lay even more people off, no?

The U.S. could give each household ~$15k instead of trying the trickle-down experiment again.

This is not a bailout, it’s another transfer of wealth using the same model that was prototyped during the last financial crisis.

Post reply on HN