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Earlier quoted context omitted.
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.
Sometimes, the best option for that is to pay the ransom.
Earlier quoted context omitted.
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 sa…
I would be very surprised if any significant fraction of CEOs and business owners had cut their personal compensation to this degree. Sure there are a few here and than, but probably, what, less than 5%?
This guy is clearly trying to garner some promotion out of his sacrifice, but he did still make the sacrifice and I think it benefits our society to laud people who do this.
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"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…
That’s a straw man. Big corporations that love regulatory capture and government bailouts rarely make free market arguments. They tout things like important regulations for their industry and how closely they work with the government to ensure a safe society or whatever.
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.
Longer answer: it doesn't matter as much as you'd think. These companies making huge layoffs are facing an existential crisis, not slimming down for a revenue shortfall.
Earlier quoted context omitted.
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.
Actually, the first rule of kidnapping is to get the victim out alive. Sometimes, the best option for that is to pay the ransom.
None of those solutions incentivize the kidnapper like a ransom payment (bailout, no strings) does, and they’re likely cheaper.
I wonder why we aren't hearing about companies selling more stock for funding. Sure it's at a huge discount, but better dilution than destruction, right? Is it just because the bailout loans offer them a better path? Or because they'd rather lay folks off than dilute?
Are there enough buyers for stock to make that useful right now? (Non-rhetorical question; I have no idea either way.)
Good question ¯\_(ツ)_/¯
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…
There's a good reason to support businesses: if you airdrop money to individuals, businesses will go under because they don't have any revenue. That'll result in job losses, and when the virus is under control, there won't be jobs for people (you can't start a business and ramp up to a large number of employees overnight--it's a big organizational problem). But the support for businesses should be limited to those th…
But what's happened when we've airdropped money on businesses? They pocket the cash. Executives get bonuses, companies buy back stock and cut dividends to their shareholders. And to show their commitment to belt-tightening, they punish consumers and lay off workers. Trickle-down economics does not work. Paying companies does not help the workers as much as paying the workers directly.
[1] https://www.forbes.com/sites/zackfriedman/2019/01/11/live-pa...
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…
When COVID hit, within a week we had customers dropping out of our sales funnel. Half of our expected revenue growth disappeared as customers decided to reduce risk and stick with existing solutions. This is what happens when the market goes “risk off”.
My company, like most, is leveraged. If I don’t earn positive cash flow, covenants on my debt will trigger a default, instantly ruining the firm. One default cascades to all the facilities, because that’s how debt works.
So, if I need to get to cash flow neutral, I am going to lay people off. I have no other option. It’s either that, or ruin.
This is why the government is supporting businesses by effectively becoming a lender of last resort. By tapping government loans, I can maintain my employees while we wait out what will probably be a short period of downturn. The money I have been offered is three year. Three years from now, we have either figured this thing out or we are living in caves. I’ll pay back the loan and my employees will keep their jobs. That’s how this works.
If I could provide feedback to policy makers: government should get something in return for the largesse. A small stake in each company, for instance, that we have the option of buying back at cost later. Because if society is supporting my business, society should have a stake in its recovery. I have not seen that happening anywhere.
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.
Gravity, which he co-founded in 2004 with his brother Lucas Price. making a dramatic announcement to his 120-member staff on April 13, inviting NBC News and The New York Times to cover it The reaction was tsunamic, with 500 million interactions on social media and NBC's video becoming the most shared in network history. https://www.inc.com/magazine/201511/paul-keegan/does-more-pa... I'm confused as to how he managed…
You're only looking at one side of the equation. The CEO wanted to ensure that his employees were all making a living wage. He's so committed to that that he's taking the same wage. To spin that as a foundering business is rather disingenuous.
I wish more executives would take more modest wages. My employer would have a lot more runway if our execs were making the same as the rest of us. Hard to buy into "belt-tightening exercises" where we sack a dozen qualified and necessary employees whose salaries don't add up to a single executive salary...