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

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

#171

Post by keanzu »

klyrs wrote: post #100
keanzu wrote: post #89

Earlier quoted context omitted.

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…

> ...company whose finances are in need of slashing the CEO's salary to zero. 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 o…

> My employer would have a lot more runway if our execs were making the same as the rest of us.

He was making the same as the rest of his staff so where is his runway? First serious crisis in 5 years since that article and he's scrounging for $70K.

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

#172

Post by emaz1ng »

ttul wrote: post #99
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…

Business owner here. First, let me dispel the myth that business owners are wealthy. All of my friends from school have more liquid assets than I do. I am utterly broke unless you count for the paper wealth of my company shares. 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 so…

"My company, like most, is leveraged". Which is exactly why they should have never even exist in the first place. You and the ones you're refering to are part of the bigger problem. This is just a cycle and it will happen again.

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

#173

Post by zaroth »

qqqwerty wrote: post #113
zaroth wrote: post #44

Earlier quoted context omitted.

> 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…

The max loan is $10M though. And the amount of the loan is based on 2.5x the average monthly payroll costs for the year prior to the application date. So it seems like there are a few loopholes: a) If you have monthly payroll that is higher than 4M a month (2.5x4m=10M), than you can cut payroll and not have your total loan amount impacted (although it might impact the amount of loan forgiveness) b) If you hired a ton…

> The max loan is $10M though.

This only pays for employees that make $100k or less for companies with less than 500 employees.

$100k / 12 * 500 = $4.1M.

If you have a monthly payroll of over $4M then you almost certainly don’t qualify for this program in the first place.

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

#174

Post by SpicyLemonZest »

kitotik wrote: post #170
SpicyLemonZest wrote: post #167

Earlier quoted context omitted.

I'm not sure there's a clear definition of "trickle down". When people say that, I normally imagine something like a huge tax cut for the rich, and people arguing "well maybe they'll use that money to create jobs or something". It's a very different story to say "you know, many businesses are being legally mandated to shut down, let's give them some life support so they'll be there for all the workers they employ".

There is a fairly clear definition. You either support the supply-side, and hope their prosperity ‘trickles down’ to the proletariat, or you support the demand side, and let supply meet the needs.

It's not about prosperity, it's about jobs. Giving everyone in Tuscon a pile of money won't help them find a job if all small businesses and the Raytheon factory are forced to close down.

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

#175

Post by mistermann »

ttul wrote: post #160
mistermann wrote: post #147

Earlier quoted context omitted.

I hope that we some day have competent, completely arms length people perform a proper systems analysis and produce competent, evidence-based recommendations, and then we implement those (because done correctly, these recommendations should be as close to the gold standard as humanity is currently capable of), plus , and extra say 0.5% skim off the top that goes into a kitty for a rainy day. Why this seems like too m…

That rainy day kitty is known as taxation.

Taxation is the skim. A secure (protected from "borrowing, just this one time, I promise, don't worry I'll put this fancy piece of paper in the box as a replacement") kitty containing these funds, is something else entirely.

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

#176

Post by TearsInTheRain »

ttul wrote: post #108
pdeuchler wrote: post #104

Earlier quoted context omitted.

If a 50% drop in expected revenue _growth_ causes you to default on your debt you are either a startup that had trouble raising money, in which case now you know that you do not have a viable business plan, or you are running a completely unsustainable business that only existed because of easy access to cheap debt the past couple of years.

Common misconception. It’s not uncommon for companies to use leverage to fuel growth. High yield venture debt is often tied to growth metrics. It’s not a mistake to operate a company using venture debt. In a highly competitive market, if you don’t lever up, your competitors will eat your market.

Well you see it was a mistake to lever up because now your company's failed. Bailing out companies that got leveraged up to their eyeballs just rewards companies that take as much risk as possible. Does that sound healthy to you?

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

#177

Post by ttul »

TearsInTheRain wrote: post #176
ttul wrote: post #108

Earlier quoted context omitted.

Common misconception. It’s not uncommon for companies to use leverage to fuel growth. High yield venture debt is often tied to growth metrics. It’s not a mistake to operate a company using venture debt. In a highly competitive market, if you don’t lever up, your competitors will eat your market.

Well you see it was a mistake to lever up because now your company's failed. Bailing out companies that got leveraged up to their eyeballs just rewards companies that take as much risk as possible. Does that sound healthy to you?

Welcome to business. This is how it works.

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

#178

Post by ttul »

pdeuchler wrote: post #161
ttul wrote: post #108

Earlier quoted context omitted.

Common misconception. It’s not uncommon for companies to use leverage to fuel growth. High yield venture debt is often tied to growth metrics. It’s not a mistake to operate a company using venture debt. In a highly competitive market, if you don’t lever up, your competitors will eat your market.

> It’s not uncommon for companies to use leverage to fuel growth. High yield venture debt is often tied to growth metrics. This is, of course, exactly my point. "High yield venture debt" only exists due to absurdly low interest rates and an abundance of capital being driven out of public markets and into private ones. Now that the free lunch is over do not be surprised that your lenders come calling now that your "hi…

Ultimately, the explosion in venture debt products was probably an off shoot of quantitative easing and the general long term fall in interest rates. Investors seeking a yield from regular lending have not been getting it. The present financial crisis will test the hypothesis that the yield on all this venture debt was adequate to cover the risk of default.

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

#179

Post by ttul »

mistermann wrote: post #164
ttul wrote: post #155

Earlier quoted context omitted.

Companies aren’t going hat-in-hand. Governments are rightly bridging companies if they agree to not fire people.

You can assign whatever label you want to it, but it's odd how difficult to agree on what is happening here, or if anything of significance is even happening at all . Is there a flow of funds from government to one or more corporations involved in the scenario being discussed? YES/NO? Is there a risk that the government may not get all of this money back? YES/NO? Have we seen a scenario resembling this before? YES/NO…

Okay, you sound like a southern preacher. You want to save the economy? It’s going to take some broken eggs. Not all pennies will be accountably allocated. Some bad companies will survive. Some people will make money when they shouldn’t have.

But broadly speaking, if governments don’t move fast, there won’t be an economy in six months’ time.

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

#180

Post by ttul »

mistermann wrote: post #175
ttul wrote: post #160

Earlier quoted context omitted.

That rainy day kitty is known as taxation.

Taxation is the skim. A secure (protected from "borrowing, just this one time, I promise, don't worry I'll put this fancy piece of paper in the box as a replacement") kitty containing these funds, is something else entirely.

Norway provides ample guidance here. They have what, a trillion dollar sovereign wealth fund, invested exclusively in non-Norwegian assets, locked away for the rainy day when oil runs out or becomes valueless. That day may now be upon them.
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