CEO cuts his pay by almost $1M to give his employees big raises • Hacker News Board

Re: CEO cuts his pay by almost $1M to give his employees big raises

#61

Post by JoeAltmaier » Thu, Apr 16, 2015, 3:40 PM UTC

mattlutze wrote: post #48

AndrewKemendo wrote: post #33

This company is not big enough to generate that kind of media attention organically, which tells me they made it into a press event. In that sense it rings hollow because it is clearly a publicity stunt. I think this is a general issue with all of these activities, and really any activity in a company, that you shape the message that you want to send to the world rather than there being an accurate representation of…

If the effect is that 1. he'll actually take $50,000/year in direct salary, and 2. that all of the call center etc. employees got bumped up to $50k/year immediately, and 3. that, as the article states, it indicates cutting profit from 2MM to 500K, I don't know that I'd call it a publicity stunt.

I don't understand - he's giving up salary (not profit), so why does profit change at all?

Re: CEO cuts his pay by almost $1M to give his employees big raises

#62

Post by golergka » Thu, Apr 16, 2015, 3:41 PM UTC

brianfitz wrote: post #32

I responded to this in a previous thread, but I think I can simplify it down to the perception versus reality of the change the CEO has enacted. What many people believe: The CEO has set a minimum compensation bar to help those with market wages below $70k. What has actually happened: The CEO has determined that going forward, he'd rather hire people with higher market wages and more experience versus paying lower wa…

Even if he didn't decide it, it would make similar effect: higher salaries would attract more people, and the company would eventually hire better workers (if they aren't complete idiots and are capable of selecting the best of the people applied).

Re: CEO cuts his pay by almost $1M to give his employees big raises

#63

Post by dataker » Thu, Apr 16, 2015, 3:41 PM UTC

What most people don't realize is that, working in a startup, he probably holds a large amount of equities.

When/If there is an exit, he will cash out a LOT more than his employees. That's his real 'bonus'.

In Wall Street/corporations, executives are less prone to have exits so they give themselves tremendous bonuses.

A totally different case.

Re: CEO cuts his pay by almost $1M to give his employees big raises

#64

Post by golergka » Thu, Apr 16, 2015, 3:42 PM UTC

colechristensen wrote: post #58

brianfitz wrote: post #32

I responded to this in a previous thread, but I think I can simplify it down to the perception versus reality of the change the CEO has enacted. What many people believe: The CEO has set a minimum compensation bar to help those with market wages below $70k. What has actually happened: The CEO has determined that going forward, he'd rather hire people with higher market wages and more experience versus paying lower wa…

You know what's terrible? How very unwilling nearly every company is to hire and train inexperienced workers while simultaneously complaining about not being able to find talent.

Hire and train vs hire talented is a very different strategy. Training requires more resources up front and it comes with a higher risk; it's suitable in some situations, but it certainly isn't for everyone.

Re: CEO cuts his pay by almost $1M to give his employees big raises

#65

Post by cookiecaper » Thu, Apr 16, 2015, 3:42 PM UTC

ukigumo wrote: post #30

bko wrote: post #8

This is a valiant effort but I wonder how the practical allocation of the jobs is determined. If the market salary for an employee is 50k, if you raise it to 70k, you will probably have a lot more applicants than positions. Do the current employees get grand-fathered into the job despite more qualified candidates? When hiring new employees, how do you decide among the increasing rank of equally qualified candidates?…

Is there a direct correlation between higher qualifications and better performance and output? If having two equally qualified employees, is their salary requirement the only decisive distinction? I think this experiment will have quite a few positive net outcomes (publicity, reduction of cost with recruitment and retention, etc) but on the longer run employees making 70k will automatically know that they are on the…

It can definitely foment discontent when, say, a low-mid-level software engineer pulls the same as clerical workers. I wonder if that will have any effect on the company's ability to hire professionals. Maybe they'll expect a commensurate salary bump; if you're paying 1.8x the normal salary for a clerical or support worker, shouldn't you pay 1.8x the normal salary for a professional? What kind of message does that send about how much the company values professionals, and will pros be more comfortable at companies with more conventional pay structures (even though I doubt any would admit that publicly)?

Re: CEO cuts his pay by almost $1M to give his employees big raises

#66

Post by AndrewKemendo » Thu, Apr 16, 2015, 3:43 PM UTC

mattlutze wrote: post #48

AndrewKemendo wrote: post #33

This company is not big enough to generate that kind of media attention organically, which tells me they made it into a press event. In that sense it rings hollow because it is clearly a publicity stunt. I think this is a general issue with all of these activities, and really any activity in a company, that you shape the message that you want to send to the world rather than there being an accurate representation of…

If the effect is that 1. he'll actually take $50,000/year in direct salary, and 2. that all of the call center etc. employees got bumped up to $50k/year immediately, and 3. that, as the article states, it indicates cutting profit from 2MM to 500K, I don't know that I'd call it a publicity stunt.

What then is the purpose of making such a press event out of it? It's clearly them promoting their brand by jumping onto the fairness bandwagon. That doesn't mean the CEO doesn't actually believe in it - he probably does - but it means that they wanted to do it in a way that makes a spectacle out of it.

As others have pointed out though, all it's doing is moving up the skillset requirements of people they hire in the future. So while it helps the few people who are already on-board by getting a raise (which is great by itself), it likely wont help an entry level person who now won't be hired in at 70k.

Re: CEO cuts his pay by almost $1M to give his employees big raises

#67

Post by emodendroket » Thu, Apr 16, 2015, 3:44 PM UTC

ukigumo wrote: post #30

bko wrote: post #8

This is a valiant effort but I wonder how the practical allocation of the jobs is determined. If the market salary for an employee is 50k, if you raise it to 70k, you will probably have a lot more applicants than positions. Do the current employees get grand-fathered into the job despite more qualified candidates? When hiring new employees, how do you decide among the increasing rank of equally qualified candidates?…

Is there a direct correlation between higher qualifications and better performance and output? If having two equally qualified employees, is their salary requirement the only decisive distinction? I think this experiment will have quite a few positive net outcomes (publicity, reduction of cost with recruitment and retention, etc) but on the longer run employees making 70k will automatically know that they are on the…

I think that if you're looking at the entire field and see that, in terms of the entire market, you're being well-compensated, you probably wouldn't spend a lot of time being resentful of other people in your company. I guess I could be wrong.

Re: CEO cuts his pay by almost $1M to give his employees big raises

#68

Post by PopsiclePete » Thu, Apr 16, 2015, 3:45 PM UTC

colechristensen wrote: post #58

brianfitz wrote: post #32

I responded to this in a previous thread, but I think I can simplify it down to the perception versus reality of the change the CEO has enacted. What many people believe: The CEO has set a minimum compensation bar to help those with market wages below $70k. What has actually happened: The CEO has determined that going forward, he'd rather hire people with higher market wages and more experience versus paying lower wa…

You know what's terrible? How very unwilling nearly every company is to hire and train inexperienced workers while simultaneously complaining about not being able to find talent.

Especially true in software, isn't it? I kind of get it, though. We tend to jump ship a lot. So a company isn't willing to invest time and money to train me and then I jump ship a year later to greener pastures.

I get that, but at the same time, if I wasn't treated like a disposable cog, maybe I wouldn't jump ship even if I was actively being poached? Just an idea.

Re: CEO cuts his pay by almost $1M to give his employees big raises

#69

Post by JoeAltmaier » Thu, Apr 16, 2015, 3:45 PM UTC

AndrewKemendo wrote: post #66

mattlutze wrote: post #48

Earlier quoted context omitted.

If the effect is that 1. he'll actually take $50,000/year in direct salary, and 2. that all of the call center etc. employees got bumped up to $50k/year immediately, and 3. that, as the article states, it indicates cutting profit from 2MM to 500K, I don't know that I'd call it a publicity stunt.

What then is the purpose of making such a press event out of it? It's clearly them promoting their brand by jumping onto the fairness bandwagon. That doesn't mean the CEO doesn't actually believe in it - he probably does - but it means that they wanted to do it in a way that makes a spectacle out of it. As others have pointed out though, all it's doing is moving up the skillset requirements of people they hire in the…

Why on earth would a janitor position 'move up in skillset requirements'? That's speculation that I don't see supported, and can't quite imagine how it would work.

Re: CEO cuts his pay by almost $1M to give his employees big raises

#70

Post by tixocloud » Thu, Apr 16, 2015, 3:45 PM UTC

colechristensen wrote: post #58

brianfitz wrote: post #32

I responded to this in a previous thread, but I think I can simplify it down to the perception versus reality of the change the CEO has enacted. What many people believe: The CEO has set a minimum compensation bar to help those with market wages below $70k. What has actually happened: The CEO has determined that going forward, he'd rather hire people with higher market wages and more experience versus paying lower wa…

You know what's terrible? How very unwilling nearly every company is to hire and train inexperienced workers while simultaneously complaining about not being able to find talent.

I agree. We went through hundreds of interviewees who didn't pass the coding tests and it really stifled the growth of the company. At the same time, the wage rate being offered was below average because that's what we could afford at the time. I saw some potential in some folks but other team leads felt otherwise. There's a difference between being able to code and not having enough experience in a particular domain to solve the problem in 20 minutes.