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

latimes.com

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

#91

Post by a_c_s »

cookiecaper wrote: post #89
a_c_s wrote: post #84

Earlier quoted context omitted.

The NYTimes article clearly states that this was motivated by concerns about inequality rather than shifting what kind of people are hiring. If you have a source that contradicts this, it would be great to see it. "His idea bubbled into reality on Monday afternoon, when Mr. Price surprised his 120-person staff by announcing that he planned over the next three years to raise the salary of even the lowest-paid clerk, c…

Sometimes we don't reveal our true motives to The New York Times.

Sure, but without a source this is just baseless cynicism.

HN is supposed to be a place for intelligent discussion: giving unsourced cynicism equal weight as evidence is creating an echo chamber for pseudo-intellectuals to parrot their beliefs.

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

#92

Post by dllthomas »

chatmasta wrote: post #36
dragonwriter wrote: post #25

Earlier quoted context omitted.

> The problem is it's unsustainable. The employees aren't providing $70k of market value. How do you know this? Sure, if you make the assumption that the before this one change, the world worked perfectly in line with the kind of simplifying assumptions that you might see in an Econ 101 class, then that would be true, but then, if the world worked that way, this raise wouldn't have happened .

Because they were willing to work for $40k.

Ignoring a lot of caveats, that means that the labor they were providing was worth less than $40k to them. It says nothing about how much the labor was worth to the company. That the company was willing to pay them $40k says their labor was, with similar caveats, worth at least $40k but there is no implied upper bound.

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

#93

Post by ukigumo »

ryandrake wrote: post #88
ukigumo wrote: post #30

Earlier quoted context omitted.

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…

Imagine if you were paid $500K/yr, but you knew it was the lowest salary paid to anyone in your company. How would that affect your morale? I know, personally, I would go home from work every night, absolutely thrilled at being the lowest paid person in my company :)

As an employee, your compensation is always tied to your notion of self-worth, or so I believe. Granted that the 70k seems like a very good salary for most entry level and some of the mid-level positions at any company but I think that the perception would change over time.

Let's say you are a developer making 70k and you know the receptionist makes at least the same. Or imagine you were paid 5K/yr and you knew you were paid the same as the CEO. Would you be happy with that too?

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

#94

Post by AC__ »

pc86 wrote: post #26
AC__ wrote: post #22

Imagine where our species would be if all efforts were contributed to betterment of society. Right now the missing piece to researcher A's puzzle is sitting on researcher B's bench because company X hasn't figured out a way to extract profits yet. If we managed to move toward an Ubuntu(I'm talking Michael Tellinger not Canonical) contributionist social model we would make more technological advancement in 1 year than…

I think they've tried that in a couple places already.

Please don't conflate contributionism with socialism or communism.

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

#95

Post by crimsonalucard »

Rainymood wrote: post #76
CapitalistCartr wrote: post #5

Earlier quoted context omitted.

"Price, who started Gravity Payments out of a dorm room when he was 19, wholly owns and operates the company . . . " Besides, what is fair?

No it's not fair, he doesn't deserve that company he put his whole life in! Nobody deserves such a thing! \s

Makes perfect sense. Because his company isn't built on the shoulders of multitudes of employees. He alone built the entire company with his bare hands and his "LIFE". Therefore all employees deserve nothing and he deserves 100%.

\s

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

#96

Post by threatofrain »

a_c_s wrote: post #91
cookiecaper wrote: post #89

Earlier quoted context omitted.

Sometimes we don't reveal our true motives to The New York Times.

Sure, but without a source this is just baseless cynicism. HN is supposed to be a place for intelligent discussion: giving unsourced cynicism equal weight as evidence is creating an echo chamber for pseudo-intellectuals to parrot their beliefs.

Or is this baseless trust of a CEO in an interview with the New York Times? Surely what you propose is not a trust model for a robust organism.

Also, because somebody doubted the honesty of a CEO, you decide to talk about how they are a pseudo-intellectual in an echo chamber who parrots their baseless cynicism?

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

#97

Post by ukigumo »

emodendroket wrote: post #67
ukigumo wrote: post #30

Earlier quoted context omitted.

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.

That would be definitely the case if your salary is way above market standards, but if ~70k is around what you would be making anywhere else, then it would like be a stress factor.

I mean, this is just a supposition I'm making. Maybe all salaries raise in line with the minimum.

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

#98

Post by ukigumo »

cookiecaper wrote: post #65
ukigumo wrote: post #30

Earlier quoted context omitted.

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 se…

That could be one way of doing things (all salaries raise in proportion to the minimum). It would make the company highly attractive for prospective employees and raise the stakes for current staff so would be an interesting "experiment".

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

#99

Post by officemonkey »

Shivetya wrote: post #50
officemonkey wrote: post #27

Earlier quoted context omitted.

Think about it: how much does the lowest paid staffer make there? 25,000? 30,000? These lower-paid staff will be very loyal, because they're getting a very significant and possibly life-changing raise. They're not going to quit on you, and they're not going to kill the golden goose. Recruitment has real costs. Hiring and training, and dealing with the hiring mistakes you make, all cost money. Having a happy staff sav…

can we really make this assumption? if everyone is paid the same where is the incentive to do more? how is morale affected in the reverse when you know you make as much as someone else who decides to slack? while there are some benefits to increasing salary very large increases may negatively affect those already at a higher pay scale and some may dissociate effort with reward. now if you dangle the carrot out there…

>if everyone is paid the same where is the incentive to do more? how is morale affected in the reverse when you know you make as much as someone else who decides to slack?

The U.S. federal government has this in spades. Lots of people making the same salary, and no incentive to do more, and no way to weed out poor performers. Yet the government bureaucracy is still able to perform, sometimes admirably.

The private sector has an important tool: fire the slackers. If someone is not performing well at a higher-than-average salary: lay 'em off. Hire someone motivated to perform and make a higher-than-average salary.

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

#100

Post by mattlutze »

JoeAltmaier wrote: post #61
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.

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

Only part of the total cash needed to make the raises will come from his salary; the other 1.5MM, apparently, will come from profits.
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