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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.”

#81

Post by hyperpape »

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…

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 that aren't laying off people. Not with some window to lay them off now, and meet a requirement later.

Support for businesses needs to be designed to help workers.

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

#82

Post by keanzu »

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…

November 2015

120 employees

He revealed to Inc. that he has sold all his stocks, emptied his retirement accounts, and mortgaged his two properties -- including a $1.2 million home with a view of Puget Sound -- and poured the $3 million he raised into Gravity. As majority owner, he is not exactly penniless.

https://www.inc.com/magazine/201511/paul-keegan/does-more-pa...

He's the majority owner of Gravity

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

#83

Post by zaroth »

danans wrote: post #74
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…

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…

Yes, the grant also provides some downside protection on actual compensation, not just employment count.

A vast number companies are hanging on to employees to pay them to do nothing right now. Stores closed, employees who cannot work from home, but still getting a paycheck. These grants basically allow the companies to keep these employees on payroll.

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

#84

Post by keanzu »

outside1234 wrote: post #77

Is he the majority shareholder? If so, is he really making a sacrifice here or just deferring when or how he is getting returns.

November 2015

As majority owner, he is not exactly penniless.

https://www.inc.com/magazine/201511/paul-keegan/does-more-pa...

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

#85

Post by keanzu »

Hitton wrote: post #50

I read about this guy here one month ago. Some commenters were claiming that he is doing it for PR. https://news.ycombinator.com/item?id=22441129 https://news.ycombinator.com/item?id=22441354

Every twitter post by every corporation/majority owner/CEO/founder ever is done for PR.

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

#86

Post by SpicyLemonZest »

kitotik wrote: post #80
ViViDboarder wrote: post #57

Earlier quoted context omitted.

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.

I don't think it's fair to call it a trickle-down experiment. We're bailing out companies because we think it would be bad for society if they all went bankrupt, not because we expect that money to trickle down as such.

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

#87

Post by danans »

zaroth wrote: post #83
danans wrote: post #74

Earlier quoted context omitted.

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…

Yes, the grant also provides some downside protection on actual compensation, not just employment count. A vast number companies are hanging on to employees to pay them to do nothing right now. Stores closed, employees who cannot work from home, but still getting a paycheck. These grants basically allow the companies to keep these employees on payroll.

Downside protection to whom?

A significant amount of the terms of the loan forgiveness rely on employers "doing the right thing" by their employees: not docking their pay up to 25% while still claiming the full loan forgiveness. So in this case the lender and the employees are holding the bag for that 25%.

Why allow the employers to convert the full loan to a grant while reducing employee pay? Looking at it the other way, why wouldn't an employer reduce employee pay by up to 25% when they can pocket the difference?

Like I said, we'll see how that works out.

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

#88

Post by goatherders »

FillardMillmore wrote: post #64
goatherders wrote: post #47

Are we really patting people on the back for cutting their own pay to allow employees to be paid more? That's how economics work: if you want to pay X then you have to find that money somewhere.

I did not downvote you, but paying people more is not a zero-sum game. The pay rate of an employee is not necessarily contingent on the salary of a CEO. More money can be attained through the creation of value in an economy - this value will add wealth - this added wealth could allow for both the employee and the CEO to be paid more.

Agree completely. It's a nice gesture that the CEO cut his pay but - in agreement with you - there are lots of ways to increase employee pay.

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

#89

Post by keanzu »

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.

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 to parlay a tsunamic reaction of 500M social media interactions into a 16yo company whose finances are in need of slashing the CEO's salary to zero.

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

#90

Post by SpicyLemonZest »

rsync wrote: post #71
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, t…

The $1 earners put a lot more than $1 on their W2s. Zuckerberg for example has $1 salary, $0 stock, and $22 million "other compensation" including security and jet costs.
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