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      04-14-2015, 09:46 PM   #1
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Thumbs up CEO Takes 90% Pay Cut To Give Employees HUGE Raises!

Absolutely OUTFUKINGSTANDING! Now THAT is "paying it forward!"

To all of the greedy ass vampires on Wall Street particularly the Banking and Insurance Industry... Take note!

http://money.cnn.com/2015/04/14/news...utceo0520story

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CEO Dan Price took a 90% pay cut and slashed his company's profits just so he could give his employees a raise.

Price, who heads up the Seattle payment processing firm Gravity Payments that he founded, has pledged to make sure all of his staffers make at least $70,000 annually in the next three years.

To do that he's cutting his $1 million salary to $70,000, and dipping into the firm's annual $2 million in profits.

This will double the pay of about 30 of his workers and will mean significant raises for an additional 40.

Price told employees of the new pay policy at a meeting Monday. For several moments there was stunned silence before people broke into applause and high fives said Phillip Akhavan, a merchants relations worker whose $43,000 salary immediately jumped 16% to $50,000.

"It took us a moment to understand what he was saying," said Akhavan. His first call was to his wife, who he said didn't believe him at first.

Nydelis Ortiz, a 25-year old underwriter who only started work there in January called her parents with the news. The family had struggled with homelessness after they moved to the states from Puerto Rico when she was a girl, and Ortiz, who also is now paid $50,000 said she now makes more than both her parents combined.

"My mom cried when I told her," she said. Her $36,000 salary was one of the lowest in the company.

Jason Byrd, 38, had struggled to get by in Seattle on his $40,000 salary as a technician. "This gives us so much freedom to just do our jobs and not have to worry about money," he said. He said he'll save some of his extra pay, and try to pay down some of the $42,000 he owes in student loans. "I almost bought a new Jeep today, then I decided I'll keep driving this one until it dies," he said.

Price said he's the majority owner of the privately-held firm, which he started in his college dorm room 11 years ago. His older brother, who gave him seed money to get started, is the only other stockholder.

"My brother Lucas reacted with caution and questions, but not objections," said Price. He's single so he didn't have to explain his pay cut to a spouse.

Price decided to hike his employees pay after he read a study about happiness. It said additional income can make a significant difference in a person's emotional well being up to the point when they earn $75,000 a year.
gravity payments dan price
Gravity Payments CEO Dan Price.

He'd also been hearing employees talk about the challenges of finding housing and meeting other expenses on their current salary, and decided there shouldn't be such a big gap between his pay as CEO and that of his workers. He described the raises as a "moral imperative."

Price told CNNMoney he isn't the only CEO looking to close the income gap. He's heard from almost 100 other CEO via email and text who say they support his move. "I don't know if we'll see enough to move the needle, but i think people of my generation are committed to making a change."

Price said he'll stick with the reduced paycheck until he can restore Gravity's profits.

"My goal is to get back to previous profit levels within two to three years," he said.

Price said the 50 workers who already earn more than $70,000 were nearly as excited about the news as their lower paid co-workers.

"They are happy that the folks that enable them to be high earners -- their team members -- will be taken care of," Price said.

Customer reaction has also been positive.

"They love our service level and think the team deserves it," he said.

One thing he didn't expect: "We are all surprised at the coverage this is getting," Price said.

News of Price's pay cut was reported earlier by the New York Times.
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      04-14-2015, 09:50 PM   #2
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Just read this. He'll be deluged with people looking for a job now. And I wonder how sustainable this business model will be. I suppose with his huge pay cut, they might be ok considering it's a relatively small company.

Can you see Walmart or McD's doing this? $70k/yr hamburger flipper?
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      04-14-2015, 09:51 PM   #3
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Wow nice! I wouldn't mind working for someone like him.
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      04-14-2015, 09:54 PM   #4
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Geez, the photo of him shocked me. He's only 30! I foresee this happening more with this generation. Also, I think it's a little of a PR stunt, albeit a very respectable one!
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      04-14-2015, 09:56 PM   #5
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Quote:
Originally Posted by M_Six View Post
Just read this. He'll be deluged with people looking for a job now. And I wonder how sustainable this business model will be. I suppose with his huge pay cut, they might be ok considering it's a relatively small company.

Can you see Walmart or McD's doing this? $70k/yr hamburger flipper?
Fuk no. And they shouldn't. The business model is entirely different. He is a "small business owner" who realizes the value (and sacrifice) in doing this.
Huge corporations are all about fattening the execs and stock holders wallets. The biggest way to do this is cut pay/workers or keep the pay at a bare minimum. Salary accounts for the biggest expense for most companies.

But just imagine the benefit if all of the Top 10 Executives at every major corp even dropped to a still very comfy $1M instead of the $30M - $200M they pay themselves now?
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      04-14-2015, 09:57 PM   #6
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Thumbs up

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Originally Posted by BMW F22 View Post
Wow nice! I wouldn't mind working for someone like him.


If I were looking for work, this type of individual would certainly be more than ideal to work for.
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      04-14-2015, 10:11 PM   #7
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Quote:
Originally Posted by bimmette View Post
Geez, the photo of him shocked me. He's only 30! I foresee this happening more with this generation. Also, I think it's a little of a PR stunt, albeit a very respectable one!
Started the company at 19. Smart kid.
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      04-14-2015, 10:12 PM   #8
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Kind of cool, nice job and I love his last name

Needless to say that before Nixon opened the pathway to export jobs to China and other super low wage earning countries, and when we still understood that unions protected the masses rather than being brainwashed into thinking that enormous faceless corporations had the average american's best interest at heart, what Mr. Price is doing wouldn't ever been novel, or even an option.

Until we americans get our apathetic heads out of the sand (un-fucking-likely, given the fact that average families now can't survive without both parents working usually nuts ass hours to get by) we will continue to follow the leaders down well trodden paths of just hardly getting by, getting old and fat and cancerous wondering what the fuck happened and feeling lucky to do so thanks to our bought off media constantly beating our heads into thinking we have this lovely standard of living and USA= #1 whatever the fuck that means.
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      04-14-2015, 10:12 PM   #9
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Originally Posted by M_Six View Post
Started the company at 19. Smart kid.
I swear when I read about young entrepreneurs it makes me feel dumb. Lol
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      04-14-2015, 10:24 PM   #10
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I mean, just SOOOOOOOOOOO surprised of all the coverage this is getting. Rrrrrrrrrrrright...
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      04-14-2015, 10:37 PM   #11
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I mean, just SOOOOOOOOOOO surprised of all the coverage this is getting. Rrrrrrrrrrrright...
Yeah, 1/3rd of my employees make more than me. I don't get any press.
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      04-14-2015, 11:14 PM   #12
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Quote:
Originally Posted by StealYourFace View Post
Kind of cool, nice job and I love his last name

Needless to say that before Nixon opened the pathway to export jobs to China and other super low wage earning countries, and when we still understood that unions protected the masses rather than being brainwashed into thinking that enormous faceless corporations had the average american's best interest at heart, what Mr. Price is doing wouldn't ever been novel, or even an option.

Until we americans get our apathetic heads out of the sand (un-fucking-likely, given the fact that average families now can't survive without both parents working usually nuts ass hours to get by) we will continue to follow the leaders down well trodden paths of just hardly getting by, getting old and fat and cancerous wondering what the fuck happened and feeling lucky to do so thanks to our bought off media constantly beating our heads into thinking we have this lovely standard of living and USA= #1 whatever the fuck that means.
This guy reeeealy gets it.
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      04-15-2015, 02:39 AM   #13
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What a fantastic place to work. Truely, the morale there must be so high. Happy workers are productive workers. They will be giving it their all, to make the processes work and their customer's happy.

Big corporate use negative influence to motivate their staff in current times. It is fantastic to see this small business rewarding staff in a responsible and morally mature manner. Big corporate could learn a great deal from this man. Not necessarily to outright copy this approach - which, as some have said - on a larger scale, is simply impossible to implement. But from a true moral standing, try to implement the ethos of what this man is doing.
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      04-15-2015, 07:59 AM   #14
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      04-15-2015, 11:07 AM   #15
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^^^^ I love that.
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      04-15-2015, 11:43 AM   #16
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Not to say what he is doing is not great it is. However, Salary my be only one part of his compensation even as the owner. A friend of mine had his own business and took a small salary, because he also received a quarterly dividend which was the majority of his compensation. Remember a salary pays fed, SS, medicad, local and state taxes and if you are in the higher tax bracket, that is far more than the 15% for dividends for Feds and some state do not tax dividends.

Also he not doing these people much of service, they now think their skills are worth more and if they want to go somewhere else, no one will pay them that much.
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      04-15-2015, 12:00 PM   #17
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Quote:
Originally Posted by bimmette View Post
Also, I think it's a little of a PR stunt!
+1, I mean the guy is getting international coverage/advertising.
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      04-15-2015, 12:02 PM   #18
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I had read that the raise will be funded by the CEO taking a paycut from $1m/year to $70k/year and from about 85% of the profits.

That's a lot, hope they got a lot of cash in the bank in the event you run into some slow quarters/years down the road. He's basically nuking his margins.
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      04-15-2015, 12:03 PM   #19
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Lightbulb

While we are on the subject...

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Academic research shows that the worker-to-C.E.O. gulf has been widening. According to a 2014 study by Alyssa Davis and Lawrence Mishel at the Economic Policy Institute, a left-leaning advocacy group in Washington with a reputation for rigorous studies, chief executive pay as a multiple of the typical worker’s pay rocketed from an average of 20 times in 1965 to 295.9 in 2013.

Even though the S.E.C. has not approved the rule, that doesn’t mean we can’t calculate rough estimates for C.E.O. pay ratios. So I asked Dean Baker, co-founder of the liberal Center for Economic and Policy Research, to do just that for a dozen of the highest-paid executives.

First, Equilar, the compensation analytics firm in Redwood City, Calif., provided figures on executive compensation in 2014 at a number of the nation’s largest companies. Filings from 64 companies that had submitted their proxies by March 30, 2015, were included in this exercise. Compensation consisted of base salary, cash bonuses, perquisites and the grant-date value of stock and option grants.

Equilar found that among these 64 companies, the median C.E.O. pay package was $11.5 million, down 4 percent from last year. (A subsequent analysis, the Equilar 100 C.E.O. Pay Study, using proxies filed by April 3, found the median package was $14.3 million, an almost 5 percent increase from last year.)

Using the March 30 figures, Mr. Baker, an expert in labor economics, worked with Nicholas Buffie, a research assistant, focusing on the 12 highest-paid executives in the group. They estimated the median wage for all the other employees of each company and compared that with the corresponding C.E.O.’s total 2014 compensation.

These are imprecise and rough estimates. Given the absence of detail companies provide about their work force — such as how many employees work in the United States versus abroad — it is impossible for any outsider to nail down a precise number.

Nevertheless, Mr. Baker said he felt comfortable with the median wage estimates, which were based on figures from Occupational Employment Statistics, a program of the Bureau of Labor Statistics, or from Payscale, a compensation analytics firm in Seattle.

“Clearly the big winners in the economy over the last three to four decades have been those at the top,” Mr. Baker said. “This is one way to illustrate that.”

Several of the companies objected to the figures when asked to comment on them. But only one, Honeywell, provided a precise median wage figure of its own: $58,000, versus the $31,000 that Mr. Baker calculated. Some companies also argued that stock and option grants are paid out over time, not all in one year, skewing pay figures higher for their chief executive.

The company with the widest pay gap on the list was Walt Disney, whose chief executive, Robert Iger, received $43.7 million last year. Given Mr. Baker’s estimate that Disney’s median worker received $19,530 last year, that translates to a C.E.O. multiple of 2,238 to one.

A Disney spokesman said that 92 percent of Mr. Iger’s compensation was based on the company’s financial performance, which was outstanding in 2014.

Second on the list was Satya Nadella, Microsoft’s chief. His pay package of $84.3 million last year placed him at 2,012 times the estimate of $41,900 for the median employee’s earnings at Microsoft.

A Microsoft spokesman disputed the calculation, saying that a typical employee at the company earned “well north of $100,000,” and that much of Mr. Nadella’s pay would be realized only in coming years — if the company performed well. He contended that a better measure of Mr. Nadella’s pay for 2014 was $22.75 million.

Using Microsoft’s figures, Mr. Nadella’s pay ratio would still be at least 150 to one.

Oracle’s founder, Lawrence J. Ellison, ranks third on the pay gap list: 1,183 to one by Mr. Baker’s calculations. Oracle’s spokeswoman declined to comment.

Next up was Steven M. Mollenkopf, chief executive of Qualcomm, whose $60.7 million in compensation puts him at 1,111 times the median worker estimate at the San Diego company, which makes wireless telecommunication equipment and software. A Qualcomm spokeswoman said only $28.7 million of Mr. Mollenkopf’s package should be used for a pay comparison. This would lower his ratio to 526 to 1.

Howard D. Schultz, founder and chief executive of Starbucks, ranked fifth. He received $21.5 million last year, or 1,073 times the typical barista’s salary.


A company spokeswoman said its executive compensation was linked to company performance, “and our board has determined that Howard Schultz’s pay reflects both competitive considerations and value to the company.”

She added that lower-level workers receive a wide array of benefits in addition to their salaries.

After Mr. Schultz, the pay gaps fall to 682 for Richard D. Fairbank at Capital One; 396 for David M. Cote at Honeywell, using its number; 340 for Rupert Murdoch at 21st Century Fox; 316 for Meg Whitman at Hewlett-Packard; 296 for W. James McNerney Jr. at Boeing; 291 for AT&T’s chief executive, Randall L. Stephenson, and 284 for Alex Gorsky, chief executive of Johnson & Johnson.

A Honeywell spokesman said “more than 90 percent of our C.E.O.’s pay is variable, at-risk and long term,” emphasizing profit growth and stock appreciation.

An AT&T spokesman said 92 percent of the C.E.O.’s target compensation was tied to company performance, including stock price. Officials at the other companies declined to comment or didn’t return calls.

Again, these are rough estimates. But without an S.E.C. rule, the public companies that reveal their chief executives’ pay over the next few months will not have to account for the pay ratio comparison with their workers. That’s too bad.

“These C.E.O.s are smart, hard-working people,” Mr. Baker said. “But there is no basis for believing that if companies don’t pay $84 million they won’t attract top talent. You go back 40 years and they had smart, hard-working people too. They were well-paid, but not like they are today.”
http://www.nytimes.com/2015/04/12/bu...=business&_r=0
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      04-15-2015, 12:10 PM   #20
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I've always kept my salary close to my employees, because salary means nothing to a business owner.

If we know about this, then a lot of PR has been done. Don't be so naive.
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      04-15-2015, 12:10 PM   #21
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Quote:
Originally Posted by Maestro View Post
Not to say what he is doing is not great it is. However, Salary my be only one part of his compensation even as the owner. A friend of mine had his own business and took a small salary, because he also received a quarterly dividend which was the majority of his compensation. Remember a salary pays fed, SS, medicad, local and state taxes and if you are in the higher tax bracket, that is far more than the 15% for dividends for Feds and some state do not tax dividends.

Also he not doing these people much of service, they now think their skills are worth more and if they want to go somewhere else, no one will pay them that much.
It doesn't sound like the company is public, but it is still possible for 'stock-holders' to get dividends of sorts from a private company...so it is definitely possible that is the case with this entrepreneur. Plus, as the owner, he has the option to sell his business at any point and make quite a bit of money.

He could be earning only '70k' via his official salary, but still be making a lot more though those dividends/returns.

It's for this same reason that Warren Buffett, despite being one of the world's wealthiest people, does not fall in the highest tax bracket:

http://www.forbes.com/sites/realspin...orkers-pay-21/
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      04-15-2015, 12:14 PM   #22
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Bill Gates for YEARS was only paid $1 in salary. Yet he has annual charity payments far in excess of what I hope to earn in my lifetime (unless I win some lotto or something)
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