CEO cuts his own salary by 90% to increase pay of every worker

[newflesh]

http://www.independent.co.uk/news/world/americas/seattle-ceo-dan-price-cuts-own-salary-by-90-to-pay-every-worker-at-least-70000-10177261.html


A chief executive has announced plans to raise the salary of every single employee at his company to at least $70,000 (£47,000) – and will fund it by cutting his own salary by 90 per cent.

Dan Price, the CEO of Seattle-based tech company Gravity Payments, gathered together his 120-strong workforce on Monday to tell them the news, which for some will mean a doubling of their salary.

Seattle was already at the heart of the US debate on the gulf in pay between CEOs and ordinary workers, after the city made the ground-breaking decision to raise the minimum wage to $15 (£10.16) an hour in June.

But Mr Price, 30, has gone one step further, after telling ABC News he thought CEO pay was “way out of whack”.

To facilitate the change, Mr Price will reduce his own wage from about $1 million to the new minimum of $70,000.

In order not to bankrupt the business, those on less than $70,000 now will receive a $5,000-per-year pay increase or an immediate minimum of $50,000, whichever is greater.

The target is for everyone to be on $70,000 by December 2017, while Mr Price has pledged not to increase his own pay until Gravity’s profits return to or exceed last year’s $2.2 million.

The New York Times, which was there for the Wolf of Wall Street-esque announcement, reported that Mr Price shouted: “Is anyone else freaking out right now?” after the cheering died down. “I’m kind of freaking out,” he added.

Mr Price told ABC News: “My salary wasn't $1 million because I need that much to live, but that's what it would cost to replace me as a CEO.

“It ended up impacting me, because I want the company to be sustainable even if something happens to me.”

As much as I’m a capitalist, there is nothing in the market that is making me do it.

Fair play to him, can't see many other CEO's adopting the same payment structure

[AtheistAKASaneBrain]

If all CEO's did the same maybe the guys at the bottom wouldn't feel like exploited slaves. He can still keep living like a king while the overall life quality of his employees improve.

[Lethn]

The sad thing is even if all CEO's did this it still wouldn't fix the biggest problem which is hyperinflation but good look getting people to take a look at things more closely.

[Snail2]

Nice one... and clever. Those guys are going to work much harder to keep those jobs .

[waterpile]

Now thats what we call a true role model and a leader, I only wish that people who are in these positions would do the same to their employees.

[freemind1]

If others do the same would live in a totally different to this world. There would be fewer slaves and more decent jobs for citizens.

[neoneros]

While in other news, bankers in the Netherlands had been called back by the government when they got themselves a bonus of € 100.000,- .

The way money works in a lot of ways is very crooked and distorted. A CEO has more responsibility, but the rewards have gone crazy, a company does not exist merely by the grace of the CEO.

It is nice to see these kind of changes, other companies allready levelled payment and involve every employee in how to run the company, it is a change that is coming. We have a skewed economy where we work because we need the money, not the product we produce, we produce a lot of junk only to provide us with money. Work is created only to provide a means to earn. It is a lot of time wasted on things we do not need.

I sit at my desk for eight hours, not daring to think about how many of those hours are realy productive and contributing to a better world. Why not pay me eight and let me work the time I realy need? The whole working economy is lie we tell ourselves.

[Sithara007]

http://www.independent.co.uk/news/world/americas/seattle-ceo-dan-price-cuts-own-salary-by-90-to-pay-every-worker-at-least-70000-10177261.html


A chief executive has announced plans to raise the salary of every single employee at his company to at least $70,000 (£47,000) – and will fund it by cutting his own salary by 90 per cent.

Dan Price, the CEO of Seattle-based tech company Gravity Payments, gathered together his 120-strong workforce on Monday to tell them the news, which for some will mean a doubling of their salary.

Seattle was already at the heart of the US debate on the gulf in pay between CEOs and ordinary workers, after the city made the ground-breaking decision to raise the minimum wage to $15 (£10.16) an hour in June.

But Mr Price, 30, has gone one step further, after telling ABC News he thought CEO pay was “way out of whack”.

To facilitate the change, Mr Price will reduce his own wage from about $1 million to the new minimum of $70,000.

In order not to bankrupt the business, those on less than $70,000 now will receive a $5,000-per-year pay increase or an immediate minimum of $50,000, whichever is greater.

The target is for everyone to be on $70,000 by December 2017, while Mr Price has pledged not to increase his own pay until Gravity’s profits return to or exceed last year’s $2.2 million.

The New York Times, which was there for the Wolf of Wall Street-esque announcement, reported that Mr Price shouted: “Is anyone else freaking out right now?” after the cheering died down. “I’m kind of freaking out,” he added.

Mr Price told ABC News: “My salary wasn't $1 million because I need that much to live, but that's what it would cost to replace me as a CEO.

“It ended up impacting me, because I want the company to be sustainable even if something happens to me.”

As much as I’m a capitalist, there is nothing in the market that is making me do it.

Fair play to him, can't see many other CEO's adopting the same payment structure

That's really heart touching. By this move, the employees of his company will really love to work him.
Thanks for sharing this with us.

[Lethn]

I sit at my desk for eight hours, not daring to think about how many of those hours are realy productive and contributing to a better world. Why not pay me eight and let me work the time I realy need? The whole working economy is lie we tell ourselves.  

That's precisely why the economies are crashing now, it isn't to do with wage income disparity as so many people claim though that is a symptom of the problem it's not the whole cause, it's the fact that the companies you work for don't do anything anymore and build on civilisation. That's happening all in the so called third world countries, China is out-producing almost every country in the world, I think they overtook America a lot earlier than American media cares to admit.

I don't disparage office work as I do quite a bit of it myself as you guys can probably tell but the stuff that genuinely affects peoples lives and creates products that people want to pay money for it is what people at the shop floors etc. and work benches are doing. The problem is, both the left and the right have equally demeaned these positions, the left say that the workers need the salaries and jobs of the managers and an annoying number in the right claim it's all about immigration and evil socialism.

Even if this poor guy cut his salary to $1 the rest of the economy is still fucked and his company will be out of clients this year because he relies on people that don't follow his business model, the best thing he could do is make sure he finds people to work for overseas because that's where all the money is now.

[herzmeister]

https://en.wikipedia.org/wiki/Mondragon_Corporation


The Mondragon Experiment - Corporate Cooperativism (1980) FULL
https://www.youtube.com/watch?v=-obHJfTaQvw

[panju1]

You can do this in a company with 120 people, not with 12,000 people. 
Companies have to cut costs to be competitive.

[ashour]

Those are just PR moves for publicity with a nice side effect for his employees, he probably has tons of  stocks of his company which will be worth more than the salary he is taking. Mark Zuckerberg's salary is around $1 per year  but his is net worth around $30 bl. He will play the ling game and wait until the company goes public on a stock exchange and then he will cash out

[Mikestang]

Would love to see the pay differentials in all industries get reduced.  The people at the bottom are the ones doing all the work and making all the money, they deserve more of the profit.

[neoneros]

You can do this in a company with 120 people, not with 12,000 people. 
Companies have to cut costs to be competitive.

a company of 120 might have a smaller gap between the CEO and the lowest paid employee. A company of 12.000 people will have a gap that will be 100 times more larger, it is a bigger loss for the smaller companies CEO than it would be for the board of directors of the big company.

In the same light, at an annual shareholders meeting a dutch employee illustrated the gap http://www.ad.nl/ad/nl/1012/Nederland/article/detail/3958824/2015/04/16/Vakkenvuller-AH-plande-statement-in-het-geheim-met-FNV.dhtml (in dutch) He stripped half of his suit to illustrate his point he has to work for 226 years to earn what the CEO earned in a year.

that is a 1:226 gap for the over 12.000 people company and the OP's company has a 1:14 gap,

Mondragon tries to maintain a 1:9 gap.