And the CEO of the year award goes to....

Owner of a Credit Card Processor Is Setting a New Minimum Wage: $70,000 a Year

"Gravity Payments founder Dan Price surprised his 120 employees Monday: After reading that money fluctuations are a big problem for those earning less than $70,000, he decided to make that the minimum wage for all the employees at his credit-card payment-processing company. To do so, Price cut his own salary from $1 million to $70,000 (CEOs make on average 300 times an average company salary), and plans to cut into company profit. Thirty people at Gravity will see their salaries double as a result."

And the award for hr department that suddenly hates their CEO due to flood of applications and calls.....

I'll be interested to see how sustainable that is.

In reply to mndsm:

And the impossible search for another replacement CEO with a $70k/yr salary......

There are still humans running companies. At least one.

In reply to mndsm:

If an HR drone is cranky because people want to work there then they should find somewhere else to be.

yamaha wrote: In reply to mndsm: And the impossible search for another replacement CEO with a $70k/yr salary......

Don't worry, I'm sure he didn't give up his bonuses. Think back to all the CEOs taking $1 salaries. Plenty of stocks/options/bonuses to keep their lifestyles at 300% of the rest of us.

That is a great PR move. Didn't Ross Perot do something like that to snag a few headlines way back? Capping the top salary at $100k or something like that.

Wait till the guy who was making $70k before this now gets no raise while the peeps making $35k before get an 100% raise. People will always find a way to bitch and moan about anything, no matter how good it seems.

I figure a good number of the people having a hard time coming up with their rent money will be in the same situation 5 years from now, just paying more for rent because they moved to a larger place or to a better neighborhood.

Sounds like the CEO is an interesting young man who's made his mark on the world already. Good to hear it.

The article wrote: "Gravity Payments founder Dan Price surprised his 120 employees Monday: After reading that money fluctuations are a big problem for those earning less than $70,000, he decided to make that the minimum wage for all the employees at his credit-card payment-processing company... Thirty people at Gravity will see their salaries double as a result."

So... how do the remaining 90 employees feel about getting much smaller (or no) raises than the 30 who got 100%?

Duke wrote: So... how do the remaining 90 employees feel about getting much smaller (or no) raises than the 30 who got 100%?

who cares?

why are we always so concerned about somebody else doing better for themselves? It doesn't in any way actually impact us negatively.

People can find a way to complain about anything though.

Duke wrote: I'll be interested to see how sustainable that is.

Well, just doing the raw math- cutting just the CEO's salary down will raise (on average) 42 employees to the new target. The remaining 58 employees need $1.144M to get a raise- and since they made over $2M in profits, it's not hard to find that money. Since the company is also private, the group of people to convince to do that is small enough do work with, too.

So now you have an entire staff that is unlikely to turn over- which saves money. And they are happer, since a major burden has been lifted. Which makes more money, as they will probably work harder.

That's not even considering any of the other major managers if they are willing to take a pay cut.

Certainly not that hard to do.

Duke wrote:

The article wrote: "Gravity Payments founder Dan Price surprised his 120 employees Monday: After reading that money fluctuations are a big problem for those earning less than $70,000, he decided to make that the minimum wage for all the employees at his credit-card payment-processing company... Thirty people at Gravity will see their salaries double as a result."

So... how do the remaining 90 employees feel about getting much smaller (or no) raises than the 30 who got 100%?

While the CEO did say HIS salary went down to $70k, he never said $70k was also the MAXIMUM wage there, so those other people could still be making more than $70k.

xflowgolf wrote:

Duke wrote: So... how do the remaining 90 employees feel about getting much smaller (or no) raises than the 30 who got 100%?

who cares? why are we always so concerned about somebody else doing better for themselves? It doesn't in any way actually impact us negatively. People can find a way to complain about anything though.

Because they're NOT doing better for themselves. Someone is doing better FOR THEM. There's a subtle difference.

Duke wrote:

xflowgolf wrote:

Duke wrote: So... how do the remaining 90 employees feel about getting much smaller (or no) raises than the 30 who got 100%?

who cares? why are we always so concerned about somebody else doing better for themselves? It doesn't in any way actually impact us negatively. People can find a way to complain about anything though.

Because they're NOT doing better for themselves. Someone is doing better *FOR THEM*. There's a subtle difference.

And that matters how?

Not only is it good PR, he's just made a couple of good business decisions: 1) employee turnover is going to drop like a rock thus saving training etc $ 2) productivity per person will probably rise, restoring the profit margin.

alfadriver wrote:

Duke wrote:

xflowgolf wrote:

Duke wrote: So... how do the remaining 90 employees feel about getting much smaller (or no) raises than the 30 who got 100%?

who cares? why are we always so concerned about somebody else doing better for themselves? It doesn't in any way actually impact us negatively. People can find a way to complain about anything though.

Because they're NOT doing better for themselves. Someone is doing better *FOR THEM*. There's a subtle difference.

And that matters how?

Because it could strongly affect morale among those who aren't benefiting as much. It may not, too. Hence my question.

T.J. wrote: Wait till the guy who was making $70k before this now gets no raise while the peeps making $35k before get an 100% raise. People will always find a way to bitch and moan about anything, no matter how good it seems.

That's the real "crabs in a bucket" mentality. People often use the analogy to deride those who dislike being exploited, but this is a situation where it properly applies.

This is quite sustainable, there is enough money going around to multiply minimum wages around the world. The money is there, but it's being dumped into Swiss bank accounts in an attempt to post a high score on the Forbes list.

"The future is already here — it's just not very evenly distributed." - William Gibson

Furthermore a sub-livable minimum wage works as a subsidy to all companies who employ minimum wage workers - somebody has to make up the shortfall to keep those workers from becoming homeless, whether it's the government (using your tax money), family or friends.

In reply to Duke:

I agree. I would not work for a company that arbitrarily set everyone's salary the same. I'd rather have the opportunity to excel on merit than stagnate at a glass ceiling. I mean, if I was the secretary at the front desk... $70k? berkeley YEAH! but how about the guy who is engineering their network security? He just put in his resignation.

I'm glad the guy is trying something new but what that says to every innovator looking to be paid for his successes is "Do not come here".

EDIT: Now that I'm thinking about it... What this probably is - is great spin on "Hey, everyone making more than $70k, please quit. Like, GTFO. We want to use a contractor based model for tech and management to avoid Obamacare".

Giant Purple Snorklewacker wrote: I agree. I would not work for a company that arbitrarily set everyone's salary the same. I'm glad the guy is trying something new but what that says to every innovator looking to be paid for his successes is "Do not come here".

Again, show where he said that $70k was the MAX he'd pay people. This is the MINIMUM wage there now.

In reply to Chris_V:

Actually... you are right. I got that from somewhere above, not the article. Nevermind. Carry on.

Giant Purple Snorklewacker wrote: In reply to Chris_V: Actually... you are right. I got that from somewhere above, not the article. Nevermind. Carry on.

Even without the incorrect assumption of a maximum salary cap, your point is still valid.

I'm curious of two things: Is this sustainable, and who follows? Companies like this, Costco, etc. are doing what I want every company to do: Socialism by the actions of the people, not the government. Ford did it, and it worked. A lot of people forgot about that, and the situations are different, but there are a lot of similarities too.

If I were there, well my salary would be increased, so I'd be happy. If it wasn't, I'd take a look at what I was making and ask if that was a fair amount for the work and value I do and provide. If it is, Happy Day, since everybody else will be happier around me. If it isn't, then if I don't get the raise in the next pay evaluation I'd be looking elsewhere.

Frankly, the guy who worries about what his neighbor is being paid isn't a guy I want working at my company. I want employees to be worried about them and their work--and if they are worried about their neighbors, it should be that they are doing well.

GameboyRMH wrote: Furthermore a sub-livable minimum wage works as a subsidy to all companies who employ minimum wage workers - somebody has to make up the shortfall to keep those workers from becoming homeless, whether it's the government (using your tax money), family or friends.

In most places in this country, you can actually have a decent living on $35k/yr.....which if I read the article correctly, was what the lowest paid there received before hand. Sure, you can't buy a giant 4 bedroom house in the Hamptons, a shiny new Benz every year, family season tickets for the Red Sox, and so on.....but 35k is by no means knocking on requiring government assistance in most of the US.

That observation noted, what was your point with what I quoted?

Duke wrote:

Giant Purple Snorklewacker wrote: In reply to Chris_V: Actually... you are right. I got that from somewhere above, not the article. Nevermind. Carry on.

Even without the incorrect assumption of a maximum salary cap, your point is still valid.

Only valid if the innovator looking to be paid for his successes, is in fact NOT being paid for his successes, or would be paid substantially more at another place.