from Hacker News

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

by lavamantis on 4/16/15, 2:33 PM with 102 comments

• by sickpig on 4/16/15, 3:25 PM

  This is the third time in a week that this article is posted on hn

  See:

  https://news.ycombinator.com/item?id=9371854

  https://news.ycombinator.com/item?id=9375978

  It seems to be a real hot-button to say the least.

• by brianfitz on 4/16/15, 3:22 PM

  I responded to this in a previous thread, but I think I can simplify it down to the perception versus reality of the change the CEO has enacted.

  What many people believe: The CEO has set a minimum compensation bar to help those with market wages below $70k.

  What has actually happened: The CEO has determined that going forward, he'd rather hire people with higher market wages and more experience versus paying lower wage workers.

  Over the next few years, the company will slowly shift to one with a more experienced workforce. This could pay off, and would not be that unusual. What is different is he drew a specific line in the sand and grandfathered in his hires prior to the change.

• by icpmacdo on 4/16/15, 2:48 PM

  Given this is the fourth time I have seen this on the front page I think it must be worth it for the free advertising alone.

• by bko on 4/16/15, 2:58 PM

  This is a valiant effort but I wonder how the practical allocation of the jobs is determined. If the market salary for an employee is 50k, if you raise it to 70k, you will probably have a lot more applicants than positions. Do the current employees get grand-fathered into the job despite more qualified candidates? When hiring new employees, how do you decide among the increasing rank of equally qualified candidates?

  That being said, a bump in pay will almost certainly help reduce costs associated with retention and retraining and may turn out to be a good business decision, not to mention the publicity.

• by IanDrake on 4/16/15, 3:02 PM

  Pay? Do thy mean total compensation or salary?

  There are too many stories of CEOs dropping their salary to $1 just to find out later they got huge bonus, stock, and option grants.

  I don't care how much CEOs make. I do care about the bogus self congratulatory PR stunts meant to dupe the heard into thinking this company is inline with their thoughts on "social justice".

• by AndrewKemendo on 4/16/15, 3:23 PM

  This company is not big enough to generate that kind of media attention organically, which tells me they made it into a press event.

  In that sense it rings hollow because it is clearly a publicity stunt.

  I think this is a general issue with all of these activities, and really any activity in a company, that you shape the message that you want to send to the world rather than there being an accurate representation of what is actually happening.

  I wonder if there is a way technologically to bring radical transparency to the workplace so that this kind of stuff is discoverable without the company needing to put out press on it.

• by blfr on 4/16/15, 3:18 PM

  Previously https://news.ycombinator.com/item?id=9371854

• by jamiesonbecker on 4/16/15, 3:47 PM

  Henry Ford did something similar a century ago:

  https://en.wikipedia.org/wiki/Henry_Ford#The_five-dollar_wor...

• by mgkimsal on 4/16/15, 3:34 PM

  A question that springs to mind when reading this (and stories like it) is

  "Could the company have gotten to the point of $2m in profit by starting everyone off at min $50k+?"

• by mhassaan on 4/16/15, 3:54 PM

  This blunt move can get him loyalty in return ,which itself is a requirement for taking his business one step ahead .

• by crimsonalucard on 4/16/15, 2:52 PM

  What about options? Does the CEO get options that raise his wage to a height that is still unfair?

• by dataker on 4/16/15, 3:41 PM

  What most people don't realize is that, working in a startup, he probably holds a large amount of equities.

  When/If there is an exit, he will cash out a LOT more than his employees. That's his real 'bonus'.

  In Wall Street/corporations, executives are less prone to have exits so they give themselves tremendous bonuses.

  A totally different case.

• by AC__ on 4/16/15, 3:13 PM

  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 we've seen in the past 50, maybe even 100, years. CEO's coming to the realization there is more to the human experience than profits is just the start.

• by chatmasta on 4/16/15, 2:53 PM

  Ten bucks says gravity payments will be for sale within a year. This is an obvious PR ploy and I'm surprised HN is vulnerable to it.

• by rebootthesystem on 4/16/15, 3:31 PM

  Despite the feel-good angle on this it is a horribly bad and irresponsible decision. Now, if they only have a couple of people doing just below $70K it is a dishonest yet clever marketing move.

  It is a violation of a CEO's fiduciary responsibility to pay significantly more than market value for anything. That includes salaries.

  Example: CEO announces the company will pay double for all office supplies. Desks, chairs, computers, etc., the company will pay double market rate.

  How quickly would he or she get fired?

  How many people would immediately conclude he or she was irresponsible or nuts?

  Right.