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.<p>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 (i.e., a free bailout from the Federal government).<p>My personal opinion is that giving free money to companies is a terrible idea, and they should just give helicopter money to individuals. Companies are going to engineer this to their maximum benefit, and the amount of money going to companies is much much greater than the amount going to individuals.<p>Interesting times we live in. It's important to ignore what people say, and instead focus on what they actually do.
Stewart Butterfield (Slack CEO) was asked if he'd commit to not doing layoffs and I appreciated his response[1]. Effectively pointing out that it's easy to just say yes in their position, and that it's presumptuous of Salesforce to be asking for no-layoff pledges. It's pretty meaningless and comes off as shallow or self-serving PR for types of businesses that are doing better than ever right now or can easily weather the event.<p>The CEO of Texas Roadhouse, a chain of restaurants, gave up his salary and bonuses to redirect to employees[2]. A particularly noteworthy example, I think.<p>1. <a href="https://youtu.be/3aVh0QYPtVI?t=427" rel="nofollow">https://youtu.be/3aVh0QYPtVI?t=427</a><p>2. <a href="https://abc13.com/6052453/" rel="nofollow">https://abc13.com/6052453/</a>
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.
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?<p>Cutting $70k only helps one person keep their job. How many employees do they have?<p>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 people ahead of the business in this time.
I don't know much about this guy but when I hear a founder CEO cutting his pay to $0, I have to roll my eyes. Vast majority of CEO comp is in equity so cutting base pay to $0 has no material meaning. In addition, successful founder CEOs have typically already cashed out to the tune of millions of dollars while still retaining significant stock. With that much cash in the bank + ownership stack, the annual salaries or bonuses are icing on the cake. No CEO without a significant ownership stack is going to settle with $0 or even $70k.
There are a bunch of tech CEOs who pay themselves one dollar. <a href="https://thehustle.co/1-ceo-salary/" rel="nofollow">https://thehustle.co/1-ceo-salary/</a>
I wonder why we aren't hearing about companies selling more stock for funding. Sure it's at a huge discount, but better dilution than destruction, right? Is it just because the bailout loans offer them a better path? Or because they'd rather lay folks off than dilute?
For some companies the choice is between laying off some workers now, or all workers a few months from now.<p>Large companies with cash in the bank may not have this problem, but small businesses often only have a few months of runway.
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 read about this guy here one month ago. Some commenters were claiming that he is doing it for PR.<p><a href="https://news.ycombinator.com/item?id=22441129" rel="nofollow">https://news.ycombinator.com/item?id=22441129</a><p><a href="https://news.ycombinator.com/item?id=22441354" rel="nofollow">https://news.ycombinator.com/item?id=22441354</a>