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

This is the third time in a week that this article is posted on hn<p>See:<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=9371854" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=9371854</a><p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=9375978" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=9375978</a><p>It seems to be a real hot-button to say the least.

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.<p>What many people believe: The CEO has set a minimum compensation bar to help those with market wages below $70k.<p>What has actually happened: The CEO has determined that going forward, he&#x27;d rather hire people with higher market wages and more experience versus paying lower wage workers.<p>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.

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.

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?<p>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.

Pay? Do thy mean total compensation or salary?<p>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.<p>I don&#x27;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 &quot;social justice&quot;.

This company is not big enough to generate that kind of media attention organically, which tells me they made it into a press event.<p>In that sense it rings hollow because it is clearly a publicity stunt.<p>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.<p>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.

Previously <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=9371854" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=9371854</a>

Henry Ford did something similar a century ago:<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Henry_Ford#The_five-dollar_workday" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Henry_Ford#The_five-dollar_wor...</a>

A question that springs to mind when reading this (and stories like it) is<p>&quot;Could the company have gotten to the point of $2m in profit by starting everyone off at min $50k+?&quot;

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

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

What most people don&#x27;t realize is that, working in a startup, he probably holds a large amount of equities.<p>When&#x2F;If there is an exit, he will cash out a LOT more than his employees. That&#x27;s his real &#x27;bonus&#x27;.<p>In Wall Street&#x2F;corporations, executives are less prone to have exits so they give themselves tremendous bonuses.<p>A totally different case.

Imagine where our species would be if all efforts were contributed to betterment of society. Right now the missing piece to researcher A&#x27;s puzzle is sitting on researcher B&#x27;s bench because company X hasn&#x27;t figured out a way to extract profits yet. If we managed to move toward an Ubuntu(I&#x27;m talking Michael Tellinger not Canonical) contributionist social model we would make more technological advancement in 1 year than we&#x27;ve seen in the past 50, maybe even 100, years. CEO&#x27;s coming to the realization there is more to the human experience than profits is just the start.

Ten bucks says gravity payments will be for sale within a year. This is an obvious PR ploy and I&#x27;m surprised HN is vulnerable to it.

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.<p>It is a violation of a CEO&#x27;s fiduciary responsibility to pay significantly more than market value for anything. That includes salaries.<p>Example: CEO announces the company will pay double for all office supplies. Desks, chairs, computers, etc., the company will pay double market rate.<p>How quickly would he or she get fired?<p>How many people would immediately conclude he or she was irresponsible or nuts?<p>Right.