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Seattle CEO Who set Company Minimum Salary at $70k/yr Struggling

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posted on Aug, 3 2015 @ 12:14 AM
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According to this New York Times article, Mr. Price lost 2 employees out 120.

As FyreByrd stated back on page3, they probably weren't the right fit for this company's culture. I doubt he has any trouble filling the positions. Many people would be thrilled to work, and work hard, for a company who values every member of the team.

The publicity is already generating new business:

Three months before the announcement, the firm had been adding 200 clients a month. In June, 350 signed up.


I think this is a shrewd business move, and the right way to run a business.




posted on Aug, 3 2015 @ 12:19 AM
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I'd be interested to see what his auditors thought of his move. Was it budgeted into the years labor plan?

The "Revenue Per Employee" is about 158k. The 70k salary, if applied across the board excepting some small increases for the board and executive team, would equate to about 50% of gross operating revenue. That isn't too bad...but it should be in the 40-45% range, including payroll tax and insurance (if that benefit is offered).

2014 sales reveue is down by about 20% from 2 years prior...that is significant.

Gross income is down 80% in the same time. Meaning: they are making less and spending more.

He can't sell shares fast enough to be in the black on his bottom line for hte last 2 years (losing 5.7mil in 2014).

And in the middle of this, he took the extraordinary step to give pay increases that were not in any way supported using conventional wisdom or common/accepted practice (i.e., they aren't merit or longevity based).

Yup....sounds to me like his shareholders will be suing him and his board of directors by the end of 2015.

Source for above information:

www.marketwatch.com...



posted on Aug, 3 2015 @ 12:20 AM
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a reply to: Olivine

As FyreByrd stated back on page3, they probably weren't the right fit for this company's culture.
Yeah, who cares about most valued employees? Price?

Two of Mr. Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raise


She helped calculate whether the firm could afford to gradually raise everyone’s salary to $70,000 over a three-year period, and was initially swept up in the excitement. But the more she thought about it, the more the details gnawed at her.

“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” she said. To her, a fairer proposal would have been to give smaller increases with the opportunity to earn a future raise with more experience.

A couple of days after the announcement, she decided to talk to Mr. Price.

“He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”

Already approaching burnout from the relentless pace, she decided to quit.

www.nytimes.com...



edit on 8/3/2015 by Phage because: (no reason given)



posted on Aug, 3 2015 @ 12:26 AM
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originally posted by: Olivine
According to this New York Times article, Mr. Price lost 2 employees out 120.

As FyreByrd stated back on page3, they probably weren't the right fit for this company's culture. I doubt he has any trouble filling the positions. Many people would be thrilled to work, and work hard, for a company who values every member of the team.

The publicity is already generating new business:

Three months before the announcement, the firm had been adding 200 clients a month. In June, 350 signed up.


I think this is a shrewd business move, and the right way to run a business.



Sure, if you want just one of the endless masses of people.

Me? I sure won't work for a place that pays me the same as my peers. I outperform...thats just what i do. I don't turn it off...its just how i work. But i outperform those i work with consistently, and have always been rewarded for that effort. If i had to drag dead weight along, and get paid the same as the dead weight...there'd be problems.

Something else to consider: i work in an entrepreneurial corporation. We manage our own business units with complete authority (and accountability). If one of my peers is slacking, it puts my job at risk. Because part of the entrepreneurial strategy is that we sink or swim together. No excuses...either succeed or fail. I spent the first year dragging dead weight along. I don't have them to worry about anymore....but they cost me thousands in income before we got it fixed. To think that all our efforts were equal is laughable.

ETA: RE the "shrewd business move"...see my prior post. They can put lipstick on that old sow, but she'll still be a pig.
edit on 8/3/2015 by bigfatfurrytexan because: (no reason given)



posted on Aug, 3 2015 @ 12:26 AM
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a reply to: Phage

That was her choice.

Was she unhappy with her compensation prior to the lower paid employees getting a raise? If not, that just makes her seem ugly.



posted on Aug, 3 2015 @ 12:34 AM
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a reply to: bigfatfurrytexan

I don't understand where this idea comes from that all of the lower paid employees that got the big raises were slackers, or dead weight. I find it hard to imagine lazy workers being tolerated in a small, high-energy company.

This seems to me, that it was your typical, folks in the office making more money than the clerks, or the technicians in the field, scenario.

Then Mr. Price raised the pay to his lowest compensated workers, because he was trying to lower the stress in their lives.
edit on 8/3/2015 by Olivine because: refining

edit on 8/3/2015 by Olivine because: I'm sleepy, and clearly unable to type a coherent sentence



posted on Aug, 3 2015 @ 12:39 AM
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originally posted by: Olivine
a reply to: bigfatfurrytexan

I don't understand where this idea comes from that all of the lower paid employees that got the big raises were slackers, or dead weight, or not hard workers.

It seems to me, that it was your typical, folks in the office making more money than the clerks and technicians in the field, scenario.
Then Mr. Price raised the pay to his lowest compensated workers, because he was trying to lower the stress in their lives.

What you write is, of course the immediate reaction and true!…and after that in a short time you will see what comes next:
Disgruntled capable staff can go to a new company thus leaving the old company with a hole to fill. What happens as that company loses more of it's capable people to other companies?

Higher paid unemployed people comes to mind.
edit on 3-8-2015 by notmyrealname because: noun, verb, conjuntion



posted on Aug, 3 2015 @ 12:44 AM
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originally posted by: Olivine
a reply to: bigfatfurrytexan

I don't understand where this idea comes from that all of the lower paid employees that got the big raises were slackers, or dead weight, or not hard workers.

It seems to me, that it was your typical, folks in the office making more money than the clerks and technicians in the field, scenario.
Then Mr. Price raised the pay to his lowest compensated workers, because he was trying to lower the stress in their lives.


Yet the market values those employees far differently. and that is the problem. as the CEO he has a fiduciary responsibility to his shareholders to be a good steward of their investment. He has seemingly ignored this fiduciary responsibility in favor of taking an unusual compensation strategy. He ignored volumes of research (and common practice derived from such) relating to how humans are motivated, and instead tried to leverage a niche market (people wanting to pay more to process payments in his shop, because his rates aren't the best, which is another part of his problem).

He is toast. Complete toast. Depending on how he budgeted the company compensation packages for the year, he likely won't see another year in his position as CEO, if the company survives. And he's guaranteed to be sued. 3.80 a share currently, and he is operating with greatly diminished capital. He can try to sell more of his share of the company...but at 3.80 a share....thats a lot of selling to do.

RE: all his "new clients"....how many of them are small time entrepreneurs selling their tshirts during weekend festivals, and procesing credit cards via smartphone apps? Is that new client list including multisite companies with any breadth of transactional volume? Or a bunch of hippies/small time entrepreneurs selling veggies at the farmers market?



posted on Aug, 3 2015 @ 12:47 AM
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a reply to: bigfatfurrytexan

Is it a publicly traded company? Are there shareholders? (I honestly don't know) -- because if so you're right .. if it's a private company, I would then assume he can kind of do whatever stupid decisions he wants?



posted on Aug, 3 2015 @ 12:48 AM
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a reply to: MystikMushroom

GRVY

LOL...his ticker sign is "gravy".

Doomed from the start, i tell ya.



posted on Aug, 3 2015 @ 12:59 AM
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a reply to: bigfatfurrytexan

That makes the massive salary increase even more baffling! Look at his annual operating income... he's been hemmoraging money for 3 years and its escalated even more this year. The man has the business sense of a toadstool (or he's got a huge derivative backup against the company and is trying to achieve a spectacular collapse.)



posted on Aug, 3 2015 @ 01:00 AM
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a reply to: bigfatfurrytexan
That is not the company being discussed.
Gravity Co. Ltd. is a Korean corporation. Computer games.
www.gravity.co.kr...



posted on Aug, 3 2015 @ 01:01 AM
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a reply to: notmyrealname

Maybe others will jump ship. I don't know.

Or, maybe he has gained the loyalty, dedication and hard work of the 98% of his employees who have stayed on with the firm. The ones that realize they have a caring employer, and have been given a strong financial incentive to see his company succeed.



posted on Aug, 3 2015 @ 01:08 AM
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a reply to: Phage

you're right. I followed a link to that page from an article, took a look at the numbers, and accepted it as truth.

I am not finding where the company is publicly traded, although they are "Gravity Payments, Inc".



posted on Aug, 3 2015 @ 01:11 AM
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originally posted by: Phage
You should be happy to have the job you have and happy that people who have no experience get paid the same thing you do. Seniority, productivity, and experience have no place in the workplace. Morale of long time employees is not relevant.


Hehe, this business model seems to work well in every fast food establishment in the world... I think the rest of us are doing it all wrong...



posted on Aug, 3 2015 @ 01:31 AM
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originally posted by: Xtrozero

originally posted by: EternalSolace

Looks to me like that defines vanity and self-centeredness perfectly.


So I have you and 5 others to mow lawns. You been working with me for 5 years and you are an expert on all the equipment and know all the customers and their likes/dislikes. I pay you 71k per year to take care of all the equipment, drive it to where it needs to be, make sure enough gas etc is available, pick up the 5 guys and get them to their lawns, anyone missing and you fill in to get everything done well, done on time, done correct and all the equipment is back in the shop and cleaned for another day.

I decide that everyone on the team will make 70k and the guy I hired yesterday who you had to wake up at his house now makes 70k and still gives the effort that he did at 8 bucks an hour. Do you think this is great? Has all your efforts equal this new guys efforts?


I am one of the very few who could really care less. I already live my life in a way that's fulfilled and I'm happy. My happiness and success cannot be measured on a standard such as money.

So, if making 70k a year allows my coworker to live a live that isn't a dumpster, then I'm happy for them.



posted on Aug, 3 2015 @ 01:32 AM
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originally posted by: Hefficide
I would argue that calling Mr Price's decision to raise wages at his own company "arbitrary" is unfair. J


How about not well thought out, is that better?

What if he did the 70k over milestones of lets say every 5 years you get a 20k pay increase within a pay pay band for the job you hold. This would mean that his long term manager employees would get the same within their higher pay band too, life is good then...well until the day he says we need to cut pay due to business expenses exceeding profit.



posted on Aug, 3 2015 @ 01:35 AM
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a reply to: Phage

Round up the poor and eliminate them. They should've been a doctor instead. The world has no use for poor people.



posted on Aug, 3 2015 @ 01:36 AM
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a reply to: EternalSolace
No.
Paying them more than they earn their employer is a much better plan. While it lasts.



edit on 8/3/2015 by Phage because: (no reason given)



posted on Aug, 3 2015 @ 01:36 AM
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originally posted by: EternalSolace
So, if making 70k a year allows my coworker to live a live that isn't a dumpster, then I'm happy for them.


I'll run with your logic too, I just would want to change jobs with the guy who dumps the trash. I can do that quite well for 70k per year.

Hell, better yet if the Government would like to give me a subsistence of 70k per year I'll just not work at all and give my job to someone else.
edit on 3-8-2015 by Xtrozero because: (no reason given)



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