Posted on 04/15/2015 9:44:32 PM PDT by lowbridge
Some call it pay inequity, others call it wage gap. Whatever you call it, Dan Price has caused quite the media frenzy regarding his recent announcement that he'll slash his $1 million annual salary down to $70,000. As reported by both The New York Times on April 13, 2015, and also by CNN on April 14, 2015, the 30-year-old CEO of Gravity Payments has upped the pay of every employee to at least $70,000 while cutting his own down to the same amount.
-snip
Nonetheless, it appears that the reporting media seems to have missed that while Gravity Payments annually pulls in $2.2 million, even if the 121 individuals had their pay but to $70K, the new payroll amount is astronomically greater than the bottom line. Simply maths illustrates that 121 employees multiplied by $70,000 base salary equals a whopping $8,470,000. The calculated baseline payroll doesn't take into account those already paid greater than the base pay amount. The updated minimum payroll is 285 percent greater than what the company pulls in.
(Excerpt) Read more at examiner.com ...
(Note: Thats not their gross. Thats their projected net profit for this year)
Related thread:
Get me accounting!!!!
“Simply maths illustrates that 121 employees multiplied by $70,000 base salary equals a whopping $8,470,000.”
Common Core advocate? Why in the hell would mere mathematics be any barrier to realizing this particular utopian construct?
Sounds like Al, Jessie and Calypso Louie are working the calculators over there!
Let's say you have a temp services company which just hires people, marks up their salaries by 25% and rents them out to other companies. If other expenses are minimal, then the salaries would be four times as large as the profit. You could make a lot of money that way.
But, but...everything is so “FAIR” now.
How can it not work?
Ain’t Marxism wonderful?
Pray America is waking
Read this yesterday and instantly thought the guy is lying in a misguided attempt to gin up sympathy business.
Problem is there is no sympathy in business.
Problem is labor costs arent so easy to disguise.
You could, for instance, have a construction company pull in enough money to pay labor and have nice profit because the originator of the contract pays for amd delivers materials based on the agreement between them and say, a homeowner.
Pella Windows and Home Depot do this.
Just fire people until the math works out or you go out of business. That is how minimum wage works.
And then multiple total base salaries by, say 1.5, to obtain fully loaded salary costs, which also include, social security, medicare, medical, vacation, holiday, sick leave, etc.
Actually, I went online and did some research. His company has 120 employees who currently make an average of $48,000 a year, and he is increasing that wage to $70,000. So, $22,000 more per employee times 120 employees is about $2,640,000 in increased payroll a year. He claims he is paying that increased expense out of the firm’s 2.2 million profit, and by reducing his own salary by $930,000. So, contrary to what the posted article claims, the math more or less adds up.
Their new motto after this fails:
Socialism is Great Until You Run Out of Other People’s Money.
Thanks Maggie.
The company only has $15 million in revenue. It is a processing company that sells card processing services. They get a small percentage of every card swipe.
The added cost is going to eat up virtually ALL the profit in the company. He dropped his pay from $1 Million (way too high for a company with $15 million in revenue anyway), and that will absorb some of the shock, but not all.
If I was a board member or investor, he would be out on his but quicker than poop through a goose.
Is he the owner ? Owning CEO’s probably should work for nothing. I always did.
People are a major expense item.
Profits, if any, are the slim slice at the bottom of the page.
Math is hard. Reality is harder. Shareholders? If there are any do not @ with them...
He doesn’t actually have to follow through on this. The news media reported the story, but they will never follow up on it to see if it actually happened, or there were layoffs, or new hires under that amount later on, or even the consequences for the company. It got him his 15 minutes of fame.
they likely have employees that wouldn’t qualify under the new policy, like Microsoft used to say every employee got a window office, but Microsoft employees made up a small fraction of Microsoft’s entire employee base
So, contrary to what the posted article claims, the math more or less adds up.
...
Good post. The author of the article is wrong.
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