CEO pay cut may backfire; new payroll nearly 300% greater than profits

examiner.com ^ | April 15, 2015 | timothy whiteman

[HamiltonJay]

The author of this article is the one who obviously must have learned common core, he doesn’t know the difference between profits and revenues.

He’s looking at the profit number and pretending its the revenue number.

The company profited 2.2 Million last year, it made all its payroll and expenses eared 2.2 Million more than that.

The CEO has agreed to cut his salary, which was over a Million last year to 70k, and give everyone raises to 70k who was earning less than that.

So, the company is not in any danger of going bankrupt, the CEO is running his business, whether you agree with how he does or not, its his business to run, so why anyone is trying to tear him down makes absolutely no sense, particularly on a board that claims to be about the promotion of liberty.

If he decides that the company can live with less profits, and a higher payroll that’s his decision to make, so why attack him for it? Envy is the only answer.

[HamiltonJay]

Well you aren’t so why are you acting like you have a vested interest? Its this guys company, he’s free to run it how he likes, and since you are neither a board member, or an investor you have no dog in the fight so to attack him just shows up as envy.

If you respect the concept of liberty you can’t be attacking someone else for exercising theirs when you disagree with it. You by your own admission have absolutely no personal stake in this company, so why are you projecting your will onto it or criticizing it? If the CEO decides he things lower annual profits to provide a better payroll is better for his business that’s his decision to make, it doesn’t affect you in any way, so why do you care?

[BfloGuy]

This guy isn't raising all salaries to $70K immediately. He explained that that there will be a transition period of rising salaries till the goal is met.

I suspect he's not an idiot and has the same access to a calculator that this reporter has.

[central_va]

Corporations want the maximum price for their product but want to pay as close to minimum for labor. Seems to me wall street pays outrageous amounts for labor and gets maximum returns. Maybe non financial corps could learn something from them.

[Gritty]

This CEO could run for President of the United States and be right at home. That’s how the Federal government books are managed!

[Jim from C-Town]

It is not his company. He is simply the CEO. I doubt he has much stock at all. He is simply a hired hand. The article stated that he has worked their since he was a teenager.

It is a risk and a silly one at that. It is an arbitrary figure and it is destined to creata more problems than it solves.

As for caring I don’t! Why do you care enough to rise to his defense?

[Jim from C-Town]

It says he worked there since he was a kid. He is not the owner.

[catnipman]

but you really do also need to up the increased salary costs by about another 50% to obtain what the real costs are to the company.

[NoVestedInterestInYou]

He is the owner. He founded the company when he was 19 years old. As for the costs, it was mentioned above that the math in the article posted is not accurate. I feel embarrassed for the person who wrote it, as it shows a real lack of critical thinking skills. The article seems to assume that no one has any salary right now. The person also doesn't seem to know the difference between net revenue and profits. The company nets like $15 million a year, and has a $2.3 million profit. So if you take into account the fact that not everyone is going to be getting an additional $70,000 (they weren't making $0, and some people already make more than $70,000), then you can see how the overall additional costs are NOT the eight million dollar figure. There also shouldn't be any "unknown" costs from insurances or whatever, as those were being paid anyways. Those would have been paid for even if everyone made minimum wage. If you insist on criticizing the way this successful businessman chooses to run his successful business, then I'd think it would make the most sense to focus on how it will make hiring new employees to handle growth more difficult. In order to justify a new employee, they will need to have more business than they would require if they paid their employees less. Well, I guess they could also raise their prices. Although, I suspect it will ultimately end up meaning the employees will be expected to take on more load. Which may or may not be a good trade off for them and the company. If they can get the same productivity from a single well paid employee than they would from two employees paid half as much, then they would ultimately improve efficiently in many areas. Plus they will have a large pool of qualified applicants to choose from. They can be very picky with the type of people they decide to hire and keep. Quality workers at all levels can do wonders for the bottom line. Here's the about page that confirms he is the founder. http://gravitypayments.com/about We approach business differently than other companies. We’re completely transparent. We gladly choose long-term relationships over profit. We operate on the principle of supporting our community businesses. The most compelling reason businesses switch to Gravity is our team of dedicated, local, customer service members. Our reps are part of your community. When you call us, you’re not talking in a call center overseas, they’re in our office, standing by and ready to help when needed. They can be in your store or office at almost a moment’s notice to help with any credit card issue. “Every one of my teammates is a leader. Together we inspire growth through learning and bold action, relentlessly pushing the bar higher.“ -Dan Price – Founder & CEO

[NoVestedInterestInYou]

I could have sworn I broke that up into paragraphs. Sorry about the wall of the text.

No way to edit posts? Oh well, hope it's not too hard to read that.