CEO cuts own pay so workers can make $70,000/year

[yellowjacketcoder]

@pbbth

Obviously paying everyone the same amount isn’t going to work, but what is the correct balance? If instead of paying everyone $70k, and instead of paying the CEO a million a year, the skilled labor $70k and the secretary $30K, you paid the CEO $750k, the skilled labor $85k and the secretary $45k you might find everyone felt valued and was able to provide for their families without causing people to feel like their efforts are not appreciated by the company.

Considering this whole thing started because the CEO recognized that he was overvalued and his staff were underpaid I think this would have been a much more effective change. Now all he’s done is given grossly overpaid CEOs something to point at and say, “See, paying people more doesn’t help!” while ignoring the needs of their employees and adding additional zeroes to the ends of their personal paychecks.

I agree with this. The idea of “pay your workers what they are worth” is a good one; the idea of “raising our minimum salary for good feelings regardless of worth”, not so much

[DrDeth]

@Diceman

Hmmm… Am I the only one wondering if the true purpose of this experiment was to drive the company into the ground, so the CEO can say, “Here, bro! Take the fucking company. Ha Ha!” :dubious:

No, more likely it was to shown that the lawsuit was groundless as he was earning the same as all the other employees. In other words, his gracious egalitarian gesture was simply to get his ass out of a lawsuit.:rolleyes:

[Red_Wiggler]

I don’t think the current problems are a reflection of nor a result of the experimental policy. The true comparison should be the company’s salaries in relation to the local market. If the web developer previously making $50k is upset that the janitor’s raise (to reach $70k) was larger than his, then he is stupidly free to quit and take his talents to a competing company that will pay him — $50k.

It’s hocus pocus reasoning for someone to truly believe that he’s not getting a bigger raise because the secretary is overpaid, even though he’s already being compensated at above market rates. You’re ultimately not competing against the other people in your company; you’re competing against people who perform the same work in your locale.

[Omar_Little]

@Pork_Rind

But it also sounds like their new client list increased 175% month over month and that they’re having to support the huge volume of new clients while the billables for those clients don’t come due for 12 months or so. A good problem to have but still a problem.

But is the incremental increase in business worth the $70,000 price tag for every new employee he has to hire to take on the added business?

Normally when you increase your business you hope and expect to leverage your existing infrastructure so that the new business is even more profitable. In this case with the increased min. wage it sounds like he may actually be deleveraging his capability, meaning it may not be profitable to take on new business. Not a good problem to have.