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I can't believe you buy into that... Cutting your salary to $1 while getting more money by stock options REDUCES the taxes that he is paying... I would do the same in heartbeat but the IRS would charge me with tax fraud... luckily Steve Jobs has an army of lawyers to make the IRS scared of doing it...
The point is, this CEO is probably doing something similar.
The point is, this CEO is probably doing something similar.
Shouldn't a CEO's salary depend upon the performance of the stock? And if that means giving the workers more money than so be it. I think a CEO should never have a salary. He should be like a commissioned salesman.
Shouldn't a CEO's salary depend upon the performance of the stock? And if that means giving the workers more money than so be it. I think a CEO should never have a salary. He should be like a commissioned salesman.
Maximizing stock price induces short-term strategies that can prove harmful to the company in he long run.
Lol, Steve jobs was worth billions. That was more a publicity stunt, kinda like this guy. Hey look at me I'm only getting paid a $1 a year. If Steve jobs came back to Apple broke he would have taken full ceo pay package. Im not going to praise the guy in the op for taking a "pay cut". He's probably worth millions dollars. I guarantee him and his family ain't taking a lifestyle cut.
If some of you folks have read on this back in WW2 during the construction boom a number of execs worked for $1 per year yet stock investments in their firm grew and they were wealthier due to wartime contracts. Example being Henry J. Kaiser of Liberty ship fame. We have Kaiser Permanente(managed health care consortium) today thanks to all of that money.
Shouldn't a CEO's salary depend upon the performance of the stock? And if that means giving the workers more money than so be it. I think a CEO should never have a salary. He should be like a commissioned salesman.
Most of their compensations are stocks - their salaries are symbolic. For example, Steve Jobs. However, you must keep in mind most CEOs are temporary employees. Like others pointed out, if you link their compensation to stock performance, their would simply focus on the short term stock price and then cash out rather than the long term benefit for the company.
We are talking about just a few CEOs working for multinational global companies. The vast majority of the CEOs don't get millions in compensation.
CEO pay cuts in order to give more money to employees is pure bunk except for the smallest of companies. This is publicity stunt for Gravity Payments, and nothing more, because it's not a strategy that can actually work for employees of large companies.
Take the McDonald's CEO example....$9,000,000 salary.
$9,000,000 / 385,000 US employees = $23.37 per employee
$23.37 / 1,560 hours at 30 part time hours for 52 weeks = $0.02 raise per hour per employee.
Yes, that $9M rerouted to employees would result in two pennies per hour.
Raiding CEO pay is not the answer. It just makes liberals feel better to cry about it.
You can open a small business and sign up with Gravity payments to process your credit card transactions (and of course make sure you pay all of your employees at low end of the salary spectrum 40% over market rate)
All kidding aside, this is a dynamic move on Price's part. It's a great strategy to motivate (and retain) his workforce and have very high expectations from them as a result. I don't think is at all a 'pay them more just because of their socioeconomic struggles'. Price wants more out of his workforce and he's taking action.
The risky part is that he 'was' at a $1MM salary himself with only $2.2 MM in annual profits (and he's burning through his salary shift and 80% of those profits to maintain the salary bump).
Payment processing is a tricky business. Nice residuals but lots of competition (and the small business owner usually goes with the cheapest offered plan). As a result there's a lot of in and out with regard to the client portfolio. The business model is basically sell, sell, sell, maintain the processing engine and customer retention. Difficult to grow the business unless you have a distinct technological advantage (that provides significant value to the client base).
This move is creeping in on their profit scheme (which will either affect their pricing model or their salary structure). It will be interesting to see how this plays out.
1. Did the company pass the cost down to the customer?
2. Is the company still in business?
3. Did everyone get a raise, as stated? (Over 3 years BTW)
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