Dan Price's (the “$70k Gravity Pmts CEO) Motivations
Posted by CircuitGuy 8 years, 8 months ago to Business
This is regarding the company that made a rather mundane decision, as business decisions go, into a publicity stunt.
Apr 15: https://gma.yahoo.com/ceo-live-70-000...
July 15: Free publicity carries on, or in the words of the NYT, they “cope with the backlash: http://www.nytimes.com/2015/08/02/bus...
CircuitGuy's analysis from late Apr: http://www.galtsgulchonline.com/posts...
I got a backhanded question on this board about Mr. Price's rationale for increasing payroll. Let's try to work out his reasoning from the articles.
From the Apr article:
“The CEO of a credit-card payments company in Seattle said executive pay is "out of whack,"
Usually this is a complaint about interlocking directorates. I've never heard it about a privately held company and have no idea what he means.
“I want the company to be sustainable even if something happens to me.”
This is a common concern. I don't see how cutting his pay helps. It actually exacerbates the problem.
“"I haven’t even thought about that at all, too much. My life started pretty simple, in a lot of ways. I don’t have a lot of financial obligations or debts."
IMHO this is a must for growing a business.
“"I may have to scale back a little bit, but nothing I’m not willing to do. I’m single. I just have a dog," “
Does anyone not get this? This means he's looking for one or more of those Seattle girls who look like they're straight out of the 90s. So if we assume a quarter oz of gold is.... j/k. I'm not really going there. This comment is not relevant.
“Price chose the $70,000 figure based on a 2010 Princeton University study that showed happiness, or "life evaluation," is positively impacted up to $70,000 or $75,000 per year; but increases above that figure did not have a significant positive effect on happiness.”
This is important. He's saying in his opinion the raises will make people happier. Maybe he thinks that will make them more productive. I've the strategies of paying above the going rate and of paying below but being very personally supportive work. This happens all the time in business.
“Hearing of their difficulties and those of others struggling to make ends meet inspired him to make a dent in the country's growing income inequality.”
This is the part I don't agree with and that probably annoys people. It sounds like he offering alms, which is demeaning. I don't agree with that.
He reiterates those arguments in the July article:
“a friend shared her worries about paying both her rent and student loans on a $40,000 salary.”
This is the employee happiness --> efficiency-wage thing.
From the Jul NYT article:
[toward the end of the video]“It helps that I'm 31 and don't have any kids, and no g/f.”
Yeah. I'm imagining him walking that aforementioned dog in the park. It's so cute, hey, and he's doing something “radical” that's covered in the NYT. It's like the youthful phase of my Gen-X life never ended in Seattle.
“To [Maisey McMaster], a fairer proposal would have been to give smaller increases with the opportunity to earn a future raise with more experience.”
Yes. I agree. Bring you A-game. Get paid. If you don't, no worries, your A-game is some place else, maybe somewhere you never imagined. Don't get bogged down doing the wrong thing!
Conclusion:
I think this is a tempest in a teapot. He's getting attention for doing something that many business deal with. I admire him for trying to be high-end the same as I admire Wal-Mart for cutting supply chain and employee costs. I admire whatever works.
For him, though, even politicians are interested. I seem to remember being this geek his age and meeting this girl (my wife) in a bar downtown 10 years ago, and by luck I had tickets to a sold out Hillary Clinton talk: http://host.madison.com/news/hillary-...
So I think it's no big deal, not worthy of the attention, but I don't condemn him.
Apr 15: https://gma.yahoo.com/ceo-live-70-000...
July 15: Free publicity carries on, or in the words of the NYT, they “cope with the backlash: http://www.nytimes.com/2015/08/02/bus...
CircuitGuy's analysis from late Apr: http://www.galtsgulchonline.com/posts...
I got a backhanded question on this board about Mr. Price's rationale for increasing payroll. Let's try to work out his reasoning from the articles.
From the Apr article:
“The CEO of a credit-card payments company in Seattle said executive pay is "out of whack,"
Usually this is a complaint about interlocking directorates. I've never heard it about a privately held company and have no idea what he means.
“I want the company to be sustainable even if something happens to me.”
This is a common concern. I don't see how cutting his pay helps. It actually exacerbates the problem.
“"I haven’t even thought about that at all, too much. My life started pretty simple, in a lot of ways. I don’t have a lot of financial obligations or debts."
IMHO this is a must for growing a business.
“"I may have to scale back a little bit, but nothing I’m not willing to do. I’m single. I just have a dog," “
Does anyone not get this? This means he's looking for one or more of those Seattle girls who look like they're straight out of the 90s. So if we assume a quarter oz of gold is.... j/k. I'm not really going there. This comment is not relevant.
“Price chose the $70,000 figure based on a 2010 Princeton University study that showed happiness, or "life evaluation," is positively impacted up to $70,000 or $75,000 per year; but increases above that figure did not have a significant positive effect on happiness.”
This is important. He's saying in his opinion the raises will make people happier. Maybe he thinks that will make them more productive. I've the strategies of paying above the going rate and of paying below but being very personally supportive work. This happens all the time in business.
“Hearing of their difficulties and those of others struggling to make ends meet inspired him to make a dent in the country's growing income inequality.”
This is the part I don't agree with and that probably annoys people. It sounds like he offering alms, which is demeaning. I don't agree with that.
He reiterates those arguments in the July article:
“a friend shared her worries about paying both her rent and student loans on a $40,000 salary.”
This is the employee happiness --> efficiency-wage thing.
From the Jul NYT article:
[toward the end of the video]“It helps that I'm 31 and don't have any kids, and no g/f.”
Yeah. I'm imagining him walking that aforementioned dog in the park. It's so cute, hey, and he's doing something “radical” that's covered in the NYT. It's like the youthful phase of my Gen-X life never ended in Seattle.
“To [Maisey McMaster], a fairer proposal would have been to give smaller increases with the opportunity to earn a future raise with more experience.”
Yes. I agree. Bring you A-game. Get paid. If you don't, no worries, your A-game is some place else, maybe somewhere you never imagined. Don't get bogged down doing the wrong thing!
Conclusion:
I think this is a tempest in a teapot. He's getting attention for doing something that many business deal with. I admire him for trying to be high-end the same as I admire Wal-Mart for cutting supply chain and employee costs. I admire whatever works.
For him, though, even politicians are interested. I seem to remember being this geek his age and meeting this girl (my wife) in a bar downtown 10 years ago, and by luck I had tickets to a sold out Hillary Clinton talk: http://host.madison.com/news/hillary-...
So I think it's no big deal, not worthy of the attention, but I don't condemn him.
