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“Today I cut my pay to $0. I'm committed to laying off 0 of our employees.”
- effnorwood 7y ago*laying off our 0 employees
- amelius 7y agoSounds like how it should be. Business owners are taking the risks, but also profit more in good times.
- Ididntdothis 7y agoThese days I wold argue that especially in small businesses and startups the first employees are the real risk takers. The owners/founders will usually find a way to get some money when a company is failing while the employees get nothing.
- CoryAlexMartin 7y agoHow are owners of small businesses able to make money while their company fails? I would like to know because I plan on starting a business in the coming year.
- Ididntdothis 7y agoSelling assets. Get acquired for customer data. Lay off people before the company money is gone and liquidate. There are probably a lot of other ways.
- tucaz 7y agoI’d like to know too. If it’s so easy to make money while failing I think I might start a business just to fail and make money. Rinse and repeat and I’ll be rich very fast.
- dvtrn 7y agoMay as well just start day trading at that point, dunno about the rich fast part, or the rich at all part but hey, the math is fun at least.
- erikerikson 7y agoI didn't see the part where anyone wrote that it was "easy".
- erikerikson 7y agoIP, code, contracts, customers, data The point of starting a company is that you pay time-limited salaries to employees while accumulating investments in systems, tools, and processes that allow for/increase the efficiency of the generation of profits through doing something valuable for others. The portable assets among those investments remain valuable if that value can be harnessed for some context somewhere. Often, these values are far lower than they would be if you had a functioning organization operating them but something is better than nothing.
- liamcardenas 7y agoI think there is small class of founders who fail and end up better off than their employees but it is not the majority of cases. If you factor in resume/connections/experience, that number is certainly higher -- but that seems fair to me.
- jkestner 7y agoSmall businesses maybe, but large businesses work the cycles of the economy like a ratchet. Bailouts in hard times, buybacks in good times.
- todd3834 7y agoNot to be pessimistic but I assume when a CEO cuts their salary there are other forms of compensation like stock. Maybe someone here with more experience can weigh in? Cutting $70k only helps one person keep their job. How many employees do they have? Anyways, I still applaud his desire to keep 100% of his employees. It is noble. Board and shareholders might disagree but it is nice to see someone looking out for the people ahead of the business in this time.
- DoctorOW 7y agoDid a little more poking around but he also gave up his stocks and savings according to this tweet: https://twitter.com/DanPriceSeattle/status/1233474662967005185 https://twitter.com/DanPriceSeattle/status/12334746629670051...
- nostromo 7y agoThe article states that he did that in 2015. This tweet is retrospective.
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- caycep 7y agoI always wonder - when they calculate the dollars and cents of layoffs vs. hiring etc. Do they factor in the cost of losing employees, expertise, talent? There's probably financial value that's hard to model/capture in the balance sheet by retaining employees and building up the average years of experience in your workforce, etc.
- unlinked_dll 7y agoShort answer: yes Longer answer: it doesn't matter as much as you'd think. These companies making huge layoffs are facing an existential crisis, not slimming down for a revenue shortfall.
- Reedx 7y agoStewart Butterfield (Slack CEO) was asked if he'd commit to not doing layoffs and I appreciated his response[1]. Effectively pointing out that it's easy to just say yes in their position, and that it's presumptuous of Salesforce to be asking for no-layoff pledges. It's pretty meaningless and comes off as shallow or self-serving PR for types of businesses that are doing better than ever right now or can easily weather the event. The CEO of Texas Roadhouse, a chain of restaurants, gave up his salary and bonuses to redirect to employees[2]. A particularly noteworthy example, I think. 1. https://youtu.be/3aVh0QYPtVI?t=427 https://youtu.be/3aVh0QYPtVI?t=427 2. https://abc13.com/6052453/ https://abc13.com/6052453/
- zaksoup 7y agoThe author of the original tweet is the CEO of Gravity Payments, a Square competitor that mostly serves smaller retail and restaurant businesses. In further tweets he talks about how they're losing tons of revenue right now. I agree that it's shallow for Slack and Salesforce to pledge not to have layoffs but in this case I think it's a pretty meaningful commitment.
- brenden2 7y agoWhat I've been hearing on the internet is that companies are racing to lay off as many people as they need to now, before applying for their free bailout money from the government. It also sounds like businesses are trying to lay off more than they actually need to lay off, in order to get the maximum benefit. The terms of the bailout loans are such that they can lay off people before they apply, get the money, and so long as they don't lay off any additional people after they get the money, the loan converts into a grant (i.e., a free bailout from the Federal government). My personal opinion is that giving free money to companies is a terrible idea, and they should just give helicopter money to individuals. Companies are going to engineer this to their maximum benefit, and the amount of money going to companies is much much greater than the amount going to individuals. Interesting times we live in. It's important to ignore what people say, and instead focus on what they actually do.
- apta 7y agoAre we really surprised though? This is just capitalism at work.
- brenden2 7y agoSurprised, no. But if you listen to the talking heads on the TV they will tell you a different story about how great this is for everyone.
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- fonkyyack 7y agoI agree with you with the first point, giving money to companies isn't a good idea but I think it's also a bad idea to give it to "the people". I think it would be better to change. My opinion is most people are going to buy thing they don't need. Instead we could focus on better ideas for the future.... I don't know maybe I'm too utopist...
- LocalH 7y ago
- ykevinator 7y agoThe ego on this guy. Just do it quietly, why brag about it
- laluser 7y agoI don’t care about egos. It’s a cool thing to do that also helps their brand as an employer. I hope other CEOs emulate this behavior.
- adsljfl3 7y agoBy proclaiming this publicly, you influence other CEOs to consider taking this action. It's a good thing to market these actions.
- memonkey 7y agoThere is still a stigma about people talking about money and how much they are making. It's an important conversation to have, especially when the wealth gap between CEOs and regular people is so wide. The thing this guy is doing can potentially influence the ultra rich into giving up some of their enormous wealth.
- dmode 7y agoMust we be always skeptical? Openly announcing sets a standard that forces hands of other companies
- A4ET8a8uTh0 7y agoBecause society needs feel good stories right now. I am not even joking. You probably did not realize how close to the abyss we have come last week. In practical terms, people suck when they are scared and hungry. I rarely go for pop culture references, but it is very much applicable here: “Their morals, their code; it's a bad joke. Dropped at the first sign of trouble. They're only as good as the world allows them to be." And I am saying all this annoyed at the fact that I will be one of the people having to pay massive tax increases that will have to pay for all this.
- treyfitty 7y ago
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- 6gvONxR4sf7o 7y agoI wonder why we aren't hearing about companies selling more stock for funding. Sure it's at a huge discount, but better dilution than destruction, right? Is it just because the bailout loans offer them a better path? Or because they'd rather lay folks off than dilute?
- ryanSrich 7y agoPublic companies have the stock market and private companies have VCs. What do you mean? VCs are talking about how no net new deals are getting done, and the stock market is touch and go each week.
- wool_gather 7y agoAre there enough buyers for stock to make that useful right now? (Non-rhetorical question; I have no idea either way.)
- 6gvONxR4sf7o 7y agoThere's no less cash in the market than a month ago, so at the right price there should be buyers? But since alongside cash, there's also credit and assets, I actually have no idea how much less cash-like "value" there is, even if the fed or somebody helped turn it all into cash. I suppose the government could always be the buyer instead of giving loans. Good question ¯\_(ツ)_/¯
- benatkin 7y agoThere are a bunch of tech CEOs who pay themselves one dollar. https://thehustle.co/1-ceo-salary/ https://thehustle.co/1-ceo-salary/
- rsync 7y agoI am aware of this, of course, and always find it interesting ... According to my own understanding of US tax code(s), one must not reduce their w-2 income to zero - or even relatively small numbers that do not befit their position or responsibilities. The issue here is that a funding for welfare programs, such as social security, are taken from wage earnings. It is, in fact, preferable for me, as a business owner, to reduce wages to zero and take compensation in the form of dividends or distributions. But I cannot legally do that. I have been advised by multiple tax professionals that not only can I not do that, but I cannot have a conspicuously low salary. At the very least I need to hit the max social security threshold to avoid scrutiny. So I always wonder how these $1 and $0 earners make this work on their personal tax returns ...
- SpicyLemonZest 7y agoThe $1 earners put a lot more than $1 on their W2s. Zuckerberg for example has $1 salary, $0 stock, and $22 million "other compensation" including security and jet costs.
- rsync 7y agoThat's not how a W2 works. All of those other forms of compensation are, of course, in their 1040 but are probably on a K1 or other amendment. Social security contributions (to pick the most important one) can only come from wage income so the question remains: how are they paying into social security and, if they are not, why is that allowed when it is generally assumed that it isn't ?
- dhimes 7y agoI always assumed that it was because they got paid in dividends, which are taxed at a much lower level. Not an expert though.
- goatherders 7y agoAre we really patting people on the back for cutting their own pay to allow employees to be paid more? That's how economics work: if you want to pay X then you have to find that money somewhere.
- goatherders 7y agoDownvotes, really? Dont ever change HN
- FillardMillmore 7y agoI did not downvote you, but paying people more is not a zero-sum game. The pay rate of an employee is not necessarily contingent on the salary of a CEO. More money can be attained through the creation of value in an economy - this value will add wealth - this added wealth could allow for both the employee and the CEO to be paid more.
- goatherders 7y agoAgree completely. It's a nice gesture that the CEO cut his pay but - in agreement with you - there are lots of ways to increase employee pay.
- Hitton 7y agoI read about this guy here one month ago. Some commenters were claiming that he is doing it for PR. https://news.ycombinator.com/item?id=22441129 https://news.ycombinator.com/item?id=22441129 https://news.ycombinator.com/item?id=22441354 https://news.ycombinator.com/item?id=22441354
- keanzu 7y agoEvery twitter post by every corporation/majority owner/CEO/founder ever is done for PR.
- liamcardenas 7y agoAlmost everyone I know who has run a business (myself included) has made similar sacrifices. This is not that rare. This guy seems to serially try to generate PR by making himself out to be a selfless CEO. In doing so, he is implying that most other CEOs/business owners are bad people.
- Hasz 7y agoI don't think the second sentence follows. Good people existing does not imply that everyone else is bad. What's more, signaling corporate responsibility + personal ethics is a part of his company in the same way that Elon Musk's flamboyancy is a part of Tesla. I much prefer the former.
- hitekker 7y ago> Good people existing does not imply that everyone else is bad. It implies that to the immoral who pretend they’re moral. It reminds them of their own hollowness, which provokes a lashing out.
- Judson 7y agoI wouldn’t be so cynical. It’s important there are vocal leaders showing the sacrifices they are making — otherwise it’s easy for others to pretend it isn’t possible to make the same sacrifice.
- liamcardenas 7y agoI think it’s counter-productive. He is making this seem like a huge sacrifice when, in fact, it’s par for the course. I wish if he wanted to talk about it, he would make it less about himself and more about “what it takes to run a business”. In many cases, people pay themselves nothing, take on debt (without having ever made millions of dollars per year), and don’t guilt-trip/lord it over their employees. (Ok I’ve said my piece, I won’t continue to be a hater :P)
- munificent 7y ago
- outside1234 7y agoIs he the majority shareholder? If so, is he really making a sacrifice here or just deferring when or how he is getting returns.
- keanzu 7y agoNovember 2015 As majority owner, he is not exactly penniless. https://www.inc.com/magazine/201511/paul-keegan/does-more-pay-mean-more-growth.html https://www.inc.com/magazine/201511/paul-keegan/does-more-pa...
- throwawaynerdy 7y agoThis is exactly what I was thinking. This is an expensive (?) HR and PR Ad. In 10 years the popularity of the company should be higher than today, the company will be sold and gutted.
- optimaton 7y agoSomeone who is going to such lengths to save their employees should at least be given the benefit of doubt. He did something similar 7 years ago, so I don’t think he has some ulterior motive with all this or a grand plan. IDK, Seems like a great guy to me.
- tomp 7y agoThat's the idea, no? Ownership is optionality, you can end up with 0 or with billions. Employment is security, you're "guaranteed" your salary but no more (or fired). Sounds like he's promising security to his employees, and eating the variance himself - taking a hit in bad times and, conversely, making bank in good times. Sounds fair to me!
- arkanciscan 7y agoDude's got a savior complex
- hizxy 7y agoThats great and all but I think people are using the pandemic as a marketing tool—“Look at how good we are to our employees”.
- twblalock 7y agoFor some companies the choice is between laying off some workers now, or all workers a few months from now. Large companies with cash in the bank may not have this problem, but small businesses often only have a few months of runway.
- sytelus 7y agoI don't know much about this guy but when I hear a founder CEO cutting his pay to $0, I have to roll my eyes. Vast majority of CEO comp is in equity so cutting base pay to $0 has no material meaning. In addition, successful founder CEOs have typically already cashed out to the tune of millions of dollars while still retaining significant stock. With that much cash in the bank + ownership stack, the annual salaries or bonuses are icing on the cake. No CEO without a significant ownership stack is going to settle with $0 or even $70k.
- optimaton 7y agoFantastic! People never go out of business, but businesses do, take care of people not some fictitious entity.