Remember the company that instituted a $70,000 minimum wage? Problems are brewing.

[Loren Pechtel]

Meh, a couple employees quitting sounds like the least of Dan's problems. He'll be able to replace them with fellow travelers easily enough.

His big problem will be the ones who stayed getting paid more while not being particularly motivated to achieve more given the alleged revenue bonanza does not appear to be in the offing despite the recent publicity bonanza.

Oh, and those of us who took the "his money, his choice" view apparently gave insufficient weight to his minority partner/brother who does not seem to be on board. An nice expensive lawsuit won't help the crusade, I imagine.

But at least Dan gets to be in the NYT again - this time with his shirt off.

I don't recall any mention of the brother. Had I realized he wasn't the sole owner I wouldn't have taken that position.

 

[untermensche]

An adult only cares about their own pay.

Children care about the pay of others in relation to themselves.

Some systems foster and encourage childish resentments. These are systems of inherent exploitation.

Saying that doesn't make it true. In the real world people care about how much they get in comparison to their contribution.

Why do you even bother with such drivel?

In the real world only children cry when others get too much in their estimation.

Especially when they have enough already.

Capitalism; economics for children.

 

[RavenSky]

Meh, a couple employees quitting sounds like the least of Dan's problems. He'll be able to replace them with fellow travelers easily enough.

His big problem will be the ones who stayed getting paid more while not being particularly motivated to achieve more given the alleged revenue bonanza does not appear to be in the offing despite the recent publicity bonanza.

Oh, and those of us who took the "his money, his choice" view apparently gave insufficient weight to his minority partner/brother who does not seem to be on board. An nice expensive lawsuit won't help the crusade, I imagine.

But at least Dan gets to be in the NYT again - this time with his shirt off.

I don't recall any mention of the brother. Had I realized he wasn't the sole owner I wouldn't have taken that position.

So you don't think the majority stockholders of any corporation get to make decisions for the company?

 

[Jayjay]

Jayjay, imagine a following scenario:

You work for a company for five years, starting from bottom and getting raises as your build up your skills, productivity and responsibility. You work your way all the way up to CEO with a multi-million dollar salary. The board then decides it wants to raise the minimum salary for everyone in the company up to $70,000. Would you feel resentment, or just shrug it off?

If I disagree with the board, as CEO I probably would not be able to do my job anyway and should seek employment elsewhere.

 

[Trausti]

I don't recall any mention of the brother. Had I realized he wasn't the sole owner I wouldn't have taken that position.

So you don't think the majority stockholders of any corporation get to make decisions for the company?

Gravity Payments is not a public company. Minority shareholders in closely held corporations have certain rights regarding decisions which significantly impact the business; like upping the minimum salary to $70K and making the company operate at the margins. Some of these rights may be written into the company's formation articles. Don't know if that's the case here, but it's a distinction to be made.

 

[Axulus]

I don't recall any mention of the brother. Had I realized he wasn't the sole owner I wouldn't have taken that position.

So you don't think the majority stockholders of any corporation get to make decisions for the company?

Within limits - there are minority shareholder rights to prevent the minority from getting screwed by a majority owner.

The majority owner can't decide to pay themselves a salary equal to all the profits of the company, for example, in order to get more for themselves and take away the profits rightly owed to the minority.

 

[Jayjay]

untermensche, imagine a following scenario:

You work for a company for five years, starting from bottom and getting raises as your build up your skills, productivity and responsibility. Then the company decides to hire a new CEO who immediately gets a multi-million dollar salary bump compared, money that could have been used for raising wages for employees like you. Would you feel resentment, or just shrug it off?

What I resent is the dictatorial nature of companies.

I oppose dictatorship in all it's nasty forms.

But the world forces me to have concern for my well being, and that is what I care about. I care if I am making enough for my needs. I care if everyone is making enough for their needs.

I only care if somebody is making more than their needs if that means others are making less which is many times the case with dictatorial control of businesses.

And what the business in question cares about is whether that's viable in the long run. If flattening the payscale causes the top performers to leave and the business starts losing money, the noobs who get paid more than their worth will get fired anyway.

 

[Axulus]

Saying that doesn't make it true. In the real world people care about how much they get in comparison to their contribution.

Why do you even bother with such drivel?

In the real world only children cry when others get too much in their estimation.

Especially when they have enough already.

Capitalism; economics for children.

It's pretty natural for humans to expect to get rewarded from a job in proportion to their contribution and performance. It is only extreme socialism or communism that attempts to overturn human nature in this regard.

 

[Trausti]

Methinks this one was made for Dan Price.

 

[RavenSky]

So you don't think the majority stockholders of any corporation get to make decisions for the company?

Gravity Payments is not a public company. Minority shareholders in closely held corporations have certain rights regarding decisions which significantly impact the business; like upping the minimum salary to $70K and making the company operate at the margins. Some of these rights may be written into the company's formation articles. Don't know if that's the case here, but it's a distinction to be made.

1. Per the article, the brother did not sue over the $70,000 salaries. The lawsuit paperwork was done and signed before Dan Price even made his announcement.
2. The brother will have to show that Dan used his majority position to enrich himself at the expense of the company and/or his brother. Taking a paycheck is a rather odd way of enriching one's self.

The complaints were initially signed March 13 and filed April 24, 11 days after Dan Price announced the pay raises. Attorney Greg Hollon, who represents Lucas Price, said that while that announcement may play a role in the proceedings, it does not relate directly to the lawsuit.

“It was an aggregation of events over the course of years,” said Hollon about the case.

http://www.seattletimes.com/business/gravity-payments-ceo-sued-by-brother/

 

[laughing dog]

It's pretty natural for humans to expect to get rewarded from a job in proportion to their contribution and performance.

I wonder if that is really true. It may be natural to people born and raised in capitalist-like societies. Is anyone familiar with any anthropological work that may shed light on this? I think I'll start a thread in the Social Science forum.

 

[Trausti]

Gravity Payments is not a public company. Minority shareholders in closely held corporations have certain rights regarding decisions which significantly impact the business; like upping the minimum salary to $70K and making the company operate at the margins. Some of these rights may be written into the company's formation articles. Don't know if that's the case here, but it's a distinction to be made.

1. Per the article, the brother did not sue over the $70,000 salaries. The lawsuit paperwork was done and signed before Dan Price even made his announcement.
2. The brother will have to show that Dan used his majority position to enrich himself at the expense of the company and/or his brother. Taking a paycheck is a rather odd way of enriching one's self.

The complaints were initially signed March 13 and filed April 24, 11 days after Dan Price announced the pay raises. Attorney Greg Hollon, who represents Lucas Price, said that while that announcement may play a role in the proceedings, it does not relate directly to the lawsuit.

“It was an aggregation of events over the course of years,” said Hollon about the case.

http://www.seattletimes.com/business/gravity-payments-ceo-sued-by-brother/

I have a sneaking suspicion that Dan Price did the $70K thing to rile his brother, not out of heart-felt generosity. Again, just speculation, but this just seems like old hat, where one of the members of a small company purposely defunds the company, or fraudulently transfers assets, knowing that a disgruntled member is contemplating going after the manager. If Dan Price made his $70K decision after learning of his brother's potential lawsuit, he may be in some deep doo doo. Gravity Payments may be wrapped up and closed within a year or two. Well done.

 

[Axulus]

This is relevant to the topic:

One of the key determinants of satisfaction — or dissatisfaction — with compensation is how employees feel their pay package compares to others, according to Wharton management professor Matthew Bidwell. “No doubt if somebody thinks he or she is doing the same work as another who is paid a lot more, this leads to resentment and ultimately to disengagement.”

Wharton management professor John Paul MacDuffie cites research which suggests that employees arrive at perceptions of fairness regarding their compensation by comparing the ratio of their inputs — including, for example, their credentials, level of experience and amount of effort put into the job — to their outcomes, including such things as salary and benefits. Under this theory, employees also compare themselves to someone else, such as another person in the organization or even to themselves at an earlier stage of their career. In any case, “if the ratio is not equal, it causes a psychological strain that the employee wants to resolve,” MacDuffie says.

http://knowledge.wharton.upenn.edu/article/balancing-the-pay-scale-fair-vs-unfair/

 

[Loren Pechtel]

Saying that doesn't make it true. In the real world people care about how much they get in comparison to their contribution.

Why do you even bother with such drivel?

In the real world only children cry when others get too much in their estimation.

Especially when they have enough already.

Capitalism; economics for children.

You live in a communist fantasyworld.

 

[untermensche]

Why do you even bother with such drivel?

In the real world only children cry when others get too much in their estimation.

Especially when they have enough already.

Capitalism; economics for children.

You live in a communist fantasyworld.

No, I live in capitalist nightmare where destructive childish behavior is encouraged.

What I long for is an economic system designed for adults and not the worst aspects of children like greed and petty resentment.

 

[dismal]

I don't recall any mention of the brother. Had I realized he wasn't the sole owner I wouldn't have taken that position.

So you don't think the majority stockholders of any corporation get to make decisions for the company?

It depends on what the corporation agreement says. And in many states there are legal protections for minority shareholders which cannot even be given away in a shareholder agreement. So generally the answer is no.

 

[dismal]

Taking a paycheck is a rather odd way of enriching one's self.

When you have one minority partner giving yourself a big paycheck is the perfect way to enrich yourself. If you paid out a distribution the minority partner would get his share.

 

[ksen]

I am shocked that special snowflakes don't like it when they're not treated like special snowflakes anymore.

 

[dismal]

1. Per the article, the brother did not sue over the $70,000 salaries. The lawsuit paperwork was done and signed before Dan Price even made his announcement.
2. The brother will have to show that Dan used his majority position to enrich himself at the expense of the company and/or his brother. Taking a paycheck is a rather odd way of enriching one's self.

The complaints were initially signed March 13 and filed April 24, 11 days after Dan Price announced the pay raises. Attorney Greg Hollon, who represents Lucas Price, said that while that announcement may play a role in the proceedings, it does not relate directly to the lawsuit.

“It was an aggregation of events over the course of years,” said Hollon about the case.

http://www.seattletimes.com/business/gravity-payments-ceo-sued-by-brother/

I have a sneaking suspicion that Dan Price did the $70K thing to rile his brother, not out of heart-felt generosity. Again, just speculation, but this just seems like old hat, where one of the members of a small company purposely defunds the company, or fraudulently transfers assets, knowing that a disgruntled member is contemplating going after the manager. If Dan Price made his $70K decision after learning of his brother's potential lawsuit, he may be in some deep doo doo. Gravity Payments may be wrapped up and closed within a year or two. Well done.

I hate to nitpick, but he never actually did the $70,000 paycheck thing. He just talked about it a lot in the fawning media. But it does appear to be a case of him using the company resources to further his personal agenda so I can see where a minority shareholder would have a gripe if he does not share the dream. Whether he has a good lawsuit instead of just a gripe will depend on the documents.

 

[ksen]

I hate to nitpick,

but he never actually did the $70,000 paycheck thing. He just talked about it a lot in the fawning media.

Then why did those first two special snowflakes quit? Were they lying about not liking to see Price's $70,000 plan being put into action?