
The CEO Paying Everyone $70,000 Salaries Has Something to Hide - whatok
http://www.bloomberg.com/features/2015-gravity-ceo-dan-price/
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Someone1234
This article slings a lot of mud but little of it sticks. The main thrust of
their issue is (paraphrasing) "He should have been paid about 470K, not
1.1mil" (before he cut his pay and gave it to his staff).

But in a private business the owners can pay themselves whatever they want as
long as all owners agree to it. The lawsuit is likely related to how not all
owners agreeing with his 1.1 mil pay packet, and the article is arguing that
his decision to cut it and give it away was because he knew the lawsuit was
incoming (to head it off, essentially).

They try to raise a lot of other issues (e.g. that he claimed client turnover
was 30%, when they claim it is 16% and up, but definitely less than 30%), but
much of it comes across as almost petty, like they had one big interesting
claim and tried to pad it out with a bunch of minor mis-speaking or other
miscellaneous issues.

Ultimately it reads like a hit piece. Really they're just re-hashing the
lawsuit and have nothing else to add of value.

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zymhan
> the article is arguing that his decision to cut it and give it away was
> because he knew the lawsuit was incoming (to head it off, essentially).

That is not what the article is saying at all. It says that he initiated this
pay raise __after __being sued because he payed himself too much.

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sophacles
There is literally no difference between gp and what you are saying.

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tptacek
This piece is pretty long for the little bit of new information it provides,
so here's what I believe is the nut of the piece:

Dan Price co-owned Gravity with his brother Lucas. Dan Price became famous for
raising his employees salaries so that none made under $70,000. Shortly he did
that, a story broke that Dan was being sued by his brother Lucas, who was
demanding that Dan buy his stake out. Dan and his spokespeople represented to
the media that the suit was a reaction to the pay raise, which reduced profits
for owners to pay employees.

But it turns out that Dan was served for the lawsuit before the pay raise, and
that Dan's legal response to the suit also precedes the raise. It does not
seem likely that the lawsuit had anything to do with the raise. It is now
plausible (but unproven) that the raise was a tactical reaction to the suit.

Furthermore, Dan Price's ex-wife alleges that Dan was physically violent to
her. And, Dan Price's own salary is anomalously high given the details of the
company.

That's pretty much it.

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whatok
Thank you for writing what I was too lazy to do.

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jisaacstone
I went to high school with this guy, and used his company as a payment
processor when I was running a small retail shop. That was about 4 years ago.
really did a good job nailing down the small merchant niche by removing dumb
fees like 'drop fee' and 'statement fee'

It's been really weird to see everyone's reaction to this thing. Surreal
almost. Didn't see Notch get this kind of hate when he shared his bonus with
all employees. Perhaps it's because he works in the financial industry?

~~~
Someone1234
It is because he is promoting "evil" socialist ideas that go against the very
grain of capitalism (essentially sharing the wealth, and sharing the profits).

He's upset a lot of rich and powerful people who don't want their poor
underlings to start asking why they aren't benefiting from the company's
growth or profit margins.

Essentially he upset the status quo.

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zymhan
This guy is not the first person in history to pay his employees well. You're
sadly mistaken if you think this guy is some socialist hero to the working
class.

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Someone1234
He isn't. But he is seen that way by others, and that's why upset THEM. This
is more about them and how they perceive it (and the associated media) than
about him directly.

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tunesmith
Man, with the way the sharks have been in the water around this guy, you'd
think he was running Theranos or something. So what if he was initially
overpaid, and so what if the lawsuit predated the decision? The domestic
violence allegations are another matter, but still, if he's guilty of that
does that mean that his employees have to give half their salaries back to him
just to appease the Ayn Rand acolytes?

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smt88
He might have had selfish motivations, and he might be a bad guy. But neither
of those things changes the fact that he did an experiment with giving
employees equal salaries, and that experiment had positive results on the
company.

I think sharks are circling because people have a zeal for debunking the idea
that someone is selfless. If you Google it, you can even find people who
criticize Mother Theresa for having secret, selfish ulterior motives.

I personally believe people who help others always get something out of it
(even if it's just private satisfaction), and that's OK. A good act is a good
act, regardless of the internal thoughts that triggered it.

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DanBC
People criticise mother theresa because she believed that suffering was a gift
from god and because of that she didn't allow pain medication to be used in
her "hospices". And her hospices didn't separate the curable from the
untreatable, so a bunch of people died needlessly.

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smt88
That's very interesting! I haven't seen that specific (and horrifying)
criticism.

What I've seen was from Christopher Hitchens, who said that she wasn't a
"good" person because her primary motivation was to proselytize, as she
believed Jesus instructed her to do.

My comment was creating an analogy between those two: Dan Price doing
something awesome for his employees because of a lawsuit is something like
Mother Theresa serving the poor because she believed it was how she would have
a good afterlife.

I don't know if either of those motivations are true. It's impossible to know
someone's motivations with certainty. That's why I think an action and its
consequences are the thing to focus on.

If it's true, as the article says, that Dan Price is creating the cult of Dan
Price (a do-gooder-CEO kind of thing), great! Even if he's just some
narcissist who wants people to love him, I'm happy that another wealthy person
is pursuing some form of humanitarianism. All the really "good" people might
be narcissists, for all we know!

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stuaxo
Did you see the Christopher Hitchens documentary? There seems to be quite a
lot of detail in it beyond just her motivation being to proselytize..

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asdfologist
TL;DR: he raised the salaries _after_ he was sued for overpaying himself.

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lingben
Thank you :)

I don't know how to write this comment in a short time span without coming
across as a snarky a-hole but seriously, why are such piss-poor writers
allowed to write for such serious publications? where the hell are editors and
what are they doing? when did it become acceptable to hit 'publish' on such a
shoddy amateurish article?

sigh

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shawn-furyan
This is a bit off topic, but I see this bafflement over the general decline in
editing quality a lot. It's really not so surprising given the way the news
landscape has changed in the last couple decades.

Editing is expensive[1]. The internet ripped the heart out of the print news
business. Accordingly, editing has been cut back drastically pretty much
across the board in response to increasingly tight budgets.

[1] Much more expensive than one might assume without having experienced the
process. Coordinating among multiple people plus the back and forth iterative
process that editing generates adds a lot of overhead to the writing process.
Self editing is much faster (and therefore cheaper), but you get blind to
errors that would jump out at someone else, and so errors slip through much
more readily. Plus, other people are capable of challenging your assumptions
in a way that you just aren't capable of since you aren't even always aware of
your own assumptions.

Source: I've written informally at the margins for a reasonably, but not
tremendously, high trafficked niche blog, and have participated a little in
both edited and self-edited articles from both the writing and editing side.
This was never industrial strength editing, so I imagine the cost to actual
news outlets with higher standards is a lot higher than I have experienced.

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AznHisoka
The CEO just sounds desperate for attention, as if he's a cult leader.
Seriously, planks during meetings? I'd quit right then and there. Just sounds
like an immature person that just wants to start a business because he'll get
to implement all these quirky, utopic policies.

Also, just very low emotional intelligence for not thinking about the people
who got paid highly and deserved it. You didn't hire robots - you hired human
beings with real emotions.

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drewrv
Maybe I suck at emotional intelligence, but why would a highly paid employee
be upset that lower paid employees are getting a raise?

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whatok
Let's say I'm a college graduate (with accompanying student loan debt) and
you're a high school grad. We both get jobs at the same company and you're
paid 40k while I'm paid 60k. If we both get raises to 70k, I am still stuck
with my student loan debt while getting paid the same as someone who did not
need to spend years in school or take on student debt.

~~~
rjvir
But why would the other person's salary affect you?

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whatok
Because of the reasons listed in my original post. If I had to sacrifice time
and money to graduate from college to qualify for a job and an arbitrary raise
provides the same compensation to someone who does not have a college degree,
it devalues my degree. On top of that, besides the degree getting devalued, I
still have the original student debt amount.

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etiene
But you had 60k before and now you have 70k... I'm sorry but your line of
thought makes no sense at all to me. I'd be fine with it.

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AznHisoka
As another posted said it makes complete sense. Psychology 101:
[https://en.m.wikipedia.org/wiki/Relative_income_hypothesis](https://en.m.wikipedia.org/wiki/Relative_income_hypothesis)

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zymhan
> Gravity’s 2014 profit was $2.2 million, Price adds.

> At private companies with sales like Gravity’s total revenue, salary and
> bonus for the top quartile of CEOs is $710,000, according to Chief Executive
> magazine’s annual compensation survey. At companies with sales like
> Gravity’s net revenue, the top quartile pay falls to about $373,000. At
> companies with a similar number of employees as Gravity, the top quartile of
> CEOs makes $470,000 in salary and bonus. The CEO of JetPay, a publicly
> traded competitor that processes a similar volume as Gravity, received
> $355,000 in 2014.

$1.1 million on CEO salary sounds ridiculous given a $2.2m profit.

~~~
crpatino
Not if he were the managing partner (and majoritary owner).

But agreed. If this were a public company, stockholders would probably be very
unhappy that half of their earnings are being poached by some profesional
executive with no skin in the game.

~~~
jonknee
But since he is the majority stockholder it makes perfect sense. It's his
money one way or the other.

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eljimmy
I read about 60% of that article and had to stop. It felt like I was reading
some sort of pseudo-soap opera script.

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deelowe
I read the whole thing, but I agree, this style of journalistic writing can't
end soon enough.

~~~
grp
Yep, it seems to me that it's only an ad (hidden in the last paragraph) for
the book about that salary thing.

Basically, this guy want to use the Paris Hilton Syndrom to growth. _I 'll be
famous coz I'm rich coz I'm famous coz..._

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jonknee
Well that was a waste of words. The tl;dr seems to be he used to pay himself a
lot (which he has told everyone), now he pays a lot of people more than before
(which he has told everyone), is stressed out that his brother is suing him
(which he told everyone) and likes publicity (which is obvious).

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littletimmy
I'd be skeptical of this piece. There's been one hit piece after another
against this guy from the conservative/business media. It is possibly that
he's a shady character, but it is also possible that some people are Really
upset at him establishing a pay floor of $70k a year.

We should suspend judgment until we have further evidence.

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brianlweiner
I can't imagine being forced to 'plank' during an office meeting.

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sowhatquestion
The stuff about him overpaying himself is bad enough, but why isn't anyone
talking about his ex-wife's allegations at the end of this piece? (Charitable
interpretation: people didn't make it that far bc this thing is so poorly
written.) Anyway, she's about to go on the record in a very public way (TED
talk) claiming he hit her and "waterboarded" her. It's despicable in its own
right if true, and it points to a larger pattern of dishonesty.

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timbuckley
Probably because they are allegations. If they are found true he should and
will be punished. But until then, he is innocent until proven guilty. I don't
see the point in a witch hunt.

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sowhatquestion
I don't see the rest of the article being treated with this level of
skepticism.

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Overtonwindow
Why do we always have to tear people down for doing something good? Who cares
their motivations, reasons, or response? I give the guy credit for doing
something radical that improves peoples lives. I don't care about what Dan
Price may or may not be getting out of this. I'm more interested in the
experiment itself, and the employees. To me this is nothing more than a hit
piece.

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thebokehwokeh2
TL;DR: This is a run of the mill hit piece. Save yourself the trouble and
don't waste your time reading this drivel.

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sageikosa
I stopped at the plank during meetings bit...

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aswanson
The plank meeting idea seems good.

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et2o
Well this is a hit piece.

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orliesaurus
tl;dr anyone?

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soperj
It's a hit piece. Basically the lawsuit from his brother seems to have come
about before the pay hike for employees. Also put a smattering of he beat his
ex-wife in at the end, but we have no real evidence.

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theworstshill
Its incredible how hard the sharks are trying to discredit this guy. I recall
reading about Gravity on marketwatch several months ago, comments were full of
expletives and certainty that the company would go bankrupt. Dumbasses.

The benefits are obvious to anyone with half a brain - significantly better
retention, a large pool of motivated applicants to choose from, and more
companies doing business with them (mostly based on the ethics "brand"). The
guy got first mover advantage here. Good for him.

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wahsd
Was anyone else caught off guard by the sexy yoga ball pose?

Edit: Someone else says it's a hit piece, makes sense that the picture seems
off if it is some filthy animal squandering the internet's time on savagery.

~~~
guiomie
I'd say the pictures are kinda creepy.

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adharmad
The Twentieth century motor company

