In 2015, our largest competitor paid its top 8 execs $143m. In 2017, the same company spent $1bn to service debt it had used to pay out shareholders after being acquired by a PE firm ten years prior. The co. has approx. 24k employees. According to Glassdoor, its lowest-paid employees earn approx. $23k a year. If the co. limited an exec's compensation to $1m and didn’t have to pay annual debt interest, they could afford to give every single person a $47k raise, meaning the person earning $23k would instantly earn $70k a year. Millions of people have said that our $70k minimum wage could never work on a large scale, but the numbers say otherwise. How can we justify paying a handful of people more money than they could ever need when we could literally make thousands of people financially secure? The only answer I can think of? Greed.
Thanks for the thought-provoking post. Focusing on executive pay...In the U.S. we tried legislating "economic fairness" over twenty years ago where we effectively capped tax deductions on exec pay to $1M per exec annually. It failed to broadly moderate 'excessive executive pay' largely because the legislation failed to stipulate; limits on performance-based compensation, including but not limited to 'stock options', massive bonuses based on very attainable goals, etc. allowing unlimited deductions for them. In the U.S. at least, corporate profits as a percentage of real GDP are at their highest point in history, executive vs. employee pay disparity is at its broadest, and wages as a percentage of GDP have nose dived since late 90s/early 2000s and are now at their lowest point. Figure out a way to incentivize corporations to cut exec pay and you'll be on the path towards establishing a more equitable system.
Totally agree with your mindset. Keep up the good you do
Agreed!
So far Gravity Payments has survived by their new model. I think you make a great point about the company being in debt to pay those exec's considering they never really had the money to give in the first place. The idea of "The Ant Farm" model is slowly changing the idea of the corporate model of one head or heads making the most when really everyone underneath is the support system and foundation .
I find it interesting to look at the compensation issue from the perspective of borrowing to pay salaries...especially the massive ones at the top.
Thank you.
Founder, Gravity Payments
6 年Looks like our competitor CAN afford a $70,000 minimum wage!!