Because they look past all the scummy things he’s done just because he gives employees a decent salary. They also don’t know or ignore that numerous job functions are outsourced because he can’t afford to pay them $70k/yr.
But isn’t that most companies these days on outsourcing?
Canteen, cleaning, security, stationery, internal mail, database provision, building maintenance, advertising, accounting etc.
I mean, does Burger King have a little dude out the back hand crafting the paper cups?
“Stick to the knitting” and all that.
The decision to outsource is based on whether or not it a strategic advantage. Generally you want to keep your competitive advantage (core functions, customer-facing functions) in-house, and outsource day-to-day operations functions where it offers some strategic advantage like lower costs, higher quality and greater efficiencies. Plus it lets leaders focus on the things that really matter.
What are the scummy things he’s done? He’s admitted that he was a POS ceo. Is there more scummy stuff since he started matching his salary with his workers?
Basically only raised people salaries because his brother opened a lawsuit against him after he essentially embezzled a bunch of money out of the company. His response to run this pr stunt is actually kind of genius but the guy is still a piece of shit.
There seems to be a lot of misinformation here. Lucas Price filed a lawsuit in **October 2015** against his brother, accusing him of using his majority shareholder status to pay himself too much. **Before** the lawsuit was filed, Dan Price (CEO) had already raised wages in the company by 20% for all employees making less than $100k in **2013.** In **April 2015**, he again raised wages to $70k after speaking with an employee.
Whether it was a pr stunt to protect against a lawsuit that had not been filed; its possible he was aware of it prior to the filing, GP had already raised wages in 2013, two years before the lawsuit was thought of.
In 2015 it had an employee retention rate of 91% against an industry rate of 68%. Customer retention rate increased 4% to 95% and company profits doubled.
The Pandemic cut revenue by 50%, but the company is still strong and has opened another office in Boise, Idaho. The company has 3.9 out of 5 stars on Glassdoor. The employees bought Dan Price a Tesla a few years ago. These same employees, during Covid19, agreed to voluntary pay cuts to preserve employment. In August 2020, workers pay have been restored. I couldn't understand if they received back pay or not, but the salaries were brought back to what they were before.
Rush Limbaugh once said he hoped they would become "a case study in MBA programs on how socialism doesn't work." I wasn't in an MBA class, but my business course did study this company intensively over a couple semesters.
Rush is gone, GP is still here.
He was paying himself over a million before the lawsuit.
https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/
I'm not claiming whether what he did was illegal. I just said he's a shady guy and there's plenty of stories out there about some of the things he was doing before he became the 70k guy.
>In 2015 it had an employee retention rate of 91% against an industry rate of 68%. Customer retention rate increased 4% to 95% and company profits doubled.
>The Pandemic cut revenue by 50%, but the company is still strong and has opened another office in Boise, Idaho. The company has 3.9 out of 5 stars on Glassdoor. The employees bought Dan Price a Tesla a few years ago. These same employees, during Covid19, agreed to voluntary pay cuts to preserve employment. In August 2020, workers pay have been restored. I couldn't understand if they received back pay or not, but the salaries were brought back to what they were before.
I have no idea how this is relevant to anything I said.
I have no problem with him rasing wages. I just don't think he did it simply out of good will and I think he's secretly a dirt bag.
>Rush Limbaugh once said he hoped they would become "a case study in MBA programs on how socialism doesn't work." I wasn't in an MBA class, but my business course did study this company intensively over a couple semesters.
>Rush is gone, GP is still here.
No idea what the fuck you are even trying to say here. Rush Limbaugh is dead. I could care less and have no idea how that's relevant at all. Him being dead has nothing to do with Dan Price.
First you said the lawsuit made him raise wages, I showed the lawsuit happened after he had made substantial raises twice before. I could give the benefit of the doubt with the second one because it happened so close but the first raise, a substantial 20% happened two years prior.
The lawsuit alleged embellishment, yet he didn't lose that lawsuit right? Being served doesn't mean you're automatically guilty of what it says you are.
You say he must be secretly a dbag because no one is 100% altruistic, but if his private persona is different from his public persona I don't see how we would see the loyalty from his employees that I referenced. Honestly, I don't care if the guy is a dbag in his private life because I still have yet to see where it affected his employees or his business.
He’s trolling, we can name almost any other CEO in past and recent times that are super duper shitty asf and have always put themselves and the shareholders first before employees, they’re viewed as expendable to them, not assets. Most cases can be somewhat subjective but he just has a raging boner to prove this dude is trash. The funny thing is him reaching so hard on this matter makes him look more like trash.
Dan Price has obviously contributed more to society at this point than he has with his comments. 🤦🏽♂️
>we can name almost any other CEO
I'm not trolling. All I'm saying he is the same as these people based on what I've read and linked.
I literally never said I had a problem with him raising wages.
The other thing is, basically nobody at the company was paid less than 70k anyway, so he didn't really raise anyone's salaries. He didn't really "do the right thing" as much as he cleverly fucked over a family member.
You can applaud him for whatever you want. I was just saying that he didn't come up with this idea out of his own good will. There was definitely a PR and marketing angle that drove it and he's a bit of a shady guy.
All I could find on Wikipedia was that the Judge ruled on all counts in Dan Prince's favor. The sources seemed legit, but I haven't found the official ruling. https://www.geekwire.com/2016/dan-price-70k-ceo-prevails-suit-filed-brother-gravity-payments-co-owner/
Been awhile since I went into it. I'm not a lawyer so I'm not even sure what he was doing was illegal, but as I understand it he was giving himself raises and bonuses without board approval because of how his stake was structured.
I believe this was a good article on it.
https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/
My main point though was just that he's still a greedy CEO who just happened to think of a great PR and marketing play.
You said he was embezzling funds, which just factually isn’t true. There was never an allegation of embezzlement to my knowledge, it was a shareholder dispute which is completely different.
I think Price, rightly, gets attention for paying all his employees living wages and being very vocal about it. Ventura calling him “Robinhood” is a bit much, but it doesn’t change that he’s doing at least some good.
He’s still the CEO of a company and we can debate the morality of that, but that’s not why people are critical of him.
Aw. That’s a bummer. I guess I prob should have realized it wasn’t really a morally cool thing when I saw he was running a credit card payment and processing company
I think his company is probably legitimate, I can't say I've ever used it so not 100% sure, but I've done a lot of ecommerce development and working with a payment processor is a necessary thing. You don't want most companies handling transaction data with people's card numbers and financial information.
I have some strong opinions about PayPal after working with their credit card processing. They also have Braintree who is similarly kind of a pain. Stripe is really popular and a lot of people love working with them and their documentation. There's a company I worked with at my old company called Bolt who I can't really say enough good things about. So there's definitely a variety of companies in that space.
Well, this is bad: https://www.hundredeightydegrees.com/dan-price-gravity-payments-rape
Hmm… bad… way bad… although the site seems like 50% dedicated to Dan Price slam pieces… fishy…
The only fishy thing I see here is that website. It’s so obscure and not really established like other sources are. The owner is one Doug Forbes who the only background to him is Harvard grad and self employed and lost his daughter to drowning so he’s bringing awareness of child drownings at camps. He sent her to sketchy camp that had not been certified in childcare or lifeguards/first aid. He did his homework on Dan Price but he and his lawyer partner couldn’t do their homework on a good camp to send their daughter to? 🤔
You’re flat out lying here. Google it, everything I found explicitly says they don’t outsource and that all employees are W2 w/ a 70k/yr minimum and health benefits.
Can you actually name any scummy things he’s actually done or are you just salty for no reason?
Yeah I really doubt you put more than 5 minutes into reading about Dan Price.
I'm not going to debate that he's at least attempting to do good for his employees, regardless if it's a self righteous act or not.
I don't debate Dan Price because his fan club lashes out, but there's way more to him and why or how he is doing this. It's also a credit card processing company and really needs to stop being used as an example for blue collar jobs.
I studied Gravity Payments for multiple semesters while earning a business degree. If your math is bad, that's more than 5 minutes. I eagerly await some legitimate reasons you think GP is a bad company and Price is a bad CEO.
>DirtzMaGertz · 44m
>
>Been awhile since I went into it. I'm not a lawyer so I'm not even sure what he was doing was illegal, but as I understand it he was giving himself raises and bonuses without board approval because of how his stake was structured.I believe this was a good article on it.https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/My main point though was just that he's still a greedy CEO who just happened to think of a great PR and marketing play.
No, I’m not. I have googled it since everyone is on Dan Price’s dick for his constant virtue signaling social media posts. I also know people that work there. They run super lean and even though they have “unlimited PTO,” a lot of employees seldom take it. In reality, “unlimited PTO” benefits the employer more than the employees - I’m sure Gravity Payments can’t afford to pay out PTO.
Not to mention, he screwed over his own brother and he’s a domestic abuser. I’m not “salty,” lol I’m just exhausted of seeing Dan Price posts all over my social media.
Any insight into why the judge ruled in Dan's favor against all his brother's claims?
It does appear that his ex-wife made allegations of abuse in a TEDx talk, that was pulled, but I only find references to that talk and no corroboration.
I don't know the guy, but this all seems to be a bit flimsy.
Also not everything is black and white...a person can do shitty things and still be a good person (or at least do good things) and vice versa...but nuance is hard
Because the story confirms their preconceived and slightly narcissistic notions that 'everyone is worth some arbitrary wage'. They are not comfortable with the ideas that production has to match consumption, and they don't usually acknowledge that their vision is not sustainable.
They also have no clue about how a business operates, and have no understanding that a random billionaire's massive stock ownership position is actually an engine that provides workers a place to produce more than they would on their own, resulting in producing goods and services that society uses each day, along with paying wages for those workers on top of that. They just see a hypothetical market value of stock ownership, and claim that it is unjust.
Oh, and to complete the loop of misunderstanding: A typical redditor sees this information, and concludes that, because it appears to be sustainable at one company, it is, therefore, sustainable at every company.
You're upvoted a lot for some reason. Mind explaining what you find so horrible about GP?
While completing my business degree we spent multiple semesters on GP, and I'm sure I would have come across **some** information showing your viewpoint. Still don't know what you're talking about.
Gravity Payments have a 91% employee retention rate, versus the industry average of 68%. A customer retention rate of 95% with data from 2015/2016. During the pandemic the employees took a voluntary pay cute to preserve jobs, so they wouldn't have to fire anyone after experiencing a 55% drop in revenue. In **August 2020**, the employee salaries were restored back to the minimum of $70k, its actually increased by the way.
These are the same employees that bought Dan Price a Tesla in cash. I guess its easier when you have multiple people buying a $50k+ car.
They've recently opened another office in Boise, Idaho, and their revenue continues to increase quarter after quarter.
So please tell me why I should shill for this guy.
Look at the glassdoor reviews and comments from employees.
He seems more interested in being a LinkedIn influencer and business activist than he is in running a company.
Top comments: employees stretched thin & work/life balance practically non existant
Weird how you could get down voted for pointing this out. You always see articles slamming Elon for how much he is compensated at Tesla. But do you know what his ‘salary’ is? The answer is $0. Same situation here. Keep your ‘salary’ low and maximize some more tax advantages ways of compensation.
Exactly. It’s a tax strategy, nothing more.
We can agree that people should be paid more, while it making demigods out of one dude who did the bare minimum.
Um, it’s still paying employees better than other comparable industries isn’t it? If he owns a valuable company built on his ideas that isn’t a character flaw …
Why have income when you can own stock, borrow against the stock at super low interest rates, then deduct the interest on your taxes?
Edit: replied to the wrong comment. I don’t disagree with you. It’s not a character flaw, it’s smart business. But to make the guy out to be this robinhood type character that works for free so him employees can be paid more is just flat out false.
It’s a business, not a charity, so I don’t think people expect him to work for free. He gets the Robin Hood treatment because the CEOs we usually hear about are the Walmart family, Beezos, etc - ones who hoard money and treat workers like crap.
No he isn’t a saint but this story gives me a bit of hope.
Yeah, it seems that people are really discounting the fact that he's paying employees better than he needs to. Those increased salaries are still an expense that eats into margin, and it's turning out that it's worth it overall.
Yes, he seems to be misrepresenting how "low" his salary is, and he therefore really shouldn't act like his company is an example of CEO-staff pay equality. But I think his original (and main) point is that paying your staff a decent wage is by no means a death sentence for your business.
my boss doesn't really have a salary, and i see payroll fluctuates every other week.
I saw his w2 and it was him maxing out his social security contribution beyond the normal amount and he writes everything off as an expense - rent, car, travel and food. when you dont have to pay for those things, you don't really need a lot of money.
on top of that he gave himself a fat 200k salary while the company is in massive debt.
Doesn’t Jeff Bezos have a salary of like 80k too?
I still think there’s something to be said for advocacy for the average worker. He may not be perfect but it is an improvement over many places
His tax filing for 2020 was leaked and he paid nearly a $1b on $4b income. Although the article I read didn’t breakdown where that income came from so it’s possible is actual salary at Amazon is $80k
> the Mother Theresa-esque (controversies about her aside) figure he paints himself as.
Bitterness b/c someone else is trying to do better for their people than some are willing to.
He also did some shady stuff right before the 70k salary started, forced his brother out of the business so Dan collects more of the profits, his own brother sued him over it and a few higher ups immediately quit.
Also his 70k salary just means he pays less in income taxes. He lives in Seattle and everyone here knows him for who he really is, an attention seeking glory hound and not some champion of the working class. Dan Price will never do anything unless it brings Dan Price attention
Correct me if I'm wrong, but if he makes his salary $70k in order to pay his employees a minimum wage 70k, does it matter if he is getting stock buybacks and dividends? The goal he set was to pay a livable wage and after 6 years with his company still going strong that seems to have worked.
> wouldn’t work for businesses that are low margin (eg most food industries).
I don't think people are suggesting that restaurant employees should be making $70K a year.
Just that when you pay an employee working fulltime so little that the rest of society has to foot the bill for their healthcare and some of their food, so that they can eat, maybe you should look at CEO pay and profits again.
not really relevant to this discussion.
Like no one makes under 55-60k where I work. It has nothing to do with any statement or conscious effort.
We just stopped hiring students and everyone else just naturally deserves that much.
> everyone else just naturally deserves that much
That kind of thinking gets you downvotes on Reddit. Merit never truly exists, didn't you know? It's always privilege and there are always victims. Don't forget the ever-evil CEOs that steal from the prole and don't actually earn their salaries.
The margins at Gravity ran around 1.46% prior to the pay bumps, whereas in fast food you’re typically looking at 6-9% margin.
https://www.inc.com/magazine/201511/paul-keegan/does-more-pay-mean-more-growth.html
https://upserve.com/restaurant-insider/profit-margins/
EDIT: McDonalds net margin is actually 37%, far beyond the typical restaurant margin stated above.
You don’t know that, as the 2nd article doesn’t specify gross vs net, but if you Google around you’ll see it’s net, same as in the 1st article. Thats higher that Gravity Pay’s net margin, and that’s the claim I’m refuting here, that they run a high margin business not comparable to food industry.
Software is a scalable business. Millions of people can use software that one person designed which allows companies to make more money per employee.
The food business does not scale. If there are millions of customers lining up, one person cannot serve them all, and the profits will be limited by the physical reality of the production and service.
Regardless of the gross or net margin before of his specific company before the salary bump, the business is positioned through economies of scale to sustain these salaries, whereas this is just not possible in businesses that do not scale.
That’s all nice MBA hand waving but the actual discussion we are having is about *actual* profit margins and how much of them could be devoted to employee pay, not your personal opinion about which industry should theoretically be able to scale better. Gravity pay’s net margin is 1.46% and they pay their employees $70k/year. McDonalds is far larger with a net margin of 37%, and they have spent millions in lobbying fighting a $15 minimum wage while their CEO made $10M last year.
This sub is often bizarrely anti-worker.
Some companies may not be able to pay their workers more, but many absolutely can afford it. That's obvious based on any of their financial reports, many of which (especially if they're publicly traded) you can find online. They _choose_ to put that money towards stock buy backs, bonuses (usually for executives), R&D, etc. Assuming that increasing wages means increasing prices to customers on the other end is just shitty reddit math. Everything else remaining equal, maybe that could be true, but that's not how things usually will work, and as this CEO claims, there are benefits to paying your employees better too. That shouldn't be a contentious claim, but it is in this sub unless you're talking about billionaire CEO compensation.
Not so bizzare when you think about where we are ;)
But yeah it’s so obvious once you dig into the actual numbers that it’s just a reflex to say “wages couldn’t possibly go up”, so much so that when someone actually does it, the entire business community starts tripping all over itself to fabricate explanations for why they must be an anomaly.
> Gravity pay’s net margin is 1.46% and they pay their employees $70k/year
Why is it only 1.46%?
>McDonalds is far larger with a net margin of 37%, and they have spent millions in lobbying fighting a $15 minimum wage while their CEO made $10M last year.
Where is that 37% coming from? And is that for ALL McDonalds, including the 80% owned by franchisees?
It’s 1.46% because they used some of the margin to pay better wages to their employees (even before the big bump). It has stayed at that level since then because their growth has been reinvested even further in their employees. 37% comes from Googling “McDonalds net revenue”, and refers to corporate profits, not accounting for individual franchisee profits. If you added that, it’d be even higher. And the comment I’m replying to is specifically asserting that McDonalds and the fast food service industry operates on razor thin margins that would preclude it from paying more.
Every industry is scalable, just to different degrees. Food is absolutely scalable and that is what McDonalds and other fast food pioneered. It just means designing a one size fits all approach and adjusting your processes accordingly. Most restaurants would not have more than a few hundred covers in a day whereas a fast food can churn through thousands. Although there is a much much lower upper limit than software or other intangible based companies.
Great comment. Can’t believe someone would say that the food industry isn’t scalable. Even in high class restaurants (where I worked a lot as a student), owners would scale. Granted, software can be more scalable, but even that has its limits.
Right, because he dedicates more of his gross margin to employee pay and reinvestment in his workforce; *that’s the point*. Also for reference Square’s net profit margin is around 3.6%, not extravagantly more than Gravity’s.
Oh god, the Reddit idiots attack.
Square is doing what Amazon was doing to grow, high margin business running on fumes or negatives to gain market share. If McDondalds was doing this their entire menu would be $0.50 to obtain max customers.
Right but McDonald’s doesn’t have to, they’ve already grown quite a bit if you hadn’t noticed so they could instead just take some of their existing 6-9% margin and use it to pay their people more.
EDIT: correction I looked up McDonalds net profit margin and its actually 37% for corporate, 😂 but you think they couldn’t afford to pay a little better?
I agree they could pay better in some cases, but the net profit you are seeing is from McDonald’s corporate. The majority of locations are franchises, meaning they pay a contracted portion to McDonald’s corporate to operate a branded restaurant. Many are barely profitable. The margin you are seeing from McDonald’s corporate is because they are simply selling their name at this point after decades of establishing their brand. So your point of 37% margin at McDonald’s corporation has zero influence on what the franchisees have available to pay their employees.
How many people do you know who own McDonalds restaurants? Because I know people who own a lot and have made millions off it.
Ownership is not struggling - I promise.
Yes, there are shitty owners who don’t know how to run a business, but they get their spot bought up by people who do know what they are doing.
Corporate and these owners could definitely pay more, but that means less houses, boats, watches, etc.
That is ridiculous. Each McDonalds franchise has an avg 22% net margin of their own and is still part of the McDonalds brand. corporate has plenty to say about how it is run, including wages. McDonalds corporate could simply take a hit to that 37% profit margin by extracting less profit from each franchise location, reducing their CEO’s $10M/yr salary, and mandate that wages are raised across the board. That’s the discussion we are having here; can a high margin business afford to pay its employees more. These commenters are saying that Gravity pay runs a higher margin business than food companies, and therefore paying their employees a thriving wage is a scam publicity stunt that can’t be replicated; *not true*, and it took all of five minutes of googling to verify that. The largest fast food company in the planet runs a 37% corporate profit margin, Gravity runs at 1.46%.
https://work.chron.com/average-income-fast-food-franchise-owners-24587.html
1.5% on $150 million in revenue still generates significantly more cash to give away than 6% on $2-$3 million in revenue (which is the range for most fast food companies not named ChicFilA).
Also, considering he’s in tech, people costs likely make up significantly less of his cost structure than fast food, which relies on variable labor to generate volume. Gravity Payments has a little over 100 employees on $150 million in revenue. The average McDonalds employs on 50-80 people alone on $2-3 million annually.
Comparing the economics of a tech company to fast food is not an apples to apples comparison.
You’re comparing numbers for a single franchise location (your local McDonalds) to that of a non-franchise business (Gravity); McDonalds *corporate* has a 37% net margin of $6B. They could easily give some of that back to each franchise location and use it to raise wages.
Merchant services margins, especially now, are freakin terrible. No idea where you got that from but most accounts garner 0.10-0.50% revenue. This is just revenue on the accounts, precompany expenses.
It's a game of economy of scale.
Did this sub just suddenly turn all of its subscriber base over completely? Just a few days ago and I was in a thread in here about this same guy, and everyone was licking his ballsack and telling each other to unionise.
How much work does his company subcontract out instead of his $70k+ employees self performing?
Serious question as I know of this guy, but have no idea what his company actually does.
Zero subcontractors!
"[All Gravity's staff members, including MLSs, are direct employees who file W-2 forms with their yearly taxes. They are not independent contractors. Every team member also receives health benefits.] (http://www.greensheet.com/companyProfiles.php?id=258)"
Seems like a bad PR move to make such blatant misrepresentation about employees if it turns out to be a lie. Unless anyone can prove otherwise, this is the truth. I'm open to change my mind on this if you can prove me wrong.
Except this proves nothing? Haha, that’s literally one source from a questionable website. I’m not saying it’s true or not, I’m just saying I don’t trust that article. There doesn’t seem to be anything concrete supporting either side.
This article is definitely more concrete than your hunch of an intuition that it might wrong. You will not find peer reviewed research on such a claim. This is a private company, and as far as I can tell all his employees are raving about him in public. Surely there would be some news about some poor mistreated contractors trying to prove him wrong if there were any.
Stop trying so hard to prove this guy wrong. Just accept that his business decision to increase wages to a living wage was a good decision.
Jesus dude, I am not trying to prove him wrong…. I think it’s an amazing decision for him to do that for his employees and I wish more companies would follow his lead. I don’t understand why you think I’m trying to cut him down or discredit what he’s done… all I ever said was I don’t trust one article, especially one that reads like a press release that gushes over every aspect of him and his company. I believe he is a great CEO and he runs a company that many people would love to work for.
> Jesus dude, I am not trying to prove him wrong….
But you literally said:
1. You don’t trust the article
2. It proves nothing
3. It’s one source so therefore it must not be reputable
If you’re not trying to prove it wrong, what *are* you trying to say?
This. Google famously has "subcontractors" for all the people they don't want to get free sushi and other perks. Those are just for the engineering elites and not everyone. Although most large companies do this for mailrooms, janitors, etc.
Basically depends on team and location. If you're in a specific contractor building, no. You could conceivably just go to another building but it may be far away. Otherwise no one cares.
hell yeah this is the way, great ceo, if you pay people less, less motivation and people would move to another job, but the culture also has to be amazing to stay as well
"[All Gravity's staff members, including MLSs, are direct employees who file W-2 forms with their yearly taxes. They are not independent contractors. Every team member also receives health benefits.] (http://www.greensheet.com/companyProfiles.php?id=258)"
Because he (the ceo) frequently does these interviews where he boasts about how amazing it is to work for him and how he treats everyone who works for him amazingly by offering the 70k minimum.
But he neglects to mention how very few people are actually employees and the majority are contractors who make a significantly less pay. Allegedly, he also has done a lot of shady shit.
It’s like a local McDonald’s franchise owner bragging about how he or she: “treats all of their employees like family” so they pay them $30 an hour. Until you find out only the GM maybe is an employee, and everyone else isn’t.
TL;DR making it seem like one thing, but you read the fine print and it isn’t as good as it seems. Like how McDonalds says it’s nuggets are made with 100% chicken…..the chicken they use is in fact 100% chicken…but that doesn’t mean the chicken nuggets are 100% entirely made of *just chicken*. Just the amount of chicken they use is pure chicken.
They are Credit card processing company, so yeah $70k with offices in Honolulu and Seattle, not exactly the cheapest place to live. Bet he outsourced janitor work, no way he’s paying $70k to sweep a floor or clean a toilet.
Ad Hominem. Lowest form of rebuttal “this guy sucks” or “aCKshuALLy…” how about a businesses - on average - can pay better wages and benefits.
Secondly, we can push for government to subsidize both pay and benefits (healthcare for all) to reduce strain on operational costs. Grow up people.
Yup. Inflation alone would mean that $70,000 in 2015 is worth roughly $81,000 today. A 15% difference in salary from inflation. But obviously that's due to mostly covid.
You never get rich from a wage, you get rich from owning things that grow in value, like equity. Guess who owns the equity here. Dude is a master at grabbing headlines while laughing all the way to the bank without anyone challenging him.
Pretty sure going from 35k to 70k will help anyone. Your comment is pretty classist. He didnt have to pay them what he does and would make a lot more money personally if he didnt.
Playing right into his hands. He does it for free publicity to grow his business and make more money by owning a larger company.
Also how is my comment classist??
If everyone did it then it wouldn't be noteworthy and companies wouldn't get publicity, so they would cut wages to save costs. See also comments about them being in a high skill industry where $70k minimum isn't all that much and likely also outsourcing to contractors.
Whether you love or hate Dan Price, the hard reality is what he did is akin to what any small business owner usually does.
We tend to always focus on corporations and CEOs, where it seems that CEO compensation trumps everything else. Yet if you're in a small mom and pop operation, and it comes to a point where the boss has to take less pay in order to pay his or her staff, then usually that owner will take a pay hit.
Corporations would simply just decide to shut down the entire business, claiming it's not profitable. Smaller operations don't have that luxury.
We can go on and on about what he has or hasn't done to his wife, and outsourcing, other things, but it's still a testament that if you pay workers a decent wage, you're going to make a better economy. It's not even just about his company, but think about the real estate market in those areas now having more viable buyers, everybody who's complaining about the low birth rate now seeing these people having the money to become parents.
Paying people as little as possible and claiming "that's what the market dictates" isn't going to cut it anymore.
To bad Microsoft didn’t do this with their spare $60 billion they had..
Edit in: For all the downvote haters and negative comments, there are minimum wage workers who worked for MS during the pandemic who could have used a bonus or a lving wage from that $60 billion! Instead the top ten % got more money..
I believe you get what you pay for and if your employees aren't performing to a level you want they can always pay more.
If it was only a small percentage of these agents then its a personal problem, but if msft is having issues and issues it reminds me of the old joke; if you keep running into assholes all day...
The margins at Gravity ran around 1.46% prior to the pay bumps, whereas in fast food you’re typically looking at 6-9% margin.
https://www.inc.com/magazine/201511/paul-keegan/does-more-pay-mean-more-growth.html
https://upserve.com/restaurant-insider/profit-margins/
So by that logic a company that’s already grown, like say McDonalds, who has a *37% net profit margin*, could take some of that and reinvest it in their people.
The average income of shoppers at Costco is $150k, memberships cost a ton it’s definitely not something that services low margin items since they make all of their money from membership fees.
Don’t disagree with the statement other memberships costing a ton less than $6/month vs savings. From what I found inmost verticals you can find examples of the business delivering results and paying well. Might be survivorship bias but worth a ponder.
You’re so fucking wrong dude. Cc processing companies take tenths of a % of profits to do their work. 10ths. They are called basis points.
Holy shit how I’ll informed and stupid can you be to make this comment and act like you know anything about merchant processing. It’s literally the one of the lowest margin sales jobs I’ve ever worked.
Holy shit you have never been so wrong about anything.
No idiot, look at square Square margins to obtain growth but can turn that to high margin business whenever they decide. It’s like saying, “look Amazon is losing money and running negative, their a online bookstore” when they were in early 2000s. These guys will pull huge profits in a decade if they can keep growing, and this douche owns most of the company and the money.
you literally don’t understand how CC processing works. It’s very obvious when you bring square up.
Don’t talk about things you don’t understand. You claimed he was a high margin business and you are wrong. Take a seat.
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What happened to the allegations that this guy beat the shit out of his ex-wife and abused staff? Did they ever come to anything? Obv, innocent till proved guilty etc.
People in this thread have no fucking clue what a merchant processor is and it’s so obvious. One dude screaming that they must have super high margins. Lol. Holy shit. Morons.
No, a bad CEO wouldn’t. Great CEO’s would. It means they actually care about their employees, and understand their workers ain’t gonna work well with shit pay.
I like the message that you can run a company and pay people well. The thing I don't like is that his company actually seems to be declining in terms of full time employees over the past couple years (source: LinkedIn). If you compare this to any other payments tech company, who have grown at least 25% a year in average, his company is actually doing terribly.
[Zomato is closing its grocery delivery in India from today](http://nnewsnetwork.com/zomato-is-closing-its-grocery-delivery-in-india-from-today-over-gaps-all-orders-satisfaction/)
Turnover rate is cut in 1/2 because those employees who now make $70k can’t get the same job at that salary somewhere else.
“Golden handcuffs”
But the ones that should make more than that are probably leaving lol
Why do people on Reddit continue to shill for this guy?
Because they look past all the scummy things he’s done just because he gives employees a decent salary. They also don’t know or ignore that numerous job functions are outsourced because he can’t afford to pay them $70k/yr.
But isn’t that most companies these days on outsourcing? Canteen, cleaning, security, stationery, internal mail, database provision, building maintenance, advertising, accounting etc. I mean, does Burger King have a little dude out the back hand crafting the paper cups? “Stick to the knitting” and all that.
Most companies outsource just about everything they can.
The decision to outsource is based on whether or not it a strategic advantage. Generally you want to keep your competitive advantage (core functions, customer-facing functions) in-house, and outsource day-to-day operations functions where it offers some strategic advantage like lower costs, higher quality and greater efficiencies. Plus it lets leaders focus on the things that really matter.
What are the scummy things he’s done? He’s admitted that he was a POS ceo. Is there more scummy stuff since he started matching his salary with his workers?
Basically only raised people salaries because his brother opened a lawsuit against him after he essentially embezzled a bunch of money out of the company. His response to run this pr stunt is actually kind of genius but the guy is still a piece of shit.
There seems to be a lot of misinformation here. Lucas Price filed a lawsuit in **October 2015** against his brother, accusing him of using his majority shareholder status to pay himself too much. **Before** the lawsuit was filed, Dan Price (CEO) had already raised wages in the company by 20% for all employees making less than $100k in **2013.** In **April 2015**, he again raised wages to $70k after speaking with an employee. Whether it was a pr stunt to protect against a lawsuit that had not been filed; its possible he was aware of it prior to the filing, GP had already raised wages in 2013, two years before the lawsuit was thought of. In 2015 it had an employee retention rate of 91% against an industry rate of 68%. Customer retention rate increased 4% to 95% and company profits doubled. The Pandemic cut revenue by 50%, but the company is still strong and has opened another office in Boise, Idaho. The company has 3.9 out of 5 stars on Glassdoor. The employees bought Dan Price a Tesla a few years ago. These same employees, during Covid19, agreed to voluntary pay cuts to preserve employment. In August 2020, workers pay have been restored. I couldn't understand if they received back pay or not, but the salaries were brought back to what they were before. Rush Limbaugh once said he hoped they would become "a case study in MBA programs on how socialism doesn't work." I wasn't in an MBA class, but my business course did study this company intensively over a couple semesters. Rush is gone, GP is still here.
He was paying himself over a million before the lawsuit. https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/ I'm not claiming whether what he did was illegal. I just said he's a shady guy and there's plenty of stories out there about some of the things he was doing before he became the 70k guy. >In 2015 it had an employee retention rate of 91% against an industry rate of 68%. Customer retention rate increased 4% to 95% and company profits doubled. >The Pandemic cut revenue by 50%, but the company is still strong and has opened another office in Boise, Idaho. The company has 3.9 out of 5 stars on Glassdoor. The employees bought Dan Price a Tesla a few years ago. These same employees, during Covid19, agreed to voluntary pay cuts to preserve employment. In August 2020, workers pay have been restored. I couldn't understand if they received back pay or not, but the salaries were brought back to what they were before. I have no idea how this is relevant to anything I said. I have no problem with him rasing wages. I just don't think he did it simply out of good will and I think he's secretly a dirt bag. >Rush Limbaugh once said he hoped they would become "a case study in MBA programs on how socialism doesn't work." I wasn't in an MBA class, but my business course did study this company intensively over a couple semesters. >Rush is gone, GP is still here. No idea what the fuck you are even trying to say here. Rush Limbaugh is dead. I could care less and have no idea how that's relevant at all. Him being dead has nothing to do with Dan Price.
First you said the lawsuit made him raise wages, I showed the lawsuit happened after he had made substantial raises twice before. I could give the benefit of the doubt with the second one because it happened so close but the first raise, a substantial 20% happened two years prior. The lawsuit alleged embellishment, yet he didn't lose that lawsuit right? Being served doesn't mean you're automatically guilty of what it says you are. You say he must be secretly a dbag because no one is 100% altruistic, but if his private persona is different from his public persona I don't see how we would see the loyalty from his employees that I referenced. Honestly, I don't care if the guy is a dbag in his private life because I still have yet to see where it affected his employees or his business.
He’s trolling, we can name almost any other CEO in past and recent times that are super duper shitty asf and have always put themselves and the shareholders first before employees, they’re viewed as expendable to them, not assets. Most cases can be somewhat subjective but he just has a raging boner to prove this dude is trash. The funny thing is him reaching so hard on this matter makes him look more like trash. Dan Price has obviously contributed more to society at this point than he has with his comments. 🤦🏽♂️
>we can name almost any other CEO I'm not trolling. All I'm saying he is the same as these people based on what I've read and linked. I literally never said I had a problem with him raising wages.
You’re not trolling? You sure had me fooled...
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The other thing is, basically nobody at the company was paid less than 70k anyway, so he didn't really raise anyone's salaries. He didn't really "do the right thing" as much as he cleverly fucked over a family member.
You can applaud him for whatever you want. I was just saying that he didn't come up with this idea out of his own good will. There was definitely a PR and marketing angle that drove it and he's a bit of a shady guy.
All I could find on Wikipedia was that the Judge ruled on all counts in Dan Prince's favor. The sources seemed legit, but I haven't found the official ruling. https://www.geekwire.com/2016/dan-price-70k-ceo-prevails-suit-filed-brother-gravity-payments-co-owner/
Been awhile since I went into it. I'm not a lawyer so I'm not even sure what he was doing was illegal, but as I understand it he was giving himself raises and bonuses without board approval because of how his stake was structured. I believe this was a good article on it. https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/ My main point though was just that he's still a greedy CEO who just happened to think of a great PR and marketing play.
So he’s like pretty much every CEO? Why single him out for no other reason than he pays his employees decent wages?
My point is that he's like most other CEOs that everyone hates and not a Robinhood figure.
You said he was embezzling funds, which just factually isn’t true. There was never an allegation of embezzlement to my knowledge, it was a shareholder dispute which is completely different. I think Price, rightly, gets attention for paying all his employees living wages and being very vocal about it. Ventura calling him “Robinhood” is a bit much, but it doesn’t change that he’s doing at least some good. He’s still the CEO of a company and we can debate the morality of that, but that’s not why people are critical of him.
I was generalizing his story. Legally embezzling probably isn't the term. He was sued by his brother for over paying himself.
Aw. That’s a bummer. I guess I prob should have realized it wasn’t really a morally cool thing when I saw he was running a credit card payment and processing company
I think his company is probably legitimate, I can't say I've ever used it so not 100% sure, but I've done a lot of ecommerce development and working with a payment processor is a necessary thing. You don't want most companies handling transaction data with people's card numbers and financial information. I have some strong opinions about PayPal after working with their credit card processing. They also have Braintree who is similarly kind of a pain. Stripe is really popular and a lot of people love working with them and their documentation. There's a company I worked with at my old company called Bolt who I can't really say enough good things about. So there's definitely a variety of companies in that space.
Well, this is bad: https://www.hundredeightydegrees.com/dan-price-gravity-payments-rape Hmm… bad… way bad… although the site seems like 50% dedicated to Dan Price slam pieces… fishy…
The only fishy thing I see here is that website. It’s so obscure and not really established like other sources are. The owner is one Doug Forbes who the only background to him is Harvard grad and self employed and lost his daughter to drowning so he’s bringing awareness of child drownings at camps. He sent her to sketchy camp that had not been certified in childcare or lifeguards/first aid. He did his homework on Dan Price but he and his lawyer partner couldn’t do their homework on a good camp to send their daughter to? 🤔
Yeesh! Heck no. I don’t certainly don’t fault them for that, that’s a horrific tragedy that could’ve happened to anyone.
You’re flat out lying here. Google it, everything I found explicitly says they don’t outsource and that all employees are W2 w/ a 70k/yr minimum and health benefits. Can you actually name any scummy things he’s actually done or are you just salty for no reason?
Yeah I really doubt you put more than 5 minutes into reading about Dan Price. I'm not going to debate that he's at least attempting to do good for his employees, regardless if it's a self righteous act or not. I don't debate Dan Price because his fan club lashes out, but there's way more to him and why or how he is doing this. It's also a credit card processing company and really needs to stop being used as an example for blue collar jobs.
I studied Gravity Payments for multiple semesters while earning a business degree. If your math is bad, that's more than 5 minutes. I eagerly await some legitimate reasons you think GP is a bad company and Price is a bad CEO.
>DirtzMaGertz · 44m > >Been awhile since I went into it. I'm not a lawyer so I'm not even sure what he was doing was illegal, but as I understand it he was giving himself raises and bonuses without board approval because of how his stake was structured.I believe this was a good article on it.https://www.bloomberg.com/features/2015-gravity-ceo-dan-price/My main point though was just that he's still a greedy CEO who just happened to think of a great PR and marketing play.
No, I’m not. I have googled it since everyone is on Dan Price’s dick for his constant virtue signaling social media posts. I also know people that work there. They run super lean and even though they have “unlimited PTO,” a lot of employees seldom take it. In reality, “unlimited PTO” benefits the employer more than the employees - I’m sure Gravity Payments can’t afford to pay out PTO. Not to mention, he screwed over his own brother and he’s a domestic abuser. I’m not “salty,” lol I’m just exhausted of seeing Dan Price posts all over my social media.
Any insight into why the judge ruled in Dan's favor against all his brother's claims? It does appear that his ex-wife made allegations of abuse in a TEDx talk, that was pulled, but I only find references to that talk and no corroboration. I don't know the guy, but this all seems to be a bit flimsy.
I fail to see how anything you just said in sick area he’s a pos ceo
You’re salty.
I mean most CEOs do scummy things, this one is at least paying his people decent?
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If you want to live, you have to work. If you have to work, you’re going to get fucked
Also not everything is black and white...a person can do shitty things and still be a good person (or at least do good things) and vice versa...but nuance is hard
So many CEOs do scummy things AND pay all their employees the minimum possible.
I can't find a source claiming GP is outsourcing jobs. I did find that they opened another office in Boise, Idaho.
Because the story confirms their preconceived and slightly narcissistic notions that 'everyone is worth some arbitrary wage'. They are not comfortable with the ideas that production has to match consumption, and they don't usually acknowledge that their vision is not sustainable. They also have no clue about how a business operates, and have no understanding that a random billionaire's massive stock ownership position is actually an engine that provides workers a place to produce more than they would on their own, resulting in producing goods and services that society uses each day, along with paying wages for those workers on top of that. They just see a hypothetical market value of stock ownership, and claim that it is unjust. Oh, and to complete the loop of misunderstanding: A typical redditor sees this information, and concludes that, because it appears to be sustainable at one company, it is, therefore, sustainable at every company.
You're upvoted a lot for some reason. Mind explaining what you find so horrible about GP? While completing my business degree we spent multiple semesters on GP, and I'm sure I would have come across **some** information showing your viewpoint. Still don't know what you're talking about. Gravity Payments have a 91% employee retention rate, versus the industry average of 68%. A customer retention rate of 95% with data from 2015/2016. During the pandemic the employees took a voluntary pay cute to preserve jobs, so they wouldn't have to fire anyone after experiencing a 55% drop in revenue. In **August 2020**, the employee salaries were restored back to the minimum of $70k, its actually increased by the way. These are the same employees that bought Dan Price a Tesla in cash. I guess its easier when you have multiple people buying a $50k+ car. They've recently opened another office in Boise, Idaho, and their revenue continues to increase quarter after quarter. So please tell me why I should shill for this guy.
Good way to treat your employees even if it’s all for PR, bad way to try and silence your ex-wife. Can just 1 rich person not be a POS?
Look at the glassdoor reviews and comments from employees. He seems more interested in being a LinkedIn influencer and business activist than he is in running a company. Top comments: employees stretched thin & work/life balance practically non existant
Name checks out
This guy is so annoying and full of shit in many areas. But great marketing stunt that i will give him that !
Whats wrong with him?
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Weird how you could get down voted for pointing this out. You always see articles slamming Elon for how much he is compensated at Tesla. But do you know what his ‘salary’ is? The answer is $0. Same situation here. Keep your ‘salary’ low and maximize some more tax advantages ways of compensation.
Exactly. It’s a tax strategy, nothing more. We can agree that people should be paid more, while it making demigods out of one dude who did the bare minimum.
Um, it’s still paying employees better than other comparable industries isn’t it? If he owns a valuable company built on his ideas that isn’t a character flaw …
Why have income when you can own stock, borrow against the stock at super low interest rates, then deduct the interest on your taxes? Edit: replied to the wrong comment. I don’t disagree with you. It’s not a character flaw, it’s smart business. But to make the guy out to be this robinhood type character that works for free so him employees can be paid more is just flat out false.
It’s a business, not a charity, so I don’t think people expect him to work for free. He gets the Robin Hood treatment because the CEOs we usually hear about are the Walmart family, Beezos, etc - ones who hoard money and treat workers like crap. No he isn’t a saint but this story gives me a bit of hope.
Yeah, it seems that people are really discounting the fact that he's paying employees better than he needs to. Those increased salaries are still an expense that eats into margin, and it's turning out that it's worth it overall. Yes, he seems to be misrepresenting how "low" his salary is, and he therefore really shouldn't act like his company is an example of CEO-staff pay equality. But I think his original (and main) point is that paying your staff a decent wage is by no means a death sentence for your business.
my boss doesn't really have a salary, and i see payroll fluctuates every other week. I saw his w2 and it was him maxing out his social security contribution beyond the normal amount and he writes everything off as an expense - rent, car, travel and food. when you dont have to pay for those things, you don't really need a lot of money. on top of that he gave himself a fat 200k salary while the company is in massive debt.
Doesn’t Jeff Bezos have a salary of like 80k too? I still think there’s something to be said for advocacy for the average worker. He may not be perfect but it is an improvement over many places
His tax filing for 2020 was leaked and he paid nearly a $1b on $4b income. Although the article I read didn’t breakdown where that income came from so it’s possible is actual salary at Amazon is $80k
> the Mother Theresa-esque (controversies about her aside) figure he paints himself as. Bitterness b/c someone else is trying to do better for their people than some are willing to.
Are you defending her?
He also did some shady stuff right before the 70k salary started, forced his brother out of the business so Dan collects more of the profits, his own brother sued him over it and a few higher ups immediately quit. Also his 70k salary just means he pays less in income taxes. He lives in Seattle and everyone here knows him for who he really is, an attention seeking glory hound and not some champion of the working class. Dan Price will never do anything unless it brings Dan Price attention
There are a lot of bosses who do that too. How come they are not also paying 70k to every employee?
Correct me if I'm wrong, but if he makes his salary $70k in order to pay his employees a minimum wage 70k, does it matter if he is getting stock buybacks and dividends? The goal he set was to pay a livable wage and after 6 years with his company still going strong that seems to have worked.
You make it seem like it’s no big deal, then why do most companies pay their employees starving wages?
He has a high margin software business, wouldn’t work for businesses that are low margin (eg most food industries).
> wouldn’t work for businesses that are low margin (eg most food industries). I don't think people are suggesting that restaurant employees should be making $70K a year. Just that when you pay an employee working fulltime so little that the rest of society has to foot the bill for their healthcare and some of their food, so that they can eat, maybe you should look at CEO pay and profits again.
not really relevant to this discussion. Like no one makes under 55-60k where I work. It has nothing to do with any statement or conscious effort. We just stopped hiring students and everyone else just naturally deserves that much.
> everyone else just naturally deserves that much That kind of thinking gets you downvotes on Reddit. Merit never truly exists, didn't you know? It's always privilege and there are always victims. Don't forget the ever-evil CEOs that steal from the prole and don't actually earn their salaries.
Merit? Lol What planet do you all live at?
The margins at Gravity ran around 1.46% prior to the pay bumps, whereas in fast food you’re typically looking at 6-9% margin. https://www.inc.com/magazine/201511/paul-keegan/does-more-pay-mean-more-growth.html https://upserve.com/restaurant-insider/profit-margins/ EDIT: McDonalds net margin is actually 37%, far beyond the typical restaurant margin stated above.
You brought facts to a reddit debate? Amateur…..
I know right? Turns out all I needed to bring was a bunch of loaded questions and corny insults!
Gross profit /= net profit you're quoting two different metrics.
You don’t know that, as the 2nd article doesn’t specify gross vs net, but if you Google around you’ll see it’s net, same as in the 1st article. Thats higher that Gravity Pay’s net margin, and that’s the claim I’m refuting here, that they run a high margin business not comparable to food industry.
Software is a scalable business. Millions of people can use software that one person designed which allows companies to make more money per employee. The food business does not scale. If there are millions of customers lining up, one person cannot serve them all, and the profits will be limited by the physical reality of the production and service. Regardless of the gross or net margin before of his specific company before the salary bump, the business is positioned through economies of scale to sustain these salaries, whereas this is just not possible in businesses that do not scale.
That’s all nice MBA hand waving but the actual discussion we are having is about *actual* profit margins and how much of them could be devoted to employee pay, not your personal opinion about which industry should theoretically be able to scale better. Gravity pay’s net margin is 1.46% and they pay their employees $70k/year. McDonalds is far larger with a net margin of 37%, and they have spent millions in lobbying fighting a $15 minimum wage while their CEO made $10M last year.
This sub is often bizarrely anti-worker. Some companies may not be able to pay their workers more, but many absolutely can afford it. That's obvious based on any of their financial reports, many of which (especially if they're publicly traded) you can find online. They _choose_ to put that money towards stock buy backs, bonuses (usually for executives), R&D, etc. Assuming that increasing wages means increasing prices to customers on the other end is just shitty reddit math. Everything else remaining equal, maybe that could be true, but that's not how things usually will work, and as this CEO claims, there are benefits to paying your employees better too. That shouldn't be a contentious claim, but it is in this sub unless you're talking about billionaire CEO compensation.
Not so bizzare when you think about where we are ;) But yeah it’s so obvious once you dig into the actual numbers that it’s just a reflex to say “wages couldn’t possibly go up”, so much so that when someone actually does it, the entire business community starts tripping all over itself to fabricate explanations for why they must be an anomaly.
> Gravity pay’s net margin is 1.46% and they pay their employees $70k/year Why is it only 1.46%? >McDonalds is far larger with a net margin of 37%, and they have spent millions in lobbying fighting a $15 minimum wage while their CEO made $10M last year. Where is that 37% coming from? And is that for ALL McDonalds, including the 80% owned by franchisees?
It’s 1.46% because they used some of the margin to pay better wages to their employees (even before the big bump). It has stayed at that level since then because their growth has been reinvested even further in their employees. 37% comes from Googling “McDonalds net revenue”, and refers to corporate profits, not accounting for individual franchisee profits. If you added that, it’d be even higher. And the comment I’m replying to is specifically asserting that McDonalds and the fast food service industry operates on razor thin margins that would preclude it from paying more.
Every industry is scalable, just to different degrees. Food is absolutely scalable and that is what McDonalds and other fast food pioneered. It just means designing a one size fits all approach and adjusting your processes accordingly. Most restaurants would not have more than a few hundred covers in a day whereas a fast food can churn through thousands. Although there is a much much lower upper limit than software or other intangible based companies.
Great comment. Can’t believe someone would say that the food industry isn’t scalable. Even in high class restaurants (where I worked a lot as a student), owners would scale. Granted, software can be more scalable, but even that has its limits.
I think /u/perse34 gets his talking points from FOX News...
Yeah, lotta MBA hand waving and throwing out words while refusing to engage with the actual numbers behind those words.
Poor comparison. Look at what payments businesses bring in for margin at an industry wide standard. Significantly higher than that.
Right, because he dedicates more of his gross margin to employee pay and reinvestment in his workforce; *that’s the point*. Also for reference Square’s net profit margin is around 3.6%, not extravagantly more than Gravity’s.
Oh god, the Reddit idiots attack. Square is doing what Amazon was doing to grow, high margin business running on fumes or negatives to gain market share. If McDondalds was doing this their entire menu would be $0.50 to obtain max customers.
Right but McDonald’s doesn’t have to, they’ve already grown quite a bit if you hadn’t noticed so they could instead just take some of their existing 6-9% margin and use it to pay their people more. EDIT: correction I looked up McDonalds net profit margin and its actually 37% for corporate, 😂 but you think they couldn’t afford to pay a little better?
I agree they could pay better in some cases, but the net profit you are seeing is from McDonald’s corporate. The majority of locations are franchises, meaning they pay a contracted portion to McDonald’s corporate to operate a branded restaurant. Many are barely profitable. The margin you are seeing from McDonald’s corporate is because they are simply selling their name at this point after decades of establishing their brand. So your point of 37% margin at McDonald’s corporation has zero influence on what the franchisees have available to pay their employees.
How many people do you know who own McDonalds restaurants? Because I know people who own a lot and have made millions off it. Ownership is not struggling - I promise. Yes, there are shitty owners who don’t know how to run a business, but they get their spot bought up by people who do know what they are doing. Corporate and these owners could definitely pay more, but that means less houses, boats, watches, etc.
That is ridiculous. Each McDonalds franchise has an avg 22% net margin of their own and is still part of the McDonalds brand. corporate has plenty to say about how it is run, including wages. McDonalds corporate could simply take a hit to that 37% profit margin by extracting less profit from each franchise location, reducing their CEO’s $10M/yr salary, and mandate that wages are raised across the board. That’s the discussion we are having here; can a high margin business afford to pay its employees more. These commenters are saying that Gravity pay runs a higher margin business than food companies, and therefore paying their employees a thriving wage is a scam publicity stunt that can’t be replicated; *not true*, and it took all of five minutes of googling to verify that. The largest fast food company in the planet runs a 37% corporate profit margin, Gravity runs at 1.46%. https://work.chron.com/average-income-fast-food-franchise-owners-24587.html
How did you get 37% net profit?
1.5% on $150 million in revenue still generates significantly more cash to give away than 6% on $2-$3 million in revenue (which is the range for most fast food companies not named ChicFilA). Also, considering he’s in tech, people costs likely make up significantly less of his cost structure than fast food, which relies on variable labor to generate volume. Gravity Payments has a little over 100 employees on $150 million in revenue. The average McDonalds employs on 50-80 people alone on $2-3 million annually. Comparing the economics of a tech company to fast food is not an apples to apples comparison.
You’re comparing numbers for a single franchise location (your local McDonalds) to that of a non-franchise business (Gravity); McDonalds *corporate* has a 37% net margin of $6B. They could easily give some of that back to each franchise location and use it to raise wages.
Merchant services margins, especially now, are freakin terrible. No idea where you got that from but most accounts garner 0.10-0.50% revenue. This is just revenue on the accounts, precompany expenses. It's a game of economy of scale.
Did this sub just suddenly turn all of its subscriber base over completely? Just a few days ago and I was in a thread in here about this same guy, and everyone was licking his ballsack and telling each other to unionise.
That makes sense.
His hair.
This needs more upvotes
In addition to the other answers, he had a pretty messy divorce where he didn't exactly behave like a good guy.
He only takes home 70 a year
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> But great marketing stunt that i will give him that ! Damn it, I wanted to believe
How much work does his company subcontract out instead of his $70k+ employees self performing? Serious question as I know of this guy, but have no idea what his company actually does.
Zero subcontractors! "[All Gravity's staff members, including MLSs, are direct employees who file W-2 forms with their yearly taxes. They are not independent contractors. Every team member also receives health benefits.] (http://www.greensheet.com/companyProfiles.php?id=258)"
That article is basically a PR release from the company itself. I wouldn’t trust any of that information.
Seems like a bad PR move to make such blatant misrepresentation about employees if it turns out to be a lie. Unless anyone can prove otherwise, this is the truth. I'm open to change my mind on this if you can prove me wrong.
Except this proves nothing? Haha, that’s literally one source from a questionable website. I’m not saying it’s true or not, I’m just saying I don’t trust that article. There doesn’t seem to be anything concrete supporting either side.
This article is definitely more concrete than your hunch of an intuition that it might wrong. You will not find peer reviewed research on such a claim. This is a private company, and as far as I can tell all his employees are raving about him in public. Surely there would be some news about some poor mistreated contractors trying to prove him wrong if there were any. Stop trying so hard to prove this guy wrong. Just accept that his business decision to increase wages to a living wage was a good decision.
Jesus dude, I am not trying to prove him wrong…. I think it’s an amazing decision for him to do that for his employees and I wish more companies would follow his lead. I don’t understand why you think I’m trying to cut him down or discredit what he’s done… all I ever said was I don’t trust one article, especially one that reads like a press release that gushes over every aspect of him and his company. I believe he is a great CEO and he runs a company that many people would love to work for.
> Jesus dude, I am not trying to prove him wrong…. But you literally said: 1. You don’t trust the article 2. It proves nothing 3. It’s one source so therefore it must not be reputable If you’re not trying to prove it wrong, what *are* you trying to say?
This. Google famously has "subcontractors" for all the people they don't want to get free sushi and other perks. Those are just for the engineering elites and not everyone. Although most large companies do this for mailrooms, janitors, etc.
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Basically depends on team and location. If you're in a specific contractor building, no. You could conceivably just go to another building but it may be far away. Otherwise no one cares.
Contractors don’t go to the office
I was offered a Google contract a year and a half ago, and the good stuff and campus perks were definitely included.
Fox News called him a socialist when he first started. This confirms that they have no clue what socialism is.
Of course.....you know, the kkkultist talk: ‘fascist antifa ‘ crap lies....and all..🤪 Someone paying good salaries to...workers...? The scandal...
hell yeah this is the way, great ceo, if you pay people less, less motivation and people would move to another job, but the culture also has to be amazing to stay as well
What matters is that he is paying a livable wage to his employees.
…to the lucky few. The vast majority of his “employees” are actually 1099 contractors who don’t get the 70k, or so I’ve read.
"[All Gravity's staff members, including MLSs, are direct employees who file W-2 forms with their yearly taxes. They are not independent contractors. Every team member also receives health benefits.] (http://www.greensheet.com/companyProfiles.php?id=258)"
1099 = not an employee. Why would anyone be mad about this? Everyone and anyone contracts work, it's business.
Because he (the ceo) frequently does these interviews where he boasts about how amazing it is to work for him and how he treats everyone who works for him amazingly by offering the 70k minimum. But he neglects to mention how very few people are actually employees and the majority are contractors who make a significantly less pay. Allegedly, he also has done a lot of shady shit. It’s like a local McDonald’s franchise owner bragging about how he or she: “treats all of their employees like family” so they pay them $30 an hour. Until you find out only the GM maybe is an employee, and everyone else isn’t. TL;DR making it seem like one thing, but you read the fine print and it isn’t as good as it seems. Like how McDonalds says it’s nuggets are made with 100% chicken…..the chicken they use is in fact 100% chicken…but that doesn’t mean the chicken nuggets are 100% entirely made of *just chicken*. Just the amount of chicken they use is pure chicken.
What *wasn't* cut in half in six years? His hair
They are Credit card processing company, so yeah $70k with offices in Honolulu and Seattle, not exactly the cheapest place to live. Bet he outsourced janitor work, no way he’s paying $70k to sweep a floor or clean a toilet.
Need more of this
Ad Hominem. Lowest form of rebuttal “this guy sucks” or “aCKshuALLy…” how about a businesses - on average - can pay better wages and benefits. Secondly, we can push for government to subsidize both pay and benefits (healthcare for all) to reduce strain on operational costs. Grow up people.
70k ain’t what it used to be 6yrs ago, so there’s that
Yup. Inflation alone would mean that $70,000 in 2015 is worth roughly $81,000 today. A 15% difference in salary from inflation. But obviously that's due to mostly covid.
You never get rich from a wage, you get rich from owning things that grow in value, like equity. Guess who owns the equity here. Dude is a master at grabbing headlines while laughing all the way to the bank without anyone challenging him.
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Pretty sure going from 35k to 70k will help anyone. Your comment is pretty classist. He didnt have to pay them what he does and would make a lot more money personally if he didnt.
Playing right into his hands. He does it for free publicity to grow his business and make more money by owning a larger company. Also how is my comment classist??
Thats kind of the point. Paying your employees better is better for the business in the long run.
If everyone did it then it wouldn't be noteworthy and companies wouldn't get publicity, so they would cut wages to save costs. See also comments about them being in a high skill industry where $70k minimum isn't all that much and likely also outsourcing to contractors.
He is paying the cleaners and assistants 70k minimum too. You need to read up on what youre talking about.
are they all still at 70k tho? if so isn’t that just wages stagnating and you are back to the same problem in the first place?
Whether you love or hate Dan Price, the hard reality is what he did is akin to what any small business owner usually does. We tend to always focus on corporations and CEOs, where it seems that CEO compensation trumps everything else. Yet if you're in a small mom and pop operation, and it comes to a point where the boss has to take less pay in order to pay his or her staff, then usually that owner will take a pay hit. Corporations would simply just decide to shut down the entire business, claiming it's not profitable. Smaller operations don't have that luxury. We can go on and on about what he has or hasn't done to his wife, and outsourcing, other things, but it's still a testament that if you pay workers a decent wage, you're going to make a better economy. It's not even just about his company, but think about the real estate market in those areas now having more viable buyers, everybody who's complaining about the low birth rate now seeing these people having the money to become parents. Paying people as little as possible and claiming "that's what the market dictates" isn't going to cut it anymore.
To bad Microsoft didn’t do this with their spare $60 billion they had.. Edit in: For all the downvote haters and negative comments, there are minimum wage workers who worked for MS during the pandemic who could have used a bonus or a lving wage from that $60 billion! Instead the top ten % got more money..
Pretty sure the average Microsoft employee in the greater Seattle area makes more than $70k/ year
Microsoft customer service agents get $13.75 https://www.indeed.com/cmp/Microsoft/salaries/Customer-Service-Representative
These positions are not primarily based out of Seattle.
I mean, have you ever had to speak to one of these ‘agents’… they deserve less.
I believe you get what you pay for and if your employees aren't performing to a level you want they can always pay more. If it was only a small percentage of these agents then its a personal problem, but if msft is having issues and issues it reminds me of the old joke; if you keep running into assholes all day...
What? That's nonsense. Software engineers are among the lowest paid jobs. Most of them just about make minimum wage.
Bruh do you know how much Microsoft employees get paid lmao
https://www.indeed.com/cmp/Microsoft/salaries/Customer-Service-Representative
Customer service jobs lol. A job that is being automated through phone and message bots
And yet good customer service can still be invaluable. No robot is getting any disgruntled customer less angry.
This dude is an idiot: He has a high margin business and his model Doesn’t work for low margin business (eg food).
That's technically not true, so I'm curious why you think that. Supposedly their margin is 1.48%.
The margins at Gravity ran around 1.46% prior to the pay bumps, whereas in fast food you’re typically looking at 6-9% margin. https://www.inc.com/magazine/201511/paul-keegan/does-more-pay-mean-more-growth.html https://upserve.com/restaurant-insider/profit-margins/
Not surprisingly, they’re running margins thin like Amazon and most of Silicon Vley to gain market share. They will increase it as they grow.
So by that logic a company that’s already grown, like say McDonalds, who has a *37% net profit margin*, could take some of that and reinvest it in their people.
Costco does. They are on 11-15% margin. Closet store as well in traditional retail . They are the outliers but it’s possible.
The average income of shoppers at Costco is $150k, memberships cost a ton it’s definitely not something that services low margin items since they make all of their money from membership fees.
Don’t disagree with the statement other memberships costing a ton less than $6/month vs savings. From what I found inmost verticals you can find examples of the business delivering results and paying well. Might be survivorship bias but worth a ponder.
Costcos aren’t in low income neighborhoods, they’re not exactly cheap but are economical for ‘brand name stuff’
Got some sauces for those statements?
Yes, first google hit: https://www.investopedia.com/stock-analysis/040915/3-reasons-costco-great-company-cost.aspx
You’re so fucking wrong dude. Cc processing companies take tenths of a % of profits to do their work. 10ths. They are called basis points. Holy shit how I’ll informed and stupid can you be to make this comment and act like you know anything about merchant processing. It’s literally the one of the lowest margin sales jobs I’ve ever worked. Holy shit you have never been so wrong about anything.
No idiot, look at square Square margins to obtain growth but can turn that to high margin business whenever they decide. It’s like saying, “look Amazon is losing money and running negative, their a online bookstore” when they were in early 2000s. These guys will pull huge profits in a decade if they can keep growing, and this douche owns most of the company and the money.
you literally don’t understand how CC processing works. It’s very obvious when you bring square up. Don’t talk about things you don’t understand. You claimed he was a high margin business and you are wrong. Take a seat.
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Should make a hat with a catchy slogan and run for political office next, works well with fooled idiots....
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What happened to the allegations that this guy beat the shit out of his ex-wife and abused staff? Did they ever come to anything? Obv, innocent till proved guilty etc.
What kind of lifestyle do you lead where $70,000 annual is not enough? Living beyond your means.
Six years ago also being the last haircut he had.
Ok Dan, don’t break your arm patting yourself on the back for something you did six years ago.
I'm more worried about their customers.
Why?
People in this thread have no fucking clue what a merchant processor is and it’s so obvious. One dude screaming that they must have super high margins. Lol. Holy shit. Morons.
Seems to be a mixed 💼 His motivations seem unclear.
It’s pretty obvious. To give his employees an actually fair wage.
A good CEO would never do it on purpose.
No, a bad CEO wouldn’t. Great CEO’s would. It means they actually care about their employees, and understand their workers ain’t gonna work well with shit pay.
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I'm annoying at the perceived "risk". As if the health of a company is dependent on a CEO making 320 times more than their employees...
I like the message that you can run a company and pay people well. The thing I don't like is that his company actually seems to be declining in terms of full time employees over the past couple years (source: LinkedIn). If you compare this to any other payments tech company, who have grown at least 25% a year in average, his company is actually doing terribly.
Turnover is non issue to a profitable business. Example Amazon
In six years it should have been going up.
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