Analysis Of ' Gravity Payments Of Ceo Dan Price Cuts Salaries

This paper will discuss the reasons why CEOs are not being overpaid. It will apply the utilitarian ethical principle to many a few aspects to CEO compensation and whether or not it is justifiable for such pay. The paper will look at whether or not their performance is justifiable for the pay because they play such a big role in the livelihood of the company along with the principle agency theory and how it is being addressed for the benefit of the shareholders and others involved with the company, the supply and demand of the CEOs, and the paper will describe the comparison of other professions to help link the idea of CEOs being fairly compensated.

In the United States, the cost of living for a single adult with no children is an average of $28,474 every year (Career Trends, screen 1). This seems like a relatively low number, until the amount of people living together increases. A family of six, two adults and four children, rises to an annual cost of $82,900 (Career Trends, screen1). If an adult were to work full-time at minimum wage, they would only be getting $15,080 per year from their employer (University of California, screen 1). This amount of money is still about $14,000 short of how much it costs a single adult to live. In recent discussions of minimum wage, many people argue about whether it should be raised or not. Although the intentions to raise it are good, the outcome

Servant leadership theory’s emphasis on service to others and recognition that the role of organizations is to create people who can build a better tomorrow resonates with scholars and practitioners who are responding to the growing perceptions that corporate leaders have become selfish and who are seeking a viable leadership theory to help resolve the challenges of the twenty-first century (Parris & Peachey, 2013, p 378).

The idea of “servant leadership” may be considered a paradox. Describe this paradox in the context of leadership.

James recalls a story of when he asked his supervisor for a raise stating that he was tired of being paid such low wages for his hard work. His supervisor, Phonse Bean responded with, “Really, by you doing so many jobs, it cuts you high-level pay down to lower pay, to medium grade. Actually, the way I got it figured, you 're fifteen cents overpaid now an hour. But I 'm going to give you a nickel raise-because I think you 're worth it.”

In addition, an expanding conversation about how to end working poverty through decent jobs points out that is to not only important to make minimum wage, but an adequate living wage. For instance, the Raise The Minimum Wage Campain noted, “The minimum wage should be set 10% above the poverty line, using the Low Income Measure”. Unionization employees that get paid above minimum wage feel more comfortable and satisfied with their job, which indicates that they are less likely to resign from their duties. With skilled workers in greater demand, their job opportunities and their

Price then realized that since it was the workers that were making these productivity gains, their minimum wages should increase. As a result, he cut his own salary to fund a company-wide increase of the minimum wage to seventy-thousand dollars (Keegan). Price’s actions reflect the importance of workers and their contributions to a firm. These gains should be going to the workers since they are the source of the productivity gains. CEOs can implement a program or buy technology to increase rates of production, but it is up to the employees as a collective mass to actually execute this action. Disbursing these productivity gains would contribute to increasing the minimum wage, inherently moving families up closer to or above the poverty line. Ranks show that forty percent of Americans between the ages of twenty-five and sixty-six will spend one year below the poverty line and fifty-four percent will spend a year at or near that line (Kiernan 182). For workers to still live in poverty is because without them, there would be implementation of the good or service a CEO is trying to provide. Employees are the basis of production and should be valued more than the current minimum wage. Increasing the minimum wage would also prevent people from working nonstandard hours to earn more money, which would increase the living standard. Workers that have nonstandard hours tend to be single mothers with children, who are then forced to leave their children alone

Antecedents that influence leadership include factors such as the leader’s personality and ethics, followers’ openness, and cultural norms. Furthermore, the leader’s behaviors affect the process. For example, a leader needs to be knowledgeable regarding an organization’s goals to effectively address and handle difficult situations. A servant leader assists followers in achieving purposes. A leader treats followers fairly and respects personal values. The leader helps followers learn to make choices. An ideal outcome is a favorable effect on the followers, organization, and community. The leader can determine which needs will help followers progress and plan to meet those needs through developing programs or obtaining funding (Northouse, 2016).Servant leadership is important for management because it affects employee’s productivity. While a manager requires work to be completed and appears unconcerned if an employee has a problem, the servant leader may help a follower so he or she can work successfully. For example, although a manager may penalize an employee for arriving late, a servant leader may ask the employee what he or she needs to arrive to work on time. After the leader and the employee successfully collaborate, the effect is that the manager is appeased and the employee keeps a job. A servant leader can help employees develop a supportive community

By increasing the starting wage of employees, and the amount of money they receive from their employers, the low wage working class citizen should be able to better pay off their bills and live out of poverty. “Alan B. Krueger, the minimum-wage expert who formerly headed Mr. Obama 's Council of Economic Advisers, has written: "A minimum wage set as high as $12 an hour will do more good than harm for low-wage workers, but a $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences”’ (“$15 Is the Wrong” A.14). This article shows us that increasing the starting pay does have its benefits, but also can have harmful effects on surrounding people. What are some of the problems that come with raising the pay of employees?

In America and countries around the world, we face a universal problem: poverty. Among many options, a widespread solution for this problem is the implementation of a minimum wage. Aside from the US, countries such as Luxembourg, Belgium, and Ireland all have set minimum wages(Petroff). Minimum wage was first established during the Great Depression when President John F.Kennedy was striving to help the economy and lift many Americans out of poverty(Day). At the time, the minimum wage was $0.25 an hour, which corresponds to about $3.98 an hour in today’s money(Minimum Wage). Since then, the minimum wage has steadily increased to today’s $7.25 an hour. With the fluctuating economy, people’s views and opinions on the subject have swayed every which way throughout the years, with minimum wages rising and falling over different cities, states and countries. The imminent truth is that people simply need more money, with around 60% of the population already in poverty (Dunkelberg). Often times, people are very liberal with this issue and suggest that America raise the minimum wage drastically to $15.00 an hour. The face of the proposition is a pretty one, suggesting that everyone gets more money, so how could one say no? While increasing the minimum wage has had some small benefits, especially from an employee’s perspective, the success of this idea proves to be a facade on the face of the future

A recent survey conducted by Mercer Consulting Firm found that salary is the reward component most profoundly appreciated by employees; however, just 55 percent are happy with what they earn. When employees believe, they are being paid short of what

“Paying your employees well is not only the right thing to do, but it makes for good business”-Jim Sinegal, CEO of Costco. Many of America’s employees are not being paid well, however, for the annual income of a full-time employee who works year-round is less than $16,000 (about $15, 080) according to the current federal minimum wage (Rebuilding). To put into retrospect how out-dated the federal minimum wage is, consider that the minimum wage of 1956 amounted to exactly $7.93 in 2009 (Henderson). How progressive is it that our nation’s workers being paid less today than workers from the 50’s? The federal minimum wage should be raised in order to assist families out of poverty, to ensure the effort and loyalty of workers, and

The option to do nothing would benefit Gravity Payments because the company would not incur a massive increase in wage expenses, making it a good option for profit maximization. Secondly, the lawsuit filed by Lucas Price, Dan’s older brother, would not happen, which would not only increase Dan’s happiness but also reduce bad press facing the company. Thirdly, Gravity Payments would retain its two most important employees who left directly because of the minimum wage decision as they believed that it was unfair to the more valuable workers. A disadvantage of this option is that Price’s moral concerns about socioeconomic inequality would be completely ignored. Another disadvantage is that Gravity Payments would miss out on the massive, positive, media coverage that resulted because of the wage increase, leaving its brand image the same as before. Lastly, both employee motivation and satisfaction would remain unchanged, and this is an issue because the lowest and average salary at the firm is $34,000 and $48,000 respectively, which

This report explores the issue of the pay that top executives make, and the reasons why they do. It also suggests improvements that can be made to make the system better. High Pay Seems Small When Compared To Company Profits Many companies pull in profits that are extremely high. When an employee of such a companies salary is compared to the amount of profit that the company earns, it starts to seem reasonable. It only makes sense that if the employee is directly responsible for the success of their company, then they deserve to get their payback. It seems ironic, but many salaries even look small once compared with a companies profits. Top Executives Are Under A Lot Of Pressure Being the CEO of a

The Leadership Theory presented in this document is Servant Leadership. The article summarised herein is “A systematic literature review of servant leadership theory in organizational contexts” published in the Journal of Business Ethics, pages 113(3), 377-393, written by D.L. Parris and J.W. Peachey in 2012 but published in the 2013 Journal.