It's good business when a CEO makes sacrifices alongside his employees. I think taking no salary is not necessary, but it is certainly noteworthy when someone does it voluntarily.
Rob Katz
Heroic act: Cut his own salary to $0
Position: CEO, Vail Resorts
Hometown: Vail, Colo.
Things are still sunny at Vail Resorts, which operates five ski and snowboard slopes in Colorado and Lake Tahoe, Nev. The company's revenues rose in the second quarter, boosted by real estate sales. But CEO Rob Katz expects the situation to head downhill.
To prevent layoffs, he decided to take the biggest cut himself. Unlike the AIG executives taking big bonuses and salaries, Katz cut his $840,000 a year salary down to $0 for 2009, and he will take a 15% cut when it is reinstated.
Seasonal employees were asked to a 2.5% pay cut, and executives agreed to a 10% reduction. The company's board of directors has agreed to reduce their annual cash retainer by 20%. Total saved: More than $10 million annually.
"If I was going to ask someone making $8 an hour to take a pay cut, they needed to know I was doing something that would really affect me," Katz says. "No one wants to see their salary reduced, but at least in this case those at the top are making the biggest sacrifice."
In order to adjust to a $0 salary this year, Katz said he will cut back on expenses like travel and food.
"I'm making changes, but you can't compare the challenges I go through to some of our folks," he explains. "I've saved money because I've made more over my time. They need to find a way to put food on the table."
"People here would rather take a pay cut than see their colleague lose their job," he adds. "Everyone at the company is a hero." -- J.P.
We need more socialism in this world. If we'd had governments that would embrace socialist ideologies then the subprime mortgage market wouldn't have fucked up so royally.
Yeah, that's exactly what we need. Bigger government so poor people can just be lazy and do nothing while rich white men do all the REAL work. You probably voted for Obama.
It sure is easy to speak about socialism when one does not live in a country where people have to suffer the consequences of applying (or attempting to apply) said ideology.
I don't trust anybody who doesn't work for his living.
But a CEO taking a 100% pay cut is totally fine and in line with capitalism. He's in charge of the company and can do what he wants to save it. What that man is doing IS capitalism. Capitalism isn't about dollars and cents, people. It's not about getting the most money as soon as possible. It's about freedom of contract and mixing your toil with the earth. It's about a fair (and agreed upon) exchange of goods, services, and moneys. He is exchanging his entire pay this year for a future where (he hopes) his company will survive. That's more important to him! He is exchanging one thing for another! Go Rob Katz, go!
This guy is good business. He's doing it because he wants his company to survive, and he is thinking on a long term scale. Not getting paid will suck, but it's his company, and having his company go under will suck way more.
This way his employees stay motivated, because they think "wow, my CEO actually cares about us, because he doesn't say one thing and do another! I'm going to work hard because I respect him."
This is GOOD business. I really hope to see more of this.
An unusual disguise has helped a Bangkok fireman rescue an eight-year-old boy who had climbed on to a third-floor window ledge, Thai police say.
The firefighter dressed up as the comic book superhero Spider-Man in order to coax the boy, who is autistic, from his dangerous perch.
Police said teachers had alerted the fire station after the boy began crying and climbed out of a classroom window.
It was reportedly his first day at the special needs school.
Efforts by the teachers to persuade the pupil to come back inside had failed.
But a remark by his mother about his passion for comic superheroes prompted fireman Somchai Yoosabai to rush back to the station, where he kept a Spider-Man costume in his locker.
The sight of Mr Somchai dressed as Spider-Man and holding a glass of juice for him, brought a big smile to the boy's face, and he promptly threw himself into the arms of his "superhero", police said.
Mr Somchai normally uses the costume to liven up fire drills in schools.
I don't quite know what was being said there, kukopanki... can you elaborate?
And just so everyone knows, I was totally kidding... we could use a good dose of socialism here (I think, anyway).
I live in a country with pretty heavy socialist policies (even if the current government would like people to think otherwise) and the result has been, IMO, the general poverty and lousy public services that exist. Examples:
We have one of the most rigid and strict labor laws in the world, which results in people hiring the LEAST possible workers because of how ridiculously expensive each employee is on the long run. Result? Unemployment.
Every worker must obligatorily give around 11% of his salary to Social Security. Result? Social Security is a fat, useless institution that gives incredibly BAD medical and social services because, hey, even if they suck they get their money. If people could choose to give or not give to social security, or between a public and private insurance companies, the services would be a hell of a lot better.
The list goes on, but that's all I feel like typing out right now. The bottom line is that while socialism sounds like a very good idea, it more often than not leads to inefficient institutions and other bad situations.
Okay, so what we can take from this is that extreme socialism is probably not the best idea.
But, we also know from our situation that extreme capitalism is probably not the best idea since those with power will try to get more and keep it from everyone else.
So, amazingly, shouldn't we seek the right balance of middle ground?
Of course, the right balance is probably variable depending on the circumstances of the time.
My point here, and really my point in first mentioning socialism, is retaliation against many people I know screaming about how Obama is going to cause Armageddon by instituting a bit more socialism than previously existed. Really, the word 'socialism' here carries such a ridiculously negative connotation that it's comparable to devil worship. I'm fighting against just such a mindset.
Capitalism is not those in power keeping everything for themselves. That's an old boy's club. That's political corruption. That's big government. Capitalism is each man naming his own price. It's PERSONAL RESPONSIBILITY. It means DEATH TO THE LAZY.
Our current financial situation was not brought about by capitalism. If we were living in a pure capitalist society, we would not have an organization that can print money at will: an inflation tax, since it decreases my purchasing power while increasing the purchasing power of whoever gets the money. Our current financial situation was caused by government interference in an otherwise free market. Subsidies to oil companies? Minimum wage? What does a minimum wage do other than cause the price of bread and milk to increase. It's a short-term solution that only gets stupid politicians more votes.
For the first 19 years of my life, I was given everything for free. I didn't apply myself. I didn't try. At the same time, though, I felt worthless.
Now I'm on my own. I live or die by my skill and work ethic. That's the way I want it. Who wants to be useless? If I'm down on my luck, I hope my friends and family will be able to help me. If I'm a lost cause, I hope they cut me loose.
I think that that version of capitalism is, in some ways, just as idealistic as visions of pure socialism.
"Capitalism is each man naming his own price". Yes, this is true. But this can only be a good thing as long as each person has the ability to competitively produce goods or services in the marketplace. Saying this is universally a good thing assumes that everyone is going to play fair and let everyone do whatever it is they want to do. It fails to take into account human greed.
Pure capitalism creates "old boys' clubs" just as much as anything else, since the people who are in power will continue to try to gain power, because that's what you're supposed to do in capitalism. So what happens when one person holds control of the entire means of production or natural resource? Does that person just "play fair" and keep prices at a competitive but reasonable level? History teaches us otherwise.
As it happens, an old boys' club forms... and it becomes not death to the lazy, but death to anyone else who doesn't fit in with what the ruling elite consider to be their own kind. There's a reason that when the big companies lined up for a bailout from Congress, pretty much every single one was an older, white male.
I don't claim that capitalism is all bad. Yes, it helps to promote competition and can often reward people for hard work.
But, I really don't agree with the rosy portrait you've painted of it. It isn't as simple as "If you work hard enough, you'll make it to the top, and if you don't succeed under our system, it's obviously your fault for being lazy."
Even though we claim that everyone is equal in our country, that isn't the case. Not everyone has an equal opportunity, and low status isn't just something that comes to you because of your own actions. It's inherited along family lines, whether it's because of socioeconomic status, race, gender, whatever.
I guess what it all boils down to is that, yes, pure capitalism, in its pure theoretical state, works like that. But just like socialism, it will inevitably be tainted by actually being put into practice.
True enough, there are some (few) cases in which the State must intervene. But in general, given two choices the one that benefits free-market the most tends to be the correct one. From my point of view, you have these two systems, one of which "takes into account human greed" (socialism) and tackles the issue by oppressing the citizen, which doesn't work because people always find ways around the law, while the other does indeed take into account human greed, and works with it, using human nature and human action as the bases on which the system is supposed to work (free market, competition, etc.).
"Old boys' clubs" will always exist under every system, because sadly nothing is perfect. With socialism "old boys' clubs" enjoy State sponsorship and are therefore almost, if not completely, impossible to compete with. Under liberalism (I don't know why but here liberalism stands for economic freedoms, and not necessarily always freedom on social issues as it is in the US) these old boys' clubs exist, sure, but there is always an option however minimum it may be to compete.
It seems that from a completely black and white overview, the people totally against socialism are assuming that all people living in poverty are there for a reason, and deserve to be there and shouldn't have any of the hard-earned money given to them out of sympathy or any other such reason. On the other hand, it seems that the people for socialism are assuming that the people on top are all corrupt businessmen who just take whatever money they can get, through honest ways and (most importantly) dishonest ways, stealing from those below them.
I know no one here may actually think this exact thing to such extremes, but I just want to point out, neither are these are totally true; the poorest of the poor are not all losers who put themselves there in the first place, and not all the richest of the rich got that way by stabbing everyone's back on their way up to the top. Therefore, its hard to say that socialism is good or bad. It has its good bits, but in my opinion.. I have a bigger problem with taxing the people who make more money to let the poorer people have money, than I have a problem with letting the poor people suffer. It's a hard world out there, I really do feel horrible for people living in poverty, but I don't think lowering the difference between the two extremes is the best solution.
I wish we could just figure out the people who are never going to amount to anything and just take things from society, and then just take them out of the whole freakin gene pool. If they're not going to do anything productive for anything and end up just abusing whatever anyone gives them.. those are the people who deserve to be forgotten. *sigh* I know this would never be attainable, I just hate hearing about ANYONE who abuses whats given to them.
I agree with the first part of what Mish said. Socialism is evil because poor people are lazy vs. Capitalism is evil because rich people are corrupt.
I've been below the poverty line for almost my entire life. I come from a family of high intelligence. This is inexplicable to many people. My father, for example, has pretty much disowned me. "Cut me loose" as Mr. Filleau put it.
We're surviving on my student loans and the goodwill of my husband's family, along with food stamps, partly because my husband is slowly going crazy, with physical symptoms to go with his mental problems, and is unable to hold a job. Since I have not yet graduated college, the only jobs I can get around here are fast food and telemarketing. I've looked. Neither will support my family.
There is obviously much more to my story. There always is. One of the problems of speaking in the abstract, speaking about large groups, is that you cannot focus on anecdotes, but then the individuals are lost. Someone always, always falls through the cracks.
I'm gonna go with middle ground. I believe in rewarding hard work and good ethics. I also think we, as a society, should take care of our sick, poor, crazy, widows, orphans, and the others living on the fringes. I can't find it conscionable to let members of the group starve when the group as a whole is by far the richest in the world. That said, I know that our homeless are, generally speaking, better off than many citizens of third world countries.
Comments
Heroes of the Economy
But... I think I smell something on this CEO...
Could it be... SOCIALISM?!?!?!?!?!?!?!
We need more socialism in this world. If we'd had governments that would embrace socialist ideologies then the subprime mortgage market wouldn't have fucked up so royally.
And just so everyone knows, I was totally kidding... we could use a good dose of socialism here (I think, anyway).
Not really. I really liked the ideology in the books, but.. I dunno. I think anything taken to extreme measures is a bad idea.
But a CEO taking a 100% pay cut is totally fine and in line with capitalism. He's in charge of the company and can do what he wants to save it. What that man is doing IS capitalism. Capitalism isn't about dollars and cents, people. It's not about getting the most money as soon as possible. It's about freedom of contract and mixing your toil with the earth. It's about a fair (and agreed upon) exchange of goods, services, and moneys. He is exchanging his entire pay this year for a future where (he hopes) his company will survive. That's more important to him! He is exchanging one thing for another! Go Rob Katz, go!
This guy is good business. He's doing it because he wants his company to survive, and he is thinking on a long term scale. Not getting paid will suck, but it's his company, and having his company go under will suck way more.
This way his employees stay motivated, because they think "wow, my CEO actually cares about us, because he doesn't say one thing and do another! I'm going to work hard because I respect him."
This is GOOD business. I really hope to see more of this.
Thai Spider-Man to the rescue
I live in a country with pretty heavy socialist policies (even if the current government would like people to think otherwise) and the result has been, IMO, the general poverty and lousy public services that exist. Examples:
We have one of the most rigid and strict labor laws in the world, which results in people hiring the LEAST possible workers because of how ridiculously expensive each employee is on the long run. Result? Unemployment.
Every worker must obligatorily give around 11% of his salary to Social Security. Result? Social Security is a fat, useless institution that gives incredibly BAD medical and social services because, hey, even if they suck they get their money. If people could choose to give or not give to social security, or between a public and private insurance companies, the services would be a hell of a lot better.
The list goes on, but that's all I feel like typing out right now. The bottom line is that while socialism sounds like a very good idea, it more often than not leads to inefficient institutions and other bad situations.
The second bottom line is BETTER DEAD THAN RED.
But, we also know from our situation that extreme capitalism is probably not the best idea since those with power will try to get more and keep it from everyone else.
So, amazingly, shouldn't we seek the right balance of middle ground?
Of course, the right balance is probably variable depending on the circumstances of the time.
My point here, and really my point in first mentioning socialism, is retaliation against many people I know screaming about how Obama is going to cause Armageddon by instituting a bit more socialism than previously existed. Really, the word 'socialism' here carries such a ridiculously negative connotation that it's comparable to devil worship. I'm fighting against just such a mindset.
Our current financial situation was not brought about by capitalism. If we were living in a pure capitalist society, we would not have an organization that can print money at will: an inflation tax, since it decreases my purchasing power while increasing the purchasing power of whoever gets the money. Our current financial situation was caused by government interference in an otherwise free market. Subsidies to oil companies? Minimum wage? What does a minimum wage do other than cause the price of bread and milk to increase. It's a short-term solution that only gets stupid politicians more votes.
For the first 19 years of my life, I was given everything for free. I didn't apply myself. I didn't try. At the same time, though, I felt worthless.
Now I'm on my own. I live or die by my skill and work ethic. That's the way I want it. Who wants to be useless? If I'm down on my luck, I hope my friends and family will be able to help me. If I'm a lost cause, I hope they cut me loose.
"Capitalism is each man naming his own price". Yes, this is true. But this can only be a good thing as long as each person has the ability to competitively produce goods or services in the marketplace. Saying this is universally a good thing assumes that everyone is going to play fair and let everyone do whatever it is they want to do. It fails to take into account human greed.
Pure capitalism creates "old boys' clubs" just as much as anything else, since the people who are in power will continue to try to gain power, because that's what you're supposed to do in capitalism. So what happens when one person holds control of the entire means of production or natural resource? Does that person just "play fair" and keep prices at a competitive but reasonable level? History teaches us otherwise.
As it happens, an old boys' club forms... and it becomes not death to the lazy, but death to anyone else who doesn't fit in with what the ruling elite consider to be their own kind. There's a reason that when the big companies lined up for a bailout from Congress, pretty much every single one was an older, white male.
I don't claim that capitalism is all bad. Yes, it helps to promote competition and can often reward people for hard work.
But, I really don't agree with the rosy portrait you've painted of it. It isn't as simple as "If you work hard enough, you'll make it to the top, and if you don't succeed under our system, it's obviously your fault for being lazy."
Even though we claim that everyone is equal in our country, that isn't the case. Not everyone has an equal opportunity, and low status isn't just something that comes to you because of your own actions. It's inherited along family lines, whether it's because of socioeconomic status, race, gender, whatever.
I guess what it all boils down to is that, yes, pure capitalism, in its pure theoretical state, works like that. But just like socialism, it will inevitably be tainted by actually being put into practice.
I'm going to make my infant son earn his motherfucking food clothing and medicine
"Old boys' clubs" will always exist under every system, because sadly nothing is perfect. With socialism "old boys' clubs" enjoy State sponsorship and are therefore almost, if not completely, impossible to compete with. Under liberalism (I don't know why but here liberalism stands for economic freedoms, and not necessarily always freedom on social issues as it is in the US) these old boys' clubs exist, sure, but there is always an option however minimum it may be to compete.
It seems that from a completely black and white overview, the people totally against socialism are assuming that all people living in poverty are there for a reason, and deserve to be there and shouldn't have any of the hard-earned money given to them out of sympathy or any other such reason. On the other hand, it seems that the people for socialism are assuming that the people on top are all corrupt businessmen who just take whatever money they can get, through honest ways and (most importantly) dishonest ways, stealing from those below them.
I know no one here may actually think this exact thing to such extremes, but I just want to point out, neither are these are totally true; the poorest of the poor are not all losers who put themselves there in the first place, and not all the richest of the rich got that way by stabbing everyone's back on their way up to the top. Therefore, its hard to say that socialism is good or bad. It has its good bits, but in my opinion.. I have a bigger problem with taxing the people who make more money to let the poorer people have money, than I have a problem with letting the poor people suffer. It's a hard world out there, I really do feel horrible for people living in poverty, but I don't think lowering the difference between the two extremes is the best solution.
I wish we could just figure out the people who are never going to amount to anything and just take things from society, and then just take them out of the whole freakin gene pool. If they're not going to do anything productive for anything and end up just abusing whatever anyone gives them.. those are the people who deserve to be forgotten. *sigh* I know this would never be attainable, I just hate hearing about ANYONE who abuses whats given to them.
I've been below the poverty line for almost my entire life. I come from a family of high intelligence. This is inexplicable to many people. My father, for example, has pretty much disowned me. "Cut me loose" as Mr. Filleau put it.
We're surviving on my student loans and the goodwill of my husband's family, along with food stamps, partly because my husband is slowly going crazy, with physical symptoms to go with his mental problems, and is unable to hold a job. Since I have not yet graduated college, the only jobs I can get around here are fast food and telemarketing. I've looked. Neither will support my family.
There is obviously much more to my story. There always is. One of the problems of speaking in the abstract, speaking about large groups, is that you cannot focus on anecdotes, but then the individuals are lost. Someone always, always falls through the cracks.
I'm gonna go with middle ground. I believe in rewarding hard work and good ethics. I also think we, as a society, should take care of our sick, poor, crazy, widows, orphans, and the others living on the fringes. I can't find it conscionable to let members of the group starve when the group as a whole is by far the richest in the world. That said, I know that our homeless are, generally speaking, better off than many citizens of third world countries.
Middle ground. Extremes are not good.