In January, the Security and Exchange Commission revealed that the CEO of Starbucks received a 24 percent boost in his 2014 compensation package even though his base salary stayed steady at $1.5 million (poor thing, hard to get by on $125,000 a month) because the value of his stock awards increased to nearly $6.3 million and his performance cash payment increased 30 percent to $2.9 million. And the perks increased from $215,923 to $502,076.
Contrast that with another CEO. Dan Price, the CEO of Gravity Payments, read a study showing that the amount a person is happiest to live on is $70,000. So he reduced his salary from $1.5 million to $70,000 and increased the pay of his employees – all of them – to $70,000. This is an experiment, and maybe it won’t work, but neither does paying a person millions while his employees are struggling.
Also in the news is David Brooks’ new book, “Character.” (Interesting that William Bennett wrote “The Book of Virtues,” even while he had a secret gambling addiction. We assume Brooks has no such hidden character flaw.) So what are character and virtue? Amassing wealth while depriving others?
Slavery is of course the best example because the slaves could not accumulate wealth from the sweat of their brow nor could they pass anything on to their children. But today we have CEOs that accumulate wealth for themselves and future generations of their family. The CEO of Gravity Points saw that $70,000 was enough for him and his family to live on and put away enough for their security – the point of accumulated wealth – and that paying his employees the same would allow them that security and ability to accumulate wealth.
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Also flowing from Dan Price’s decision, is that we the taxpayers will not have to support his workers with food stamps, housing, child care. I am helping a family living on the edge who do have food stamps and other help. But sometimes even that is not enough and when they run out, they have to go to the IFC kitchen to get through the month. When the WIC payments for the baby don’t cover the month, they look to friends and family, many of whom are in the same boat. If every employer paid a living wage, or lowered their pay to increase their employees’, wouldn’t it serve the common good?
During the Occupy movement, during a talk at N.C. State, the CEO of Wells Fargo was interrupted by students protesting the bank’s role in foreclosures while his bank profited. Afterward, I wrote him to recommend he listen to those students’ message. I pointed out that students have always led the major social changes in our country: African American civil rights, women’s rights, divestment that led to the defeat of apartheid, environmental protection. And they were right this time. I suggested he could be a leader and reduce his pay so that others might follow and we could address the income inequality issue that Occupy was raising. I received a polite letter from the Wells Fargo PR department thanking me. I wrote several other CEOs and came to the conclusion they all had good PR departments.
So now Dan Price is leading the way and challenging those fat cats. How about it Starbucks? And Wells Fargo? You really can live on less than $125,000 a month. Millions do.
Ellie Kinnard is a former state senator and Carrboro mayor. She can be reached at firstname.lastname@example.org