How one company levels the pay slope of executives and workers

As executive pay soars way above what the middle-class earn by over 100 times, Leonard Lee, the founder of Lee Valley Tools, has ensured that his highest paid workers never make more than 10 times the pay of the lowest paid worker. Last year, the ratio of pay in Canada’s largest companies was 122-to-one, up from 84-to-one a decade earlier. Lee notes that along with his form of pay distribution and distributing a quarter of pre-tax profits to its staff, “you get tremendous loyalty from employees if they enjoy their work and they are participating in the income and they have the authority that they need to execute their job.” His flatter pay structure has been noted to pay off in better worker retention and a more engaged staff. However, although this pay structure may seem back the true Canadian value of equal opportunity of all, I believe that it is not a realistic approach for many large corporations who need to meet quarterly targets. This pay structure is much easier for family run businesses who don’t have shareholders and analysts pressuring the company to keep labour costs down.

China becomes world's top gold buyer

With one of the largest and fastest growing economies in the world, it comes to no surprise that China and India are the world’s top gold consumers. Purchasing over 798 tonnes of gold so far this year, the World Gold Council estimates that China will top 1,000 tonnes by the end of this year alone. Although growth may seem to be slowing after decades of rapid expansion, the Chinese middle class have yet to curb their spending habits. Making up a large chunk of the country’s 1.5 billion people, the Chinese’s driving demand for higher carat and heavier pieces of gold jewellery ranks it as one of the top investments in the country, alongside stocks and real estate. Often seen as a sort of safe haven when the economy is tumbling, gold holds no allegiance to any particular country and is often seen as a universally accepted currency. Although many criticize gold as dead money and is seen as a way of putting your money into money, I believe that hedging your wealth or even just speculating the price the rise based on certain events and demands is a poor way to invest an individual’s money.

Saudi billionaire sees a world awash in oil

After the recent discovery of shale oil in the United States, many are criticizing the Saudi elite for ignoring the economic threat posed by the Americans. One of the most influential critics however, comes from Prince al-Waleed bin Talal, a Saudi billionaire who invests in everything from Disney to Twitter to 5-star hotels. The Prince warns that the American shale discovery would soon threaten, not only the Saudi economy, but also that of the members from the OPEC. Although Saudi Arabia has already shrunk its oil production by nearly 700,000 barrels a day, the Prince still feels that the leaders are not progressing fast enough to diversify their oil based economy. He believes that in less than two years, the United States will become a leading competitor in crude oil with prices falling below $80 a barrel if more discoveries emerge within the United States. With about 92% of the Saudi Arabia’s annual budget coming from oil, many share his concern as political figures continue to push for the expansion of oil output. With an enormous stockpile of foreign reserves, I feel that this is giving the leaders a false sense of security as prices will continue to drop as global supply increases.

Rejecting Billions, Snapchat Expects a Better Offer

For many aspiring entrepreneurs, the biggest dream is to launch a start-up and walk away with a ton of cash. However, for two former fraternity brothers at Stanford, that was not the case. Working out of a beachfront bungalow in California, the two brothers created a social media service called Snapchat which lets users send photo and video messages that disappear after a certain time. Quickly gaining a reputation as a way to send provocative photos, it has also become a fun and easy way to trade photos and is one of the most sought-after business in Silicon Valley. William Liaw’s blogpost questions the promotion of “sexting” but defends it in that people are “underestimating its simplicity and committing the straw-man fallacy.” As a company that generates zero revenue, the two aspiring entrepreneurs have recently turned down a $3 billion buyout by Facebook. Expecting much more in the future, the two brothers believe that they may be one of the first social media companies to generate revenue beyond advertising. Although much is still uncertain, I feel that Snapchat made the right decision to hold off on the buyout. Much of the market for generating revenue outside of advertising in the United States have still been relatively untouched and there could be tremendous growth for their company if they play their cards right.

Twitter shares soar in frenzied NYSE debut

The recent launch of Twitter’s IPO have skyrocketed by 73% after a frenzied debut that drove the value of the company up to $25 billion. Closing the first day at $44.90 a share, shares were traded at about 22 times the forecasted sales of 2014, double the multiple of fellow social giants Facebook and LinkedIn. Shadowed for months after Facebook’s disastrous launch in 2012 which was plagued by trading glitches, Twitter’s launch seemed to go off without a hitch and interestingly, market research by analyst PrivCo have showed that Twitter’s IPO have created 1,600 new millionaires! Although far from turning a profit, with a projected loss of $70 million in its most recent quarter, Twitter’s widespread attraction of celebrities and presidents gives them a significant advantage over other social media giants, boasting a star-studded cast and spawning one of the most prominent symbols of this generation, the hashtag! However, like many who criticize the price of the IPO, I too believe that Twitter potentially left billions of dollars on the table. Being overly cautious and not wanting to end up with a disaster like Facebook, I believe Twitter could have priced the shares higher than their IPO.