His salary was equivalent to about $70,000 today, which isn't too shabby (though hardly "overpaid"). Also, the article mentioned that there was a financial incentive for discovering ways to save money. Davey admitted that he was hoping to get some award from his discovery.
If the ticket is upheld, you pay: $12.50 (deposit) + $25.00 (ticket) = $37.50
You receive: $12.50 (refund) + $2.50 (10% of ticket) = $15.00
Net paid: $37.50 - $15.00 = $22.50
Savings = $2.50
Going from a 50% margin to a 2% margin is a sign of poor management...
50% is gross profit margin, while the 2% is net profit margin. To get from gross to net, you have to take into account rent, labor, taxes, depreciation, interest payments, insurance and lots of other expenses. Perhaps there is some poor management, but 2% net profit margin doesn't necessarily indicate this.