By Rachel Puryear
Six years ago, Dan Price, the CEO of Gravity Payments; made a bold and unusual move in the business world – he cut his own salary, in order to enable the company to pay all of his employees at least $70,000.00 per year! The now-37-year-old leader of this credit card processing company based in Seattle, WA slashed his own million-dollar salary to his new minimum wage – $70K per year – so that everyone working at his company could have a better life, with much less financial stress.
When the news of this wildly generous move came down, the world was of course divided in its response. Many praised the move as refreshingly unselfish and a model that other company leaders should consider; while others in the corporate world sneered, and insisted the company would soon go bankrupt (they didn’t want to look bad themselves, of course).
So, how has this generous move stood the test of time?
Actually, quite fabulously. The company thrived following this move.
Since then, according to Price; the company has nearly doubled its staff, and employee turnover cut in half. Employees are incredibly loyal to their employer, too – when the pandemic hit the company hard, employees willingly took pay cuts for awhile to help keep it afloat (Price also further cut his own pay then, and the company paid employees the difference again after it recovered). The company also received hundreds of new resumes after announcing the company-wide pay increase.
That’s quite a contrast to the state that many companies find themselves in after nearly two years of pandemic; where resignations (especially for low-paid workers with inflexible working conditions) are at an all-time high, and employee loyalty lies somewhere between poor and non-existent.
Price’s inspiration for making this move was reading a Princeton study, which showed that people’s life satisfaction increases along with their income, up to about $75,000.00 per year – at which point the benefit levels off. (Note: The study was from 2010. In 2021, the equivalent value of that figure is now $90,464.00, according to DollarTimes.) Price also said that his own life satisfaction increased, even with a huge pay cut – perhaps it’s less lonely at the top when one spreads the wealth.
Thank you, dear readers, for reading, following, and sharing. Here’s to companies and leaders who truly value their workers, and show it in how they treat and compensate them.
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