Years Ago This CEO Cut Down His Own Pay By 90 Percent To Give To His Employees, It Paid Off
Tags: opinion
Being a hot-shot CEO does not have to mean that they exploit their workers to make their fortunes. They can also be kind people who genuinely consider their employees as family. About 6 years ago, Dan Price proved himself to be one such person. At the time, he was Gravity Payments CEO, a company that offered financial and credit card processing services.
Subscribe to our Youtube channel, new videos every week:
His story starts with a hike with an acquaintance. On the hike, Dan learned that living costs in Seattle are pretty expensive. His friend worked full-time and was a veteran of the Army, and even she was having a tough time paying her bills.
It Was A Conscience Call For The CEO
At the time, Dan was 31 years old and had an annual income of about $1.1Mn. He had founded Gravity Price when he was a teenager. After years of work, the company had 120 employees and 2000 customers across Seattle and Boise, Dan’s hometown. However, the talk with his friend made him realize the unfairness of the situation. He realized he had far too much while his own employees must have been struggling.
He even got to know about a first-hand experience from Rosita Barlow, one of his employees. Upon discovering a handbook for McDonald’s at her desk, Rosita tearfully confessed that she had to work at the fast-food chain on top of her full-time Gravity Price shift to pay her bills. Even then, on some nights, Rosita had to queue up at food banks.
This made Dan take a step that he was lauded across the world for. In 2015, Price took a 90% wage cut, mortgaged 2 of his houses, sold his stocks, and used all his savings to raise money. The money raised would ensure that all of his employees would get an annual wage of $70,000.
The critics were afraid that this would reduce productivity. However, his employees were happier than ever. They could follow their dreams like buying homes. Some like Rosita could give everything to their work at Gravity Price. Productivity, in fact, soared. So much so, that the annual amount processed by the company reached $10.2Bn from $3.8Bn.
No Good Deed Goes Unnoticed
However, when the pandemic arrived, Gravity Price faced the same problem as every other company. Dan was faced with a terrifying thought: that he would have to lay off some of his employees. For the record, no Gravity Price employee had to be laid off during the pandemic.
So, Dan did not take that decision. Instead, he informed all 200 employees about the situation. He left it to them to discuss and let him know if there are any better ways out.
The employees decided to repay their CEO in kind. Almost all of them voluntarily chose to have their wages cut from 5 to 100%. They echoed their CEO’s love for Gravity Price and wanted to keep it going strong.
Read: Netflix CEO And His Wife Donates $120 Million To Historically Black Colleges
The sacrifice was monumental, and fortunately, it worked as well. Gravity Price recovered from the economic crisis and restored pre-pandemic salaries as well. The company has also managed to repay the employees for their “loan” by giving all of them raises.
Dan is not at all boastful of his CEO capabilities. However, he has learned one valuable lesson: greater financial freedom means happier employees, and thus a more productive company. Now, his ardent wish is that other bigger companies take heed of this and raise their minimum wage. He said that the success of the company depends on the workers, much more than it does on the CEOs.
Feature Image: Twitter
Written by: Mayukh Saha
Hey! I am Mayukh. I help people and websites with content, videos, design, and social media management. I am an avid traveler and I started living as a digital nomad in Europe since 2019. I am currently working on www.noetbook.com - a creative media company. You can reach out to me anytime: justmayukh@gmail.
Leave Comment: