You may have heard three months ago how Dan Price, the CEO of Gravity Payments, raised his staff’s minimum wage to $70,000 annually.
To help pay for the raise, he took a 90 percent cut to his own one million dollar salary.
It garnered the 31-year-old and his Seattle credit card processing company plenty of public attention. See a report on that below:
So why did he do it?
“Income inequality has been racing in the wrong direction,” Price said, according to The New York Times. “I want to fight for the idea that if someone is intelligent, hard-working, and does a good job, then they are entitled to live a middle-class lifestyle.”
I guess it’s also part of the mantra on Gravity’s careers page, which says:
Take care of your employees, and they’ll take care of your customers.
It’s pretty generous, and some would say more than a bit fool hardy. And going by the very top video and the NYT report online, it hasn’t been all roses for the young businessman.
It brought more attention to Price and his company than he thought it would. In the above video, he goes through letters that were sent to him about what he has done, many of which are very critical.
And according to the NYT report, two of his staff (out of 120) left as a result of the rise in pay across the board.
“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” said Maisey McMaster, who was a financial manager there before quitting.
Some staff didn’t like the fact that their salaries were now public knowledge.
But as you can see by the above video, Price remains positive about the negatives.
“My hope is that I’ll be right at the end of the day—but I actually don’t think the idea is so good to guarantee I’ll be right,” he says.
In the meantime, he’s rented out his house and is trying to make ends meet on a wage that was like what he made when he was in his early twenties.
“It helps that I’m 31, and don’t have any kids and no girlfriend, no girlfriend to tell me I’m crazy,” Prices says with good humor.
In the NYT article he said his wage increases were more in line with his Christian upbringing, as opposed to any socialist ideals like some critics are saying. As for business, it’s going well and on the up, but it will be 12 to 18 months before the pay structure will reap any rewards.
For a Fox interview with Price done three months ago, see below: