Dan Price took a 90% pay cut to improve his employees' well-being.
Last week Dan Price, CEO of credit card processing company Gravity Payments in Seattle, impressed his employees and all those who read about his new salary policy.
On opening new offices in Boise, Price announced on Twitter that all of the employees would be earning a minimum of $70,000 by 2024 — a policy Price had already set in motion in his Seattle offices in 2015. His reasoning came from a study he read that demonstrated a correlation between an employee’s improved well-being with an income level that hits $75,000 — something most people could appreciate.
So three years ago he cut his own wages of $1 million by 90%, and took $2 million from the firm’s profits to be able to increase his employees’ salaries so that they would eventually hit the $70,000 mark by 2018. Some members of staff found their wages doubled, as reported by Kake.com.
Price, who is the majority shareholder of the company, felt the decision was a “moral imperative,” believing there shouldn’t be such a sizable gap in pay between the CEO and their staff, as reported in CNN by Chris Isidore. The results were so impressive Price decided to implement the same policy for his new employees at Gravity’s latest offices.
Price explains on his company website that creating income equality has had some seriously impressive results among his employees: “The number of babies born to employees has increased from 0-1 per year to roughly 6-7 per year. More than 10% of employees have purchased a house for the first time. Personal individual 401k contributions have more than doubled, and more than 70% of employees with debt have been able to pay some of it down.”
The security his staff have in knowing they can put food on the table and gas in the car reduces stress levels at home and at work, and allows for a happier workforce that feels valued. This is something that echos with the Church’s own fight for social justice and a decent living wage. In 1891, Pope Leo XIII said a working man’s salary should be able to cover the costs of raising a family.
Since then, other popes and bishops have highlighted the need for a just wage. Now that Price’s salary policy is turning heads, maybe other companies will follow his example and give workers incomes that allow them to lead a less stressful, family-affirming lifestyle.