CEO who slashed his salary to give employees a raise shares more good news
It's not every day that the new boss flies in to give employees the stunning news that they're getting an instant raise to meet a $50,000 minimum salary, but Gravity Payments CEO Dan Price isn't a typical boss.
Price, who helms the Seattle-based payment processing company, famously slashed his $1 million salary in 2015 to give all employees a minimum $70,000 salary. His company recently acquired ChargeItPro, an Eagle, Idaho-based company, and moved those employees into a new office last month. That's when Price decided to fly to Idaho and surprise the team with some good news.
There was "general excitement and gratitude all around. I received a lot of high fives, hugs, and handshakes that day. It was a tremendous feeling," Price told TODAY.
Most employees at the company were making under $30,000, according to Price. As part of the deal, he committed to immediately raising the minimum salary to $50,000, offering many employees a significant pay bump. He'll also give employees a $5,000 raise each year, culminating in a minimum $70,000 annual salary by 2024.
Price said he was inspired to start the minimum income experiment after he read an article that detailed how more money can make a crucial difference in fostering happiness in the lives of people making less than $70,000.
Almost four years after he first announced the pay bumps, Price told TODAY he has been heartened to see what a difference it has made in the lives of his employees.
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"They've been able to pay down debt, buy their first homes, reduce their commute times, start families, and save for retirement at a higher rate," he said. "They've also been able to make healthier decisions like buying better-quality food or taking trips to rest and recharge. Several have reported being able to afford plane tickets to visit their friends and families in other parts of the country and world."
Beyond that, Price said they're no longer "burdened by the stress of having to live paycheck to paycheck and they don't have to sacrifice as much."
"When you live a reality where a flat tire could mean you can't afford to pay your student loan or you have to take a second job just to pay the bills, you're not going to be healthy — mentally or physically," he said. "We have a company culture that highly values autonomy, and the higher wage allows them more autonomy over their lives."
While Price said he still wishes other companies would follow suit and make big changes to address inequality, he's glad he did. The experience has also taught him a lot about himself, he added, and underscored that he made the right choice.
"I took a seven-figure pay cut in order to afford the initial increase, and my life has gotten richer for it," he said. "I feel a bigger sense of purpose and harmony in my life knowing that we as a team are proving that there's a better way to do business."