A rather controversial CEO named Dan Price did something a few years ago that rattled CEO’s around the world. Price is the CEO of Gravity Payments, a credit card processing company.
Seven years ago he decided to do something that could have ended his career, as well as his employees.
While Price was leading Gravity Payments seven years ago, he had an epiphany.
When we think of CEOs, we think of distant “suits” and meetings in boardrooms. For Price, that standard wasn’t going to cut it anymore.
In 2020, CEOs were found to be paid, on average, 351 times more than their typical worker.
Dan price wanted to change that.
Flying in the face of standard American business practice, Price lowered his own salary and redistributed the money to his employees.
Price went from a $1 million a year salary to a “measly” 70k.
When he announced the change, it made waves.
Making the announcement in a staff meeting, many people experiences an immediate doubling of their salary overnight. As you could imagine, the news was met with cheers from the employees.
Not everyone was as optimistic as Dan, however.
Economists and business gurus announced the grim future for Dan and his team.
They wrote pieces on how the company was destined to fail and the “pandering” Dan was doing was going to hurt people in the long run.
Well, that was all seven years ago. How is the company doing now?
Looking at the data, it’s clear to see that the naysayers were wrong.
Price, in an interview with CBS Mornings, explained some of the most recent numbers for his company.
So far, Gravity has nearly doubled the number of employees on site.
Additionally, they have tripled business and grown larger than they ever thought possible, all while paying a minimum of 70k a year to every employee.
Was it a risk?
Yes! It wasn’t a sure thing that such a radical salary plan was going to work.
For Dan though, it was important. He knew that it was getting harder and harder to live on the “standard” salary for starting employees and wanted to do something that was radical and kind.
Apart from the business metrics, there are a lot of personal metrics that show just how much of a difference the salary has made.
Dan thinks that business is booming because of how happy and healthy his employees now are.
His turnover rate was cut in half, meaning they are WAY more experienced, on average. Additionally, they have had 60 “company” babies in the past few years, as well as a massive uptick in employee homeownership.
It seems people have kids, buy homes, and work out when they are paid a livable salary!
Dan is happier than ever, even with his “reduced” salary. His employees are happy, and a happy employee makes a profitable and wonderful work environment. As Dan says:
“I’m way happier now than I ever was before. It feels good.”
Check out his incredible update in the video below!
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