The CEO Who Took $1M Pay Cut To Raise His Staff’s Salaries Says Business Has Tripled
The CEO, who took a huge pay cut of $1 million, or €844,800 for all the Europeans out there, so that he would be able to pay more money to his workers, says the company has since tripled.
In 2015, for all of his 120 workers, the manager of a card payment company in Seattle instituted a $70,000 minimum wage – and personally took a $1m pay cut. He’s still on the minimum wage 5 years after doing that, and claims the gamble has paid off.
How Did He Decide To Do That?
In the Cascade Mountains just over Seattle, Dan Price, the CEO we’re talking about, was hiking with his friend Valerie, whom he used to date before. It is here that he had this uncomfortable revelation.
She told him that her life was in turmoil as they walked. Apparently, her landlord had increased her monthly rent by $200 and that she was struggling to pay her bills. Many of us have experienced this situation.
It made Price furious. Valerie had served in the military for 11 years, had visited Iraq for two tours, and now was forced to work 50 hours per week and two jobs simultaneously to be able to make ends meet.
At the age of 31, Dan Price was not experiencing these issues, but rather was on the other side of the problem. He was earning $1.1 million, or in euros that would be €928,500 per year from his company, Gravity Payments.
He figured out that he was part of the issue, and after having that enlightenment, Dan agreed to take action and, after looking through the numbers, found out that if they were to live comfortably in the city, each of his 120 staff members should be getting at least $70,000.
When I started a $70k minimum wage for my company in 2015, Rush Limbaugh said: “I hope this company is a case study in MBA programs on how socialism does not work, because it’s gonna fail”
Since then our company tripled & we’re a successful case study at Harvard Business School.
— Dan Price (@DanPriceSeattle) August 22, 2020
Price cut most of his salary to ensure a decent salary for everyone. He also got a mortgage for his two houses and gave up all his current stocks and savings.
Since he did that, the staff turnover in his company was cut by half and 76 % of his workers were more interested at work.
He also argued that more of his workers were now capable of getting homes and having kids.
Sources:
nzherald.co.nz
bbc.com