Dan Price took a 90% pay cut to show his dedication to workers
Dan Price is setting the bar high for the modern CEO. After taking a 90% pay cut from his own salary years prior, the CEO of financial technology firm Gravity Payments this week announced all employees at the company’s newly opened Boise, Idaho office will receive a minimum salary of US$70,000.
Price broke the news on Twitter, adding that he is “grateful to work with this amazing team” and to be able to “compensate them for the value they bring” to their community.
This morning we cut the ribbon on the new @GravityPymts Boise office AND announced that all of our employees here will start earning our $70k min salary.— Dan Price (@DanPriceSeattle) September 23, 2019
I’m so grateful to work with this amazing team and to be able to compensate them for the value they bring to our community. pic.twitter.com/stwwJgYCqQ
In a separate tweet, the CEO recalled: “A lot of people said giving up a million dollar per year salary was an unreasonable sacrifice to pay a living wage. It was worth it.”
“I am proof of that. Any business making over a million in profit, any CEO making over a million should do it,” he said.
A lot of people said giving up a million dollar per year salary was an unreasonable sacrifice to pay a living wage.— Dan Price (@DanPriceSeattle) September 25, 2019
It was worth it.
I am proof of that. Any business making over a million in profit, any CEO making over a million should do it.
It’s time. pic.twitter.com/7v7YoDkF0g
His philosophy on raising pay began in 2015 after he learned boosting workers’ income up to $75,000 per year could significantly improve their emotional well-being. He believes investing in people helps accelerate growth in the organization.
READ MORE: How much is your human capital worth?
At the time, all 120 members of his staff in Seattle received a pay bump, with the minimum salary increasing to $70,000.
To accomplish this, however, Price had to slash his own pay from nearly $1m to $70,000. “The market rate for me as a CEO compared to a regular person is ridiculous, it’s absurd,” he said at the time.
Price has been hailed as one of the most generous employers in recent memory. His move comes at a time when CEO pay has grown by a staggering 940% from 1978, while workers’ pay has risen by only 12% within the same period, the Economic Policy Institute reports.