This CEO Decided to Cut His Own Paycheck to Double His Employees’ Pay

Dan Price, chief executive of a Seattle-based credit card company, told his employees Monday that he would cut his pay to help the company offer them substantial raises. The announcement did not only make his employees happy but it also brought new customers to the company.

Stefan Bennett, a manager at the credit card processing firm, told reporters that in a couple of days since the announcement was published in the media, the company gained new customers. Mr. Bennett explained that the company wanted to show people that you can run good business, pay people fairly, and it can still be profitable.

CEO Price astonished just about every of his more than 100 employees when he announced that he would cut his own $1 million paycheck to $70,000 to make sure that the company had the necessary funding to ensure that all its employees had the same salary within three years.

For some of the workers, this will mean that their pay will more than double. A fresh mom in her twenties said that she’ll buy a house.

Gravity Payments CEO’s decision defies the current trend in companies where top executives get huge paychecks while their employees struggle with their modest pay. As a result, Mr. Price’s gesture caught just about everybody’s attention.

However, David Larcker, a corporate management expert and professor at the Stanford University Graduate School of Business said that this public reaction didn’t necessarily mean that other CEOs would follow Mr. Price’s example.

Prof. Larcker praised CEO Price for having the courage to implement a different approach to such a tough problem. He also described the solution as “interesting,” “clever,” and “fun to think about.”

But Washington state already had the highest minimum wage in the country with its $9.47 per hour, while authorities announced that they planned on raising the current level to $15 per hour after a series of protests, strikes, and walk-outs.

On Tax Day, labor unions, low-wage workers, and worker rights advocates joined national protests for a $15 hourly wage. Drivers working for UBER and Lyft also protested in Seattle, while Seattle police took into custody 21 protesters that blocked an intersection after their march was over. Airport workers gathered at Seattle-Tacoma International Airport and requested better pay.

Gravity Payments’ chief executive started his business when he was 19 and a student at Seattle Pacific University. During the business’ early days, Mr. Price operated it from his dorm room. Later he expanded it, but he never forgot how he started it.

Yet, respecting its employees was one of the company’s oldest policies. Before Monday’s announcement, Gravity Payments employees were already able to take unlimited paid vacation after the first year.

Mr. Price told his employees Monday that that treatment was what everyone deserved.

On the other hand, he is fully aware that it won’t be easy to keep his promises. The recently announced pay hike will devour at least half of Gravity’s profits, and the young CEO has no plan to raise rates on clients.

“It’s up to us to find a way to make it work,”

CEO Price added.

Image Source: ABC News