CEO Took a 94% Pay Cut So His Employees Could Earn $70K, and Now His Company Is Thriving
CEO slashed his $1.1M salary so every employee could earn $70K. Critics laughed, but 5 years later, his company tripled revenue and proved them wrong.
In 2015, Dan Price, CEO of Gravity Payments, made a bold decision: he slashed his own salary from $1.1 million to invest in his employees. His radical shift aimed to ensure that every worker earned at least $70,000 annually. Critics branded his move as reckless, predicting the end of Gravity Payments. However, five years later, their predictions couldn’t have been more wrong.
The Numbers Speak
Since the pay overhaul, Gravity Payments has seen remarkable growth. The company tripled its revenue and doubled its customer base, with employee turnover dropping by 50%. Reports indicate that more than 70% of employees have paid off debts, purchased homes, or started saving and investing for the first time. Price’s actions have not only changed individual lives but have proven the power of compassionate leadership.
Valuation Impact
While specific valuation figures aren’t released, the company’s thriving status and tripled revenue highlight its significant growth trajectory since implementing the pay increase. Dan’s leadership approach has become a staple in business studies, recognized even by Harvard Business School as an exemplary case.
“We are human beings before we are employees; it’s our duty to look out for one another.”
– Dan Price
Investor Insights
- Compassion Pays: Companies investing in employee well-being often see enhanced productivity and loyalty.
- Reputation Management: Prioritizing fair wages can bolster a company’s reputation, attracting top talent and customers.
- Resilience to Crisis: Firms with strong employee morale tend to weather market downturns more effectively.
TL;DR (Too Long; Didn’t Read)
In 2015, Dan Price cut his $1.1M CEO salary to raise employee pay to $70K. Critics doubted him—5 years later, Gravity Payments tripled its revenue.
