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CEO on why giving all employees minimum salary of $70,000 still "works" six years later: "Our turnover rate was cut in half"
Key Excerpts from Article on Website of CBS News
Posted: July 2nd, 2024
https://www.cbsnews.com/news/dan-price-gravity-payments-ceo-...
It was six years ago when CEO Dan Price raised the salary of everyone at his Seattle-based credit card processing company Gravity Payments to at least $70,000 a year. Price slashed his own salary by $1 million to be able to give his employees a pay raise. He was hailed a hero by some and met with predictions of bankruptcy from his critics. But that has not happened; instead, the company is thriving. He said his company has tripled and he is still paying his employees $70,000 a year. "I make $70,000 a year," Price [said]. According to the Economic Policy Institute, average CEO compensation is 320 times more than the salaries of their typical workers. Price said despite the success his company has had with the policy, he wishes other companies would follow suit. "I would say that's the failure of this. You know, I feel like I've been shouting from the rooftops like, 'This works, this works, everybody should do it!' and zero big companies are following suit because the system values having the highest return with the lowest risk and the lowest amount of work," Price said. Price thinks Gravity's returns are up in large part because bigger paychecks have lead to fiercely loyal employees. "Our turnover rate was cut in half, so when you have employees staying twice as long, their knowledge of how to help our customers skyrocketed over time and that's really what paid for the raise more so than my pay cut," said Price.
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