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Here's what happened when a CEO slashed his own salary by 90 percent and gave it to his employees

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Here's what happened when a CEO slashed his own salary by 90 percent and gave it to his employees Empty Here's what happened when a CEO slashed his own salary by 90 percent and gave it to his employees

Post by Ben Reilly Sat May 01, 2021 8:42 pm

Criticism is part of the job when you're the head of a successful company, and Dan Price received plenty of it six years ago when he announced a radical shake-up at Gravity Payments.

It was in 2015 that Price, the credit card processing company's CEO, announced he would cut his own $1 million salary by 90 percent. Not only that, he also announced plans to bring the salaries of his 130 employees up to a minimum of $70,000 per year.

The move was surprising, and definitely wasn't par for the course in the world of business. A study from the Economic Policy Institute found CEOs in the United States typically make 320 times as much as their workers, and most receive lucrative salaries averaging $21.3 million a year as of 2019.

Today, it seems Price's decision has worked out for the best. On the sixth anniversary of his announcement, Price revealed on Twitter that Gravity's revenue has tripled since 2015.

"Six years later and our revenue has tripled. More importantly, our staff and company are thriving in various ways," Price tells PEOPLE. "[We have a] 10-time increase in new homes bought and babies born. Employees have increased savings and paid down debts."

https://people.com/human-interest/ceo-dan-price-says-companys-revenue-has-tripled-since-he-gave-employees-70000-minimum-salary/

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Post by eddie Sat May 01, 2021 8:54 pm

Top guy. Smart enough to realise that if you treat your employees well you’ll keep them hardworking, loyal and more importantly...happy.

Happy employees can only make your business boom.

Good for him.

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Post by Maddog Sat May 01, 2021 8:55 pm

It's almost like high wages allow for picking the best employees and creating a good company.

And calling this socialism is stupid. It's free enterprise at its finest.

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Post by Ben Reilly Sat May 01, 2021 9:12 pm

It's almost as though people have a false idea of what capitalism has to be, i.e. that employees must be paid shit wages and CEOs and other top management should make 300 times what their workers earn, and if a CEO decides not to buy into that mentality, he's a socialist -- doing what exaclty? Redistributing his own wealth?

I found it impressive that $900,000 per year was enough to lift 129 other people's wages to a minimum of $70,000 per year.

I'm sure this company isn't the only one doing stuff like this -- too bad that corporations are led by so many sociopaths, or there would be more compassionate companies.

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Post by Maddog Sat May 01, 2021 9:20 pm

Ben Reilly wrote:It's almost as though people have a false idea of what capitalism has to be, i.e. that employees must be paid shit wages and CEOs and other top management should make 300 times what their workers earn, and if a CEO decides not to buy into that mentality, he's a socialist -- doing what exaclty? Redistributing his own wealth?

I found it impressive that $900,000 per year was enough to lift 129 other people's wages to a minimum of $70,000 per year.

I'm sure this company isn't the only one doing stuff like this -- too bad that corporations are led by so many sociopaths, or there would be more compassionate companies.

I don't think his cuts paid for all the increases. Or there weren't that many employees not already making 70K, which could be true in Seattle. Wages are pretty high there based on the cost of living. Seattle is one of the most expensive places in the US.

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Post by eddie Sat May 01, 2021 9:21 pm

I think you’re slightly missing the point Maddog.

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Post by Maddog Sat May 01, 2021 9:38 pm

eddie wrote:I think you’re slightly missing the point Maddog.

Wouldn't be the first time.

900,000 ÷129 is about 7 grand per employee.

So most were probably already knocking on the door.

I'm not saying it's not great thing, just that it's a lot easier with a small, skilled workforce. Walmart can't do something like this. Too many employees.

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Post by Ben Reilly Sat May 01, 2021 9:45 pm

But let's play around with your 7 grand figure. For example, how much do you have to have/earn in order for $7,000 to be a significant amount of money?

I'd argue that you don't throw around 7 grand until you're making at least $300,000 per year, if not more. So that extra 7 grand meant more vacations, maybe a vehicle or home upgrade, etc. to most of his employees.

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Post by Maddog Sat May 01, 2021 10:00 pm

Ben Reilly wrote:But let's play around with your 7 grand figure. For example, how much do you have to have/earn in order for $7,000 to be a significant amount of money?

I'd argue that you don't throw around 7 grand until you're making at least $300,000 per year, if not more. So that extra 7 grand meant more vacations, maybe a vehicle or home upgrade, etc. to most of his employees.

Oh, it helped.

I'm just saying this company already paid most of its employees at or very near 70K

I think his salary cut was just for attention. Lots of CEOs have very small salaries and high earnings because their compensation packages are structured that way.

When my middle daughter graduated college she worked for Sewell. She started out close to 70 and was making that after a year.

Not unusual for a small company that only hires college graduates or skilled mechanics.

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Post by Ben Reilly Sat May 01, 2021 10:50 pm

It's sad that nobody can do anything good anymore, because every time someone does something good, they're only looking for attention and people to call them heroes -- "virtue signalling."

Making virtue signalling into a bad thing is an excellent way to make doing bad things seem more honest and genuine than doing good things.

Works out well for the baddies! But of course, I'm worse than the baddies, because I only said all of this to make people think I'm a good person.

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Post by Maddog Sat May 01, 2021 11:02 pm

Ben Reilly wrote:It's sad that nobody can do anything good anymore, because every time someone does something good, they're only looking for attention and people to call them heroes -- "virtue signalling."

Making virtue signalling into a bad thing is an excellent way to make doing bad things seem more honest and genuine than doing good things.

Works out well for the baddies! But of course, I'm worse than the baddies, because I only said all of this to make people think I'm a good person.

People can do good things.

But he went public with this and wanted some scrutiny.


If it all works in the end for him and his employees it's great.

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Post by eddie Sat May 01, 2021 11:05 pm

Maddog wrote:
Ben Reilly wrote:It's sad that nobody can do anything good anymore, because every time someone does something good, they're only looking for attention and people to call them heroes -- "virtue signalling."

Making virtue signalling into a bad thing is an excellent way to make doing bad things seem more honest and genuine than doing good things.

Works out well for the baddies! But of course, I'm worse than the baddies, because I only said all of this to make people think I'm a good person.

People can do good things.  

But he went public with this and wanted some scrutiny.


If it all works in the end for him and his employees it's great.  

Well it has worked for him and his employees. Read the story dude.

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Post by Maddog Sat May 01, 2021 11:07 pm

eddie wrote:
Maddog wrote:

People can do good things.  

But he went public with this and wanted some scrutiny.


If it all works in the end for him and his employees it's great.  

Well it has worked for him and his employees. Read the story dude.

So it's great.

We all agree it's great.

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pa·ter·nal·ism

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