“Is anyone else freaking out right now? I’m kind of freaking out.”
Dan Price, the CEO of Gravity Payments, just told his staff of 120 that over the next three years, he will be raising the annual salaries for the company’s lowest paid clerks, salesmen and customer service reps to $70,000. For workers at a company where the average salary is $48,000, that increase is absolutely life-changing.
The young CEO is part of a growing wave of company owners and executives that are actually doing something about the wage disparity between executives and workers. One notorious example of the gap includes McDonald’s former CEO, Donald Thompson, who earned around $9.5 million a year when the average McDonald’s worker made less than $9.00 an hour — a much higher salary ratio than the 20-to-1 recommended by banking tycoon J.P. Morgan.
“The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd.”
Price plans to cut his own salary from nearly $1 million to $70,000 and will also use a majority of the company’s $2.2 million profit this year to raise his employees’ wages. According to spokesperson Ryan Pirkle, the move will greatly benefit about 70 employees, 30 of which will see their salaries doubled.
Price became passionate about helping his employees thrive on a realistic wage after hearing stories of how hard it was to survive on $40,000 a year.
“They were walking me through the math of making 40 grand a year […] I hear that every single week … That just eats at me inside.”
Seattle-based Gravity Payments, a credit card processing firm, was founded in 2004 in a dorm room by Price, then just 19 years old, along with his brother Lucas, who provided the seed funding. Price saw an opportunity to help smaller businesses process credit card transactions for a cheaper price while also providing better customer support.
A decade and one “Entrepreneur of 2014” award later, Gravity Payments now processes $6.5 billion in transactions for more than 12,000 businesses.
According to the New York Times, Price lives a modest lifestyle where his main extravagances include “snowboarding and picking up the bar bill.” He also drives a 12-year-old Audi that he got by bartering for service at a local dealer.
Do we need to say the obvious? Finally, a good-guy CEO who is doing the right thing.