Gravity Payments Owner Drastically Cuts $1M Salary and Sets $70,000 Minimum Wage for Staff ... Even the Clerk
In a jaw-dropping move Monday afternoon, Dan Price, the 30-year-old founder of Gravity Payments, a credit card processing company in Seattle, Washington, announced to his 120-person staff that over the next three years, every single employee — even the lowest paid clerk — will be paid a minimum annual salary of $70,000. And he wasn't joking.
"My jaw just dropped," Phillip Akhavan, 29, who earns $43,000 working on the company's merchant relations team, said in an interview with The New York Times. "This is going to make a difference to everyone around me."
The announcement stunned the staff and triggered a wave of clapping and whooping that surprised even Price, said the Times.
Get Our Latest News for FREE
"Is anyone else freaking out right now?" he asked, after the celebration had lapsed into a few moments of silence. "I'm kind of freaking out."
With the average salary at Gravity standing at $48,000, the new minimum wage is expected to increase the paychecks of about 70 employees and ultimately double the salaries of about 30 of them, according to company spokesman Ryan Pirkle.
The Christian Post reached out to Price at Gravity Payments for comment Tuesday but he was unavailable.
One of his staffers, a customer operations associate, identified as Kevin, told CP that his colleagues were still glowing from the announcement.
"I was there at the meeting. … Honestly, I could not believe what I heard, and I think that's what a lot of people felt. I kinda felt that we needed to get that repeated," he said.
And, when Price repeated the news, it finally sunk in.
"It was pretty clear, there was no confusion afterwards," said Kevin.
Price, who started his company in 2004 when he was just 19, explained that he got the idea after reading a study on happiness which shows that emotional well-being rises with incomes up to an amount of $75,000 annually.
"Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being," notes the article.
Beyond the article, Jamie June of Gravity Payments' marketing department, told CP that Price is just "an incredible" person.
"Dan is just an incredible man in general. He has a really amazing moral compass. And so that's not only with his employees but the customers," she said.
June said she wasn't aware of him being affiliated with any kind of religious institution, "but I cannot speak for him."
In discussing his decision with the Times, Price said the disparity between his market rate compensation and that of his workers is "absurd." The average chief executive earns nearly 300 times that of the average worker in America. And this disparity is one of the largest gaps in the world, and well higher than the 20-to-1 ratio gap recommended by Gilded Age magnates like J. Pierpont Morgan and the 20th century management visionary Peter Drucker, according to the Times.
"The market rate for me as a CEO compared to a regular person is ridiculous, it's absurd," Price, who drives a 12-year-old Audi, told the Times. He said his main extravagances are snowboarding and picking up the bar bill.
"As much as I'm a capitalist, there is nothing in the market that is making me do it," he said, referring to paying his staff the annual $70,000 minimum wage.
To pay for the increased staff wages, Price will cut his almost $1 million salary to $70,000 and combine that with about 75 to 80 percent of his company's $2.2 million expected in profits this year. Last year, according to the Idaho Statesman, the company was forecasted to complete $6 billion in transactions and end the year with about $15 million in revenue.
