Life
CEO took a $1M pay cut to make sure all his employees had a minimum $70K salary
And? His company is thriving.
Cherie Gozon
09.24.21

Working a 9-to-5 job is no easy feat.

Pexels|Ono Kosuki
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Pexels|Ono Kosuki

Before the pandemic, people who work in offices still have to commute. Working parents must prepare the kids for school before they can head to their respective offices. As they clock out, it’s just another day, and they do it all over again the next day.

Sometimes we ask ourselves: is it still worth it?

Pexels|Anna Tarazevich
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Pexels|Anna Tarazevich

Yes, what we earn may be equivalent to what our work, skills, and lives are worth. Others even live from paycheck to paycheck. With meager earnings, some could only wish to earn a raise, bonuses, and other incentives.

But this CEO shocked the world when he made one bold move to address the concern of a livable wage.

YouTube Screenshot|CBS Mornings
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YouTube Screenshot|CBS Mornings

CEO of Gravity Payments Dan Price decided to cut his annual salary to accommodate the needs of his employees. Dan earns more than a million dollars a year while his employees only earn $30,000. This is something he wanted to address.

He then announced that all his employees would have a minimum wage of $70,000 a year!

YouTube Screenshot|CBS Mornings
Source:
YouTube Screenshot|CBS Mornings

Dan did this by cutting $1 million off his salary now earns the same as everyone in his company. That’s a huge leap from what he usually earns but is more for him to get by. Plus, this closed the salary gap between him and his employees.

Immediately, he saw the positive outcome of his actions.

YouTube Screenshot|CBS Mornings
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YouTube Screenshot|CBS Mornings

He heard how this move changed the lives of the people he works with. By earning more, some of them get to spend more time with their kids, get to eat healthier, and get to take care of themselves more. For Dan, this is more impactful than any amount or number on their paycheck.

This act of kindness also inspired what Dan never thought the staff would do.

YouTube Screenshot|CBS Mornings
Source:
YouTube Screenshot|CBS Mornings

Gravity Payments’ revenue took a dive during the pandemic. He was given a moral dilemma on how to keep the company afloat. He told his employees about the company’s status and that the options were either to raise their fees to $20 or lay off some employees.

This decision proved to have an easy solution.

“They came back to me and said, why don’t we see what every individual on the team can do in terms of working extra hours and volunteering for a pay cut,” Dan Price said in an interview with KTVB7.

He admitted that he was blown away and was grateful for what they did.

YouTube Screenshot|CBS Mornings
Source:
YouTube Screenshot|CBS Mornings

Around 98% of the employees volunteer a pay cut of 50%, while others didn’t ask to be paid at all. Those who didn’t go for the pay cut still contributed but working longer and doubling their productivity. Since then, the company is still standing and thriving.

Dan admits that the unselfish act of his employees kept them afloat.

YouTube Screenshot|CBS Mornings
Source:
YouTube Screenshot|CBS Mornings

To date, they started paying off the employees from the pay cut. The company has also earned more clients since. From a 50% loss since the pandemic, they are just down to 20%, and Dan is happy that they are still in business despite the losses.

Well, we think Dan’s initial act of kindness very much inspired the employees.

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By Cherie Gozon
hi@sbly.com
Cherie Gozon is a contributor at SBLY Media.
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