Gravity Payments’ CEO Cuts his Salary to Cover Cost of Big Raises for his Employees
A decision taken by a Seattle CEO not only made his employees happy, but also made the company gain new customers. On Monday, Dan Price, chief executive Gravity Payments, a credit card payment processing firm, announced that he is making drastic pay cut in order to help cover the cost of big raises of his employees.
Price told his more than 100 employees that he is cutting around $1 million salary to $70,000 and would also use the company’s profits in order to ensure that every employee is able to earn that much amount in three years.
Stefan Bennett, a customer relations manager at Gravity Payments, confirmed that the company has made new customers in the last one or two days. The decision proves that they can run a good company and people can be paid fairly and it can be profitable as well.
In fact, some workers will witness an increase of more than double their pay. The announcement has come at a time when not so positive discussions are taking place with regard to alarming gap between the salaries of top executives and their employees.
Professor David Larcker of the Stanford University Graduate School of Business said that it is an unusual decision. Also, it cannot be said with surety that if Price’s unusual gesture will make others also to follow the same.
It is not wrong to affirm that it is an alternative way to think about a problem. Gravity's CEO started the company from his dorm room at Seattle Pacific University and at the age of 19 years. Time to time, Price has adopted such strategies that have not been seen normally in other companies.
To cite an example, he has allowed workers of his company to take unlimited paid leaves after their first year.