Dan Price, of American financial firm Gravity Payments, took a pay cut to make sure all his staff got a salary boost – after finding out one of them had to work a second role just to pay rent and bills
Image: Gravity Payments)
An American boss who brought in a minimum wage of $70,000 (£51,300) after finding out an employee secretly had to work a second job at McDonald’s says the formula still works six years later.
Dan Price, 37, is chief executive of credit card payment firm Gravity Payments, and hiked his employee’s salaries after one told him she was having trouble affording her bills.
The staff member said her salary of £31,000 was not enough to pay bills in Seattle, an expensive city.
Price then slashed his own salary by £730,000 to help hike the pay of his staff, as well as selling a second home and spending some of his savings.
He even lowered his salary to around £51,300 – the same as his lowest-paid employee gets.
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At the time opinion was divided on his bold move. Some said he would go bankrupt, and others that he was a hero boss.
But six years on and the move has paid off, Price told CBS News.
He said his company has tripled in size in the period and he is still paying his employees at least £51,300 every year.
He said Gravity now has incredibly loyal staff, and that pays off because they stay longer and are better value.
“Our turnover rate was cut in half, so when you have employees staying twice as long, their knowledge of how to help our customers skyrocketed over time and that’s really what paid for the raise more so than my pay cut,” he said.
But to repay Price for the sacrifices he made, his staff recently clubbed together to buy him a car – a new Tesla.
“My employees have done way more for me than I could ever do for them. So the fact that they wanted to get me such an unreal, amazing gift, it’s pretty special. I don’t know if I can put it into words,” Price said.
Price, who founded Gravity Payments in 2004 at the age of 20, is a socially-conscious chief executive who is outspoken about the excesses of capitalism and high executive pay.
More than five million people became millionaires during the global pandemic, research showed last month , as the gap between the rich and poor widens.
There are now around 56 million millionaires in the world.
Analysis by bank Credit Suisse shows that the UK now has the fifth-highest proportion of high net worth individuals in the world, with 4% of the total.
The number of UK millionaires rose from 2.2million in 2019 to 2.4million in 2020.
The percentage of the UK population worth more than £1million has risen steadily.
Back in 2000 just 1.7% of Brits qualified. That rose to 3% in 2010 and 4.7% in 2020.
The United States has the most millionaires – 39% of the total.
Behind that is China, with 9%, Japan, with 7%, Germany (5%) and the UK (4%).