Boss who took $1 million pay cut to raise employees' salaries to $70k sees business triple

Dan Price, CEO of Gravity Payments, chats with employees during a celebration opening Gravity Payments' new Boise office last year. Photo / Getty Images

A boss who took a million-dollar pay cut so his employees could have a $70,000 minimum salary has explained that his business tripled as a result.

Dan Price of Seattle-based financial services company Gravity Payments slashed his million-dollar salary by 90 per cent in order to raise the minimum salary for all his employees. And the move to give his staff a better life actually paid dividends for his company.

Since my company started a $70k min wage in 2015:
*Our business tripled
*Staff who own homes grew 10x
*401(k) contributions doubled
*70% of employees paid off debt
*Staff having kids soared 10x
*Turnover dropped in half
*76% of staff are engaged at work, 2x the national average

— Dan Price (@DanPriceSeattle) August 23, 2020

On Twitter, he said when he started the $70,000 minimum wage for his company in 2015, American radio personality and conservative political commentator Rush Limbaugh said: "I hope this company is a case study in MBA programs on how socialism does not work, because it's gonna fail." Price hit back: "Since then our company tripled and we're a successful case study at Harvard Business School."

Price claims that not only did his business triple, he says staff who own homes grew 10 times, their superannuation (known as 401(k) in the US) contributions doubled, and 70 per cent of his employees were able to pay off their debts.

Staff turnover halved and he also said 76 per cent of employees were more engaged at work.

He also claimed that more of his staff were able to buy homes and have children.

Dan Price, in the green shirt, CEO of Gravity Payments, celebrates the opening of Gravity Payments' new Boise office. Photo / Getty Images

"What I got back in return is, we went from instead of having zero first-time homeowners per year, now we have many first-time homeowners here at Gravity, and that is so exciting to me," he told Forbes.

"Staff having kids soared 10x," he wrote on Twitter.

When I started a $70k minimum wage for my company in 2015, Rush Limbaugh said: "I hope this company is a case study in MBA programs on how socialism does not work, because it's gonna fail"

Since then our company tripled & we're a successful case study at Harvard Business School.

— Dan Price (@DanPriceSeattle) August 22, 2020

The recent Covid-19 pandemic posed another challenge for the CEO.

"Our company faced 50 per cent revenue loss. We did zero lay-offs. Employees volunteered temporary pay cuts," he said on Twitter. "Five months later, our staff responded with record sales, all pay cuts were paid back and we're doing great. Amazing what treating your employees like people can do."

The stock market finished its best August in 34 years and is at a record high.

The richest 10% own 84% of stock value, so what this means is the rich are getting richer.

As for 401(k)s, 68% of people don't have one. For those that do, this year's rise added a median of $900.

— Dan Price (@DanPriceSeattle) September 1, 2020

Since my company started a $70k min wage in 2015:
*Our business tripled
*Staff who own homes grew 10x
*401(k) contributions doubled
*70% of employees paid off debt
*Staff having kids soared 10x
*Turnover dropped in half
*76% of staff are engaged at work, 2x the national average

— Dan Price (@DanPriceSeattle) August 23, 2020

He told BBC Money: "We're glorifying greed all the time as a society, in our culture. And, you know, the Forbes list is the worst example – 'Bill Gates has passed Jeff Bezos as the richest man.' Who cares!?"