The Boss Who Put Everyone on $70K
Update: When the story below was written, it was pre-pandemic. It’s interesting to see how the company, and its commitments, fared. At the beginning of the pandemic, Gravity Payments’ $4 million monthly revenue fell by 50%. The CEO cut his salary to zero. Ten other executives also agreed to work for free, and another 24 halved their salaries. All of Gravity’s 210 workers volunteered to take cuts of 5% – 10%. Without the cuts, the company would have been forced to lay off 40 workers. As of April 2021 revenue is back up, albeit slightly below pre-pandemic levels. Gravity Payments has repaid the money workers lost when they agreed to the pay cuts, and the company recently began delivering raises of between 5% and 6%. The company also plans to increase its workforce by 10%, to make the workload easier.
“It doesn’t matter how strong your opinions are. If you don’t use your power for positive change, you are, indeed, part of the problem.” – Coretta Scott King
The purpose of the Cranlana Centre is to strengthen wise and courageous leadership. We do it so that our alumni will walk out our doors and make positive change. In all their spheres of influence.
Dan Price, co-founder and CEO of Gravity Payments, became “angry that the world had become such an unequal place” during a conversation with a friend who was struggling financially, and “suddenly it struck him that he was part of the problem.”
So he made change. He decided to raise the minimum salary at Gravity. He did some research, crunched some numbers and arrived at a figure of $70,000. That meant a third of his workforce had their salaries doubled immediately.
Interestingly he attracted a fair amount of criticism, including from customers who took the time to hand write him letters objecting to what they saw as a political statement.
Four years on, Dan Price and his company are benefitting. The impacts are measurable and impressive – headcount doubled and the value of payments processed has gone from $3.8bn to $10.2bn. There are other important metrics too – 10% of the company have been able to buy their own home compared to 1% previously, and 40 babies have been born since the announcement where only 0-2 babies were previously being born per year to the team. He may not have inspired the broad structural change he hoped to, but he offers a great example of what happens when you choose to use your power for positive change.
Read the full article here.
via BBC , 28 February 2020
Photo by Ricardo Gomez Angel on Unsplash