Last month, he took to Twitter to list out all the changes and progress that the company had made in the last five years since he took the step to raise employee salaries
Businessmen and company heads taking pay cuts is not something that is unheard of, especially amid the COVID-19 pandemic when many bigwigs have taken home lesser than their usual salaries. However, in 2015, an American entrepreneur and CEO of a financial services company rose to fame when he announced his 'bold move' to raise minimum employee wage at his workplace to $70,000 a year. For this, he took a $1 million pay cut and realised he would have to mortgage his houses and give up his stocks and saving.
Fast forward to 2020. Dan Price, the co-founder and CEO of Gravity Payments, claims his business has tripled in the intervening time. Last month, he took to Twitter to list out all the changes and progress that the company had made in the last five years since he took the step to raise employee salaries. He said that about 70 percent of his employees have been able to pay off their debts and staff who own homes grew 10 times.
On August 22, Price tweeted,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 programmes 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
Earlier on September 4, he said, "Employees are not cost items meant to be reduced. They are real people with lives who work hard and deserve a living wage and benefits. Since March I've taken $0 in CEO pay to help ensure no layoffs. To CEOs making $10 million and laying people off: how do you sleep at night?"
Senator Bernie Sanders, who is often seen as a champion of the American working class, applauded Price's move saying, "At a time of massive wealth and income inequality in our country, Price sets an example that other companies should learn from."
The wealth gap between America's richest and poorer families more than doubled from 1989 to 2016. In 2019, corporate executive in the States saw their compensations surge 14 percent, with CEOs now earning 320 times as much as a typical worker in the country, as per a study by the Economic Policy Institute.
The study notes that in the 41-year period between 1978 and 2019, CEO salaries in the US increased by a staggering 1,167 percent. When put into context, this is much greater than the pay increase for the typical worker (13.7 percent) and S&P stock market growth (741 percent) during the same period.