Why did this CEO choose to take a R17-million pay cut?
The move has had positive impacts on both his business, as well as his employees' satisfaction.
You rarely hear about a CEO or the big people in corporations taking pay cuts. Not willingly anyway.
But this CEO of a company called Gravity Payments, Dan Price, made headlines seven years ago when he cut his own wages from $1.1-million (R20-million) down to $70,000 (R1.2-million) per year.
The reason he decided to slash his salary was also not something you hear every day...
He wanted to give his employees a pay raise.
After being inspired by one of his employees, he decided to make a massive change in his company.
Rosita Barlow, who loved her job but wasn't able to make ends meet, was forced to take on a job at a fast food restaurant.
She was essentially working two jobs and was afraid that if Price found out, she would lose her job at Gravity Payment.
WATCH what she spoke about below on 'The Kelly Clarkson Show', courtesy of YouTube.
When he found out about it, he was actually inspired by her and decided to flip the script entirely.
He instituted a new organisation-wide minimum wage of $70,000 for all positions, which was received with both praise and skepticism from analysts. (Executive Forum)
Their concern was over the fact that many skilled employees may be unhappy that their less skilled peers are getting the same pay as them, and, secondly, the concern over the business staying afloat due to the wage increases.
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Besides the immense success of Gravity Payment as a business seven years later, Price "noted that in the 6 years since he increased the minimum wage to $70,000, the number of employees who’ve had babies has grown by 10X. Additionally, 70% of his employees reported that they paid down their debt, and home ownership grew 10X as well. It turns out, when you pay employees well, they’re able to grow their families and secure assets for their future." (Executive Forum)
Now that in itself should be a case study for doing it right in life...
Thank you to Dan Price for standing up for the underdog.
Image Courtesy of Instagram