CEO stuns employees with immediate $10K raise, pledges a $30K raise over the next 5 years
"The inequality needs to stop," CEO Dan Price said.
Employees at an Idaho business got the news of a lifetime this week. Workers making $40,000 -- the company's current minimum salary -- would get an immediate $10,000 raise and that within five years, the minimum salary would increase to $70,000.
Gravity Payments, a Seattle-based credit card processing company, recently acquired ChargeItPro in Eagle, Idaho, and the group moved into a new office space. Gravity Payments CEO Dan Price flew in to welcome employees to the new office -- and then stunned them with the news that many of the employees would get a $10,000 pay bump effective immediately and the minimum salary for employees would rise to $70,000 by 2024.
A majority of the employees were making under $30,000 prior to the acquisition, according to Price.
"I’m kind of heartbroken right now by the vast consolidation of wealth and power that's happening, and in addition how that's affecting our decisions around climate," Price, 35, told ABC News Tuesday of his decision.
In 2015, Price announced a minimum salary of $70,000 for his entire Seattle office -- and took an "80 or 90% pay cut" in his own salary.
"I'm sick of being part of the problem, I want to be part of the solution," he said. "Previously, I was making a million dollars a year and people working for me were making $30,000 a year and that's wrong, I was feeding into the problem."
The announcement Monday "allows them to make choices that are in alignment with their values not having them be reliant on money," he said.
Price said the reactions in Boise -- where he brought the same minimum salary pledge as the Seattle headquarters despite there being a lower cost of living -- were mostly shock and happiness, and that he "got a lot of hugs and high-fives."
"I heard from somebody who was a single parent, that they were not necessarily going to need to work two jobs anymore … and they were going to be a better parent," he said.
You don't have to do crazy math to see where the money comes from, according to Price, who has long been an advocate of equal pay in corporate America.
"I took between an 80 and 90 percent pay cut, and our chief operating officer took about an 80 percent pay cut, and our executive team absolutely makes less than what other companies would pay," he said. "It absolutely is coming out of executive pay, it’s an investment, I think we’ve proven that it can work."
"We are a real business and not a charity organization. We’re growing and thriving as a business, we’re not taking outside money, we’re not taking donations," he added. "We’re succeeding as a business doing this."
Gravity Payments works to "make payment processing fair for small- and medium-sized businesses," according to Price, who said that they are also now working with software companies to develop solutions that help small businesses process payments so that people's interactions with their customers don't simply revolve around money.
Price said he has seen his employees' lives change dramatically since he rolled out the new salaries at his Seattle branch, saying, "we went from having zero to two babies born per year to having over 30 babies born."
He added that he feels it's "surprising and a bit disturbing" that more companies haven't followed suit in redistributing profits.
"I'm just shocked at the lack of willingness to do this, especially in big companies in corporate America," he added. "We’ve proven that this can work."
While he acknowledges that it is hard for small businesses and "we need to be really nice to our small business owners," he says there is no excuse for some of the bigger guys.
"Any company that is making over a million dollars a year in profit absolutely should be doing this," he said. "The inequality needs to stop."
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