A top boss at a financial services company sacrificed his lucrative earnings to guarantee every employee at least $70,000 a year.
Gravity Payments CEO Dan Price could have a six-figure salary but he accepted a $1 million pay cut to pay his workers more.
Critics predicted the Seattle-based credit card processor company would go bankrupt. However, the business tripled its revenue and doubled its workforce six years later, thanks to very strong staff retention.
“Our turnover rate was cut in half so, when you have employees staying twice as long, their knowledge of how to help our customers skyrocketed over time,” Price said according to CBS News. “That is really what paid for the raise more so than my pay cut.”
Staff became so loyal to the company they voluntarily reduce their own income by up to 60 percent. This helped the company recover faster from a 55 percent drop in turnover during the COVID-19 pandemic.
“We reduced our salary to $40,000,” employee Carrie Chen said according to the broadcaster.
“I think we took each about somewhere around 60 percent,” Chen’s husband and coworker Alex Franklin added.
BL understands the workers were also motivated by the CEO’s conservative lifestyle. He settled for an annual $70,000 salary, sold his second property, and lived a simple life.
Eventually, the company’s financial situation improved and everybody’s wages were returned to pre-pandemic levels.
Several employees thanked Price by pooling their savings together to buy him a new sedan, even though the boss could have easily retained his six-figure salary and bought one himself.
He believes more large organizations would offer the same level of rewards for staff loyalty, if modern business models were significantly changed.
“I feel like I have been shouting from the rooftops like, ‘This works, this works, everybody should do it!'” he said. “Zero big companies are following suit because the system values having the highest return with the lowest risk, and the lowest amount of work.”
Average CEOs are usually compensated 320 times more than regular employee salaries, according to the Economic Policy Institute.