Dan Price is an American businessman who rose to fame in 2015 by cutting his CEO’s salary by 90% to cover raising his employees’ salaries to a minimum of $70,000 per year. Price’s move garnered mixed reactions, to say the least. On the one hand, he was hailed as “a capitalist with a conscience” and was compared to Robin Hood.
On the other hand, he was labeled as a socialist, mainly by commentators on Fox News and Fox Business. In addition, some clients left his Gravity credit processing company, and he lost employees who thought the wage increase was unfair. He also faced a lawsuit from his brother.
Dan stood his ground, however, and according to a recent twitter threadIt has been very worth it. This article will look at the surprising benefits of Dan’s selflessness, the challenges he faced, and his response to allegations of abuse from his ex-wife.
Dan’s decision to reduce his salary by $930,000 paid off, as his company nearly tripled the value of the payments it processes.
Dan Price grew up in a religious family of six children outside of Boise, Idaho. The idea to start a business revolving around credit cards came to Dan during high school. His band, Straightforword, played at a local coffee shop whose owner repeatedly complained about the high cost of credit card processing. Dan found out about the slip fees from the disgruntled owner.
Price’s father later got a job in the credit card industry. He learned more about the industry from his father and, in 2004, Price and his brother Lucas founded Gravity. Dan became CEO in 2006 and in 2008 the company came close to bankruptcy. The financial crisis hit Gravity hard at a time when the company was barely profitable.
However, the company managed to stay afloat, and in 2012, Dan began doling out the high salaries to his staff. He pointed out that with every increase in salary came an increase in profit. The same year, Dan’s compensation exceeded $1 million.
His decision to cut his salary by 90% for the benefit of his employees came after a friend, who learned much less than he did, enlightened him on the difficulties of having a meager salary. Dan recalled a 2010 article by Daniel Kahneman and Angus Deaton that concluded that people’s emotional well-being improves as their salary increases up to $75,000.
Therefore, Dan decided to increase his employee’s salary to $70,000. In an email to BloombergDan’s friend Valerie Molina revealed: “Dan said, ‘I’m going to pay all my employees a minimum of $70,000. I’m not sure exactly how I’m going to do it, I need to calculate the numbers, but I’m doing it. Is it crazy?’”
Price is reaping the benefits of investing in his employees. In a series of tweets – in which he made sure to tag his harshest critics – Dan detailed Gravity’s exponential growth since 2015. Among other things, the company’s revenue has tripled and the customer base has doubled. He added:
“We started our $70,000 minimum wage with approximately 130 employees in Seattle. It worked so well that we expanded it into a new office in Boise, where the cost of living is lower but people still deserve good pay. Now we have around 200 employees.”
Dan’s company faced hard times due to the coronavirus pandemic, but things are looking up
Oliver Ludlow/The Observer
After Dan’s raise was announced, he lost two employees who complained that the raise was unfair to higher earners. He also lost clients who believed that the salary increase would lead to higher costs. Dan’s salary would cover much of the cost, with the rest coming from company profits.
Price did not worry much about a lifestyle change as he had a lot of savings and was confident that his salary would increase with the company. “There is greater inequality today than there has been since the Great Recession,” Dan said. The Huffington Post. “I had been thinking about these things and thought: ‘It’s time. I can’t go another day without doing something about it.”
There was no guarantee that Dan’s plan would succeed, but the numbers show that it has been overwhelmingly successful. The coronavirus pandemic threatened to derail the company’s progress, but stakeholders made sacrifices to keep Gravity running. Dan wrote in Washington Post that employees accepted temporary pay cuts and, thanks to sufficient cash reserves, Gravity continued to operate. He wrote:
“Instead of viewing our employees as expenses that could be cut, we recognized their humanity and the critical role they play in our business. In March and April, our sales were down, but every month since then, we’ve outperformed ourselves since last year. Avoiding layoffs helped our company weather the crisis.”
Dan’s ex-wife, Kristie Colon, accused Price of abusing her during their marriage.
Dan and his ex-wife, then named Kristie Lewellyn, were married in their 20s after Dan’s Christian parents demanded they marry or end their relationship. The couple divorced in February 2012, and the couple reportedly had an amicable divorce.
Kristie, who changed her last name to Colon, questioned the niceness of the couple’s divorce when she revealed that Dan repeatedly abused her. In a previously unpublished TEDx talk at the University of Kentucky in late October 2015 on the benefits of writing to deal with trauma, Kristie read from her journal:
“He got mad at me for ignoring him and grabbed me and shook me again. She also knocked me to the ground and got on top of me. She started punching me in the stomach and slapped me across the face. She was shaking a lot.”
Colón recalled locking himself in a car, “afraid of hitting the ground again or drowning in the bathroom upstairs like before.” “The events you described never happened,” Dan said to a Bloomberg reporter who read the accusations to him. Price also sent a statement to The Guardian denying Kristie’s claims:
“Unfortunately, people in the public eye are subject to speculation and criticism. Sometimes it’s fair, other times it’s not. The recent story in Businessweek contained reckless accusations and unsubstantiated speculation that are unequivocally false.”
Categories: Biography
Source: vcmp.edu.vn