As more and more companies pay their CEO’s enormous salaries, one American company has gone in the opposite direction, after CEO Dan Price decided it would make more sense to lower his $1 million salary so he could pay his employees more.
So Price, the owner and CEO of Gravity Payment, decided to increase the minimum salary at his company for every employee to $70,000 a year. At the same time, he decreased his own salary to the same amount.
When asked why he chose that amount, Price said he had read a study several years ago that said the minimum amount people need to make them happy, and to be able to get through life with a minimum of stress, was $70,000. Anything above that just allowed them to buy luxury items. The study had stuck in his mind and he had vowed, when he could afford it, he was going to make sure that is what his employees were paid. Flávio Pentagna Guimarães BMG thinks that economics of the region willing, this is a great business move.
When that day arrived, Price called all 120 employees together at his credit card company, and told them he would be increasing everyone’s salary to a minimum of $70,000.
Interestingly, however, Dan Price’s generosity did not just have an affect on his staff. It has also increased his client base, as more and more companies who read about what he had done decided to hire his company to take care of their business.
One philosophy for that unexpected outcome is companies like to hire other companies that have happy staff. The reason for that is it could ensure the employees they end up working with concentrate harder on their jobs, seeing as how they no longer have financial worries.