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Do³±czy³: 05 Mar 2024
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 The CEO who, after choosing to reduce his salary, manages to |
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A few years ago, the strategy of a CEO named Dan Price came into the eye of the storm when he decided to cut his own salary of USD 1 million by 90% and raise the salary of his collaborators to a minimum of USD $ 70 thousand per year. .
The exceptional decision received criticism from various trenches, however, Price managed to triple Gravity's income and bring endless benefits to its collaborators. Will we be facing a revolution in the way we run a company and do business?
Who is Dan Price?
Dan Price is known for being an American entrepreneur and CEO of Gravity Payments —a financial services and credit card processing company.
He started the company from his college dorm room when he was just 19 years old, and knew what his mission was when he discovered that credit card processors were taking advantage of many small business owners in his community. He thus began to alter the typical way business is done.
Daniel Price
I never intended to make a lot of money, far from it. I was really upset with this industry because of the way they were treating my customers, and I just wanted to blow everything up.
Dan Price, CEO of Gravity Payments.
Now Price is a celebrated entrepreneur and his mission is to create a world where values-based businesses reshape the economy, so business is no longer about making as much money as possible.
Dan believes it is no longer Ecuador Mobile Number List about doing business as usual, but doing business better.
For this reason, in 2015 he made a decision that would mark his history as CEO, the direction of Gravity Payments and all his collaborators.
"I don't make enough money to live a decent life"
“You brag about how financially disciplined you are, but that translates to me not making enough money to live a decent life ,” was what one of Dan Price's employees told him angrily in late 2011.
Such words haunted his mind for days: “I felt horrible,” he said. The blow was really low, since according to the CEO, he was always proud of treating his employees well. Gravity offered lower prices and better service, so it grew rapidly for four years. However, with the arrival of the Great Recession, the crisis took hold and kept salaries in check, even after saving the company.
"Why can't employees see that?" he asked himself more than once.
CEO Dan Price reduces his salary
Dan Price could open his eyes and notice that he was so scarred by the recession that he was proudly hurting his staff. At that moment he began the transformation and decided to change the way the United States does business.
The CEO handed out 20% annual raises. Profit growth continued to substantially outpace wage growth. He then made a dramatic announcement to his 120 collaborators and invited NBC News and The New York Times to witness:
Over the next three years, a minimum salary of $70,000 will be phased in at Gravity and I will immediately reduce my own salary from $1.1 million to $70,000 to help fund it.
Dan Price, CEO of Gravity Payments.
The reaction was a bomb for the business world, the media and of course, for new people interested in working at his company.
A debate at the door: CEO reduces his salary and triples income
The fact that a CEO made such a decision was news, it was a shock. A debate was opened that continues to this day. The reality is that a large part of American employees had not received a raise as a result of the recession. The strategy of businessmen and other CEOs is to control costs and of course salaries. That increases profits and bonuses. But at what price?
In a U.S. economy that accounts for more than two-thirds of consumer spending, GDP growth is chained to income growth.
Workers can't spend what they don't have, nor do they have the home equity to borrow and spend. Weak wage growth helps explain why this prolonged economic expansion has been minimal.
The debate became so big that Price was attacked in the media, by other CEOs, and even received a lawsuit from his brother, who was his partner in Gravity Payments. Furthermore, his assets were affected more than expected. According to Inc :
Dan Price sold all his stocks, emptied his retirement accounts and mortgaged his two properties, including a $1.2 million home overlooking Puget Sound, and spent another $3 million.
However, today Gravity Payments is positioned as a company whose CEO has made an impact with his business strategy.
The results of Dan Price's strategy
According to Dan Price, since 6 years ago, when he increased his company's minimum wage to USD $70 thousand, his business has tripled. Such an exceptional case that has left other great benefits:
The head count grew by 70%.
Customer base doubled.
The babies the staff had grew 10 times larger.
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