A U.S. CEO has been making headlines around the world for lowering his $1.3 million (US$1 million) wage by 90 per cent in order to give every one of his employees a minimum yearly income of $91,000 (US$70,000).
It’s not something you hear about often, but Dan Price, 30-year-old owner and CEO of U.S. payment processing company Gravity Payments, has decided to take a huge pay cut in order to remove what he calls the “distractions” his employees were experiencing with financial difficulties.
“Let me be clear, I think this is going to be a great thing for our company. I think it’s going to be a great ROI,” Price said in an interview with Fox News.
“The way we look at it, it’s about trust and it’s about values. When you take care of people, they tend to take care of you.”
Future Presidential candidate Hillary Clinton targeted CEOs in a recent speech, saying the American public should not be facing financial troubles “when the average CEO makes about 300 times what the average worker makes.”
“If rich people are not worried about today’s levels of income inequality, then they are stupid,” Clinton said.
The timing of Price’s move may not be great for the public opinion of other high-earning CEOs, such as GoPro CEO Nicholas Woodman. The latest Bloomberg Pay Index has revealed Woodman is the highest paid CEO in the U.S., the 39-year-old granted 4.5 million restricted stock units valued at $284.5 million in 2014. Woodman’s take of over a quarter of a billion dollars is over four times the $US65 million taken home by Apple CEO Tim Cook.
The long-term benefits of Price’s decision to lower his own pay in exchange for higher earning employees remains to be seen, but the marketing value of his move is certainly obvious. The world’s media has jumped on his story, thrusting his rapidly growing company further into the spotlight with the type of advertising most businesses can only dream of.
A glimpse at the virality unfolding…
Dan Price is a hero. Hope more business leaders follow suit by sharing wealth. The cult of the CEO is repugnant: http://t.co/O4iwto0BdF
— Martin MacMahon (@martinmacmahon) April 15, 2015
— Emperors New Clothes (@Emps_NewClothes) April 16, 2015
— craig fuller (@craigfuller44) April 14, 2015
Pretty cool! Dan Price CEO @ Gravity Payments raised all employees’ salaries to at least $70,000 by cutting his own http://t.co/FYWEaSccLU
— Geek_News (@Geek_News) April 14, 2015
One critic of Dan Price’s $70,000 minimum wage says, “His mind-set will hurt everyone in the end.” http://t.co/cuongkoBiW
— NYT Business (@nytimesbusiness) April 20, 2015