The CEO of Gravity Payments shocked the country when he announced he took a pay cut to improve his employees salaries, and now his company is having the best week in its 11-year history.
Dan Price cut his salary from nearly $1 million dollars to $70,000 and used part of Gravity Payments anticipated profits to nearly double the income of his lowest paid employees. Since making the announcement, Gravity Payments clients have increased and, no surprise, the number of qualified job applicants has drastically increased.
Gravity Payments’ increased business could be influenced by the positive exposure from media outlets like CNN, The New York Times, and Forbes who said the announcement was a, “game changer.” But it hasn’t all been good press for Price.
Price has been criticized by Mika Brzezinski, on MSNBC’s “Morning Joe,” Patrick R. Rogers, an associate professor of management at North Carolina A&T State University, and radio host Rush Limbaugh. Limbaugh said the move was, “pure, unadulterated socialism, which has never worked.”
Despite being labeled a socialist, Price considers himself a capitalist and says the pay raises are good business. He is hoping for lower turnover, increased productivity, and attract the most talented employees. Sam Tabar wonders: In the long term, is his strategy a good plan? Right now, it looks great but only time will tell.