After receiving our Established Entrepreneur of 2014 award, Gravity Payments founder Dan Price has just announced yet another game-changing proposition.
Over the next three years, the 30-year-old plans to raise the minimum salary for every employee at his credit card processing company to a minimum of $70,000, he told The New York Times.
The concept dawned on Price, he said, while reading a study about happiness, which ultimately concluded that money makes a major difference in the lives of employees who make less than $70,000.
To pay for raises among his 120-person team, Price is cutting his own $1 million salary to $70,000, and also allocating 75 to 80 percent of the company’s expected profits this year of $2.2 million to forthcoming wage increases.
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All told, 70 employees will see pay increases, Gravity’s head of marketing, Ryan Pirkle, told the Times, and 30 staffers will see their salaries double. The average salary at the company is $48,000 right now.
While Price conceded that the move is bound to have little impact on his personal extravagances, which chiefly include snowboarding and picking up the tab at bars with friends, he made the bold decision in order to give employees their chance at the American Dream, he said.
“The market rate for me as a CEO compared to a regular person is ridiculous, it’s absurd,” he told the Times.
As his company is significantly smaller than the corporate giants caught in minimum-wage activists’ crosshairs, Price adds he wasn’t under any outside pressure to make the call – a signal that many, if not most, entrepreneurs would pay higher if their budgets allowed.
After announcing the news to his team yesterday afternoon, Price was met by ecstatic cheers followed by speechlessness.
Price founded Gravity Payments at age 19 to eliminate the confusion and excessive fees it costs small business owners to accept credit card payments. The company now processes a little under $10 billion in credit card transactions, and counts annual revenues of $150 million.
Gravity Payments has since expanded into other categories, including administering gift and loyalty programs, consulting on point-of-sale systems, handing out low-cost loans and offering analytics based on credit card data.