CEO took a 90% pay cut to raise staff's minimum salary to $70K and the company is now thriving

Editor's note: This article was originally published on April 15, 2021. It has since been updated.

A few years ago, Dan Price—the head of a credit card payment processing company in Seattle—did something no CEO in history would even dream of doing. Taking a paycut of about a million dollars, he introduced a $70,000 minimum salary for all his employees. While at the time, conservative organizations and news networks ridiculed the supposedly "socialist" business practice, today Price is the one laughing as his company, Gravity Payments, and its employees are thriving. Taking to Twitter in April 2021, he proudly flexed the success of his experiment.

"6 years ago today I raised my company's min wage to $70k. Fox News called me a socialist whose employees would be on bread lines. Since then our revenue tripled, we're a Harvard Business School case study & our employees had a 10x boom in homes bought. Always invest in people," Price tweeted. "Since our $70k min wage was announced 6 years ago today: Our revenue tripled, headcount grew 70 percent, customer base doubled, babies had by staff grew 10x, 70 percent of employees paid down debt, homes bought by employees grew 10x, 401(k) contributions grew 155 percent, [and] turnover dropped in half."

"After our $70k min wage: 76 percent of employees are engaged at work—2x the national average, customer attrition fell to 25 percent below [national] average, we expanded to a new Boise office & enacted $70k min wage there, our highest-paid employee makes 4x our lowest-paid employee—down from 33x," Price continued. "We started our $70k min wage with about 130 employees in Seattle. It worked so well we expanded it to a new Boise office, where the cost of living is lower but people deserve good pay all the same. We now have about 200 employees."

He revealed that even when the company suffered a 55 percent revenue loss almost overnight due to the pandemic, his employees were so invested in the well-being of the company that they volunteered to take temporary pay cuts to prevent any layoffs. "We weathered the storm, paid everyone back, and are now giving out raises," he shared. "What helped inspire our $70k min wage? An employee was secretly working a 2nd job at McDonald's. It was clear I was an awful CEO who was failing his employees. I gave her a raise to quit that job. No one should have to work two jobs to make ends meet."

"When I've been on Fox News, the production assistants who led me through backstage confided they were making min wage and struggling to get by in NYC. I asked the hosts (who make seven figures and laughed at me on air) to talk about their workers' pay on air. They always said no," Price tweeted. He went on to emphasize that the success of the $70k minimum wage policy at Gravity Payments wasn't a fluke as a Massachusetts biotech recruiting firm also saw revenue, headcount, and retention rate growth after raising its minimum wage.

"To help finance our $70k min wage, I cut my CEO pay from $1.1M to $70k. I don't miss anything about the millionaire lifestyle. Money buys happiness when you climb out of poverty. But going from well-off to very well-off won't make you happier. Doing what you believe is right will," Price wrote. "People focus on the cost of paying employees well but not on its benefits. For us: Our happy employees drove record sales and we now have 20,000 small business clients. Our turnover is low and we spend $0 advertising openings since we get thousands of applicants. We're doubling down on our mission to invest in employees. Our revenue (which comes from small business credit card processing) is still down slightly from pre-pandemic. But we're handing out raises of 5-6 percent and hiring to grow headcount by 10 percent to make workloads easier."

Price's accomplishment was widely praised on social media as many netizens noted how much of an impact it would have on the world if more CEOs adopted a similar policy. "Unbelievable! We need more CEOs like you. I haven't worked for any boss who gave a small damn about their employees, much less a damn today! I'm hopeful there will be more who care about their employees! Thank you, Dan, you rock," tweeted @Pennypacker59. "Thank you for being solid proof that this works. This shakes the greedy CEOs and shareholders who made fun of you and rightwing media pundits to their cores," wrote @4HumanUnity.