Great The New York Times piece on Dan Price, CEO of Gravity Payments. He has made a bold move and has set the minimum salary up to $70.000 USD for all his employees.
Three months ago, Mr. Price, 31, announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it.
The move drew attention from around the world — including from some outspoken skeptics and conservatives like Rush Limbaugh, who smelled a socialist agenda — but most were enthusiastic. Talk show hosts lined up to interview Mr. Price. Job seekers by the thousands sent in résumés. He was called a “thought leader.” Harvard business professors flew out to conduct a case study. Third graders wrote him thank-you notes. Single women wanted to date him.
While he – expectedly – got a lot of good feedback, there was quite some unexpected backlash as well. Internally, some employees did not agree with giving significantly more money to “to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump”.
Externally, other business leaders are concerned about potential wide-spread impact:
(…) they were split on whether he was a brilliant strategist or simply nuts. As much as they respected him, they were also disturbed. “I worry how that’s going to impact other businesses,” said Steve Duffield, the chief executive of the DACO Corporation, who met Mr. Price through the Entrepreneurs’ Organization in Seattle. “We can’t afford to do that. For most businesses, employees are the biggest expense and they need to manage those costs in order to survive.”
Taking all the pros and cons aside, though, the whole move is basically not entirely different to other incentive schemes to attract and retain talent. Other companies use methods such as equity plans or employee profit sharing, which might be not considered as bold move as Dan Price’s, though.
“There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs,” he said. When other entrepreneurs suggested that stock options or profit-sharing would have been a better approach, he said that’s the way capitalism works: Everyone tries to invent the best mousetrap. “I came up with the best solution I could.”