Dan Price is an American entrepreneur and founder of Gravity Payments, a credit card processing company he launched in 2004. With early exposure to business through his father’s consulting work, Dan's interest in the payments industry grew. He noticed the predatory practices imposed on small businesses by major credit card companies. His company aimed to provide affordable, transparent services to small businesses, and under his leadership, Gravity Payments became the largest credit card processor in Washington state by 2008. In 2015, Price made headlines by cutting his own salary from $1.1 million to $70,000 and raising the company’s minimum wage to $70,000, sparking widespread discussions about income inequality and corporate responsibility. His bold decision emphasized his commitment to fair wages and business ethics.
2. The Problem
Over the past five decades, the gap between the wages of American workers and CEOs has grown exponentially. Adjusted for inflation, the average wage for the American worker has stagnated or even decreased, while CEO salaries have ballooned, with some making hundreds of times more than the average employee. Despite the growing income inequality, federal policies have failed to address the widening wealth gap. This inequality has created a system where workers struggle to make ends meet, while executives enjoy outsized compensation. As a result, employee morale, retention, and overall job satisfaction have suffered, and businesses continue to grapple with disengaged workforces and high turnover rates.
3. The Solution
Dan's solution was radical but simple: take a massive pay cut and ensure that all of his employees earned a living wage of $70,000 a year. This was a bold move—he slashed his own salary by 90%, from $1 million to $70,000, and restructured the company’s pay scale to prioritize fair compensation for all employees. The result was transformative. Gravity Payments saw a sharp increase in employee retention, as workers felt more valued and financially secure. With less turnover and more loyal employees, the company’s culture thrived. Employees were more motivated, engaged, and productive, leading to business growth. Price’s decision to invest in his employees’ financial well-being not only closed the wage gap but also proved that fair pay can drive company success.
4. The Motivation
Dan’s motivation was two-fold. First, having witnessed his parents fall prey to predatory practices of credit card companies, he decided to create a that implemented ethical practices. But after seeing the widening gap between American CEOs and their workers, and witnessing the challenges faced by employees struggling with low wages, he felt compelled address what public policy and politicians would not. Dan believed that businesses had the power to challenge systemic inequality from within. His decision to cut his salary was a personal sacrifice, but one he believed was necessary to create a fairer and more just workplace. His motivation was rooted in a deep belief that businesses could be a force for good and that paying employees a living wage could benefit both the individuals and the company as a whole.
5. The Lessons
Dan’s story offers several key lessons for business leaders and entrepreneurs. First, it demonstrates the power of prioritizing employees’ financial well-being—when employees feel valued and secure, they are more engaged, productive, and loyal. Second, it shows that challenging the status quo can lead to unexpected rewards. By taking a pay cut, Price not only closed the wage gap but also fostered a stronger, more cohesive company culture. Third, it reinforces the idea that businesses can be a force for social change. By aligning company values with fair compensation, leaders can build businesses that benefit both the individuals and the organization. Lastly, it highlights the importance of leadership and moral courage—Price was willing to lead by example, proving that doing the right thing can lead to both ethical and business success.
Conclusion
Dan’s bold move to address predatory business practices and income inequality within his own company has had lasting impacts, not just on Gravity Payments but on the broader conversation about corporate culture in America. By cutting his salary and ensuring a $70,000 minimum wage for all employees, Price demonstrated that fair pay isn’t just the right thing to do—it’s also good for business. With employee retention soaring, morale improving, and business growing, Price’s example proves that addressing the wage gap can lead to a loyal and productive workforce. Dan Price’s leadership shows that businesses can and should take responsibility for fostering a fairer, more equitable economy. You can make a difference, and you can thrive while doing so.