CEO Who Took $1M Paycut To Give All Employees $70K Minimum Salary In 2015 Explains How It Affected The Company

You could say it all started when Dan Price was hiking with his friend Valerie in the Cascade mountains that tower over Seattle. As they walked, Valerie told Dan that her life was in chaos, that her landlord had put her monthly rent up by $200 and she was struggling to pay her bills. Dan got really angry. After all, Valerie — who he had once dated — had served for 11 years in the military, doing two tours in Iraq, and was now working 50 hours a week in two jobs.

“She is somebody for whom service, honor and hard work just defines who she is as a person,” he told BBC. Even though Valerie was earning around $40,000 a year, in Seattle that wasn’t enough to afford a decent home.

Dan, on the other hand, was a millionaire. He set up his company, Gravity Payments, in his teens, and it had about 2,000 customers and was estimated to be worth millions of dollars. He was earning $1.1M a year, but Valerie really made Dan to realize that a lot of his staff might’ve been struggling. So he set out to change that.

Image credits: danpriceseattle

While reading on happiness, Dan stumbled upon a paper, saying that additional income can make a significant difference in a person’s emotional well-being up to the point when they earn about $75,000 a year.

So, he increased the salaries for all of his 120 employees raising the minimum salary to $70,000 and slashed his $1 million salary by 90% in order to make it happen.

Many have praised the brave decision, but it has had its fair share of doubters and haters as well. Recently, Dan shared a powerful message for all of them.