CEO takes $930K pay cut to give staff raises


CEO Dan Price of Gravity Payments

Dan Price, who has just cut his own pay $930K to make his firm’s “minimum wage” $70K/year, graduated from a Christian high school and went to a Christian college but says this is a business decision.

This week’s most startling financial news comes out of Seattle, where the CEO of credit card processing firm Gravity Payments announced he would take a $930,000 pay cut to make sure every member of the firm’s staff earned at least $70,000 a year.

Gravity is a small firm of 120 that CEO Dan Price founded at age 19 in an effort to reduce the costs of credit card processing to small businesses. More than half the employees will get raises under his plan, some of them doubling their pay checks. Price himself will be earning $70,000 — decidedly countering the national trend which has CEOs earning, on average, 350 times as much as their lowest paid workers. 

Price has told various media outlets that he has been concerned about rising income inequality for some time. His decision was catalyzed, he says, by a conversation while hiking with a friend who was facing financial challenges due to rising rents in the area.

The $70,000 minimum wage Price chose for his firm is more than 2.5 times median US individual earnings ($26,989 as of Census 2012). He says it was based on a Princeton University study that indicated Americans consider themselves happier as their income increases to $70,000, but after that point, money doesn’t buy greater happiness.

Although it has been a while since those with abundance have seriously considered that they might be responsible to those with less in the community, Price’s behavior has old-timey antecedents.

Pay-Shares Have Happened Before

Early in the 20th century, during the recessions that preceded the Great Depression, it was not uncommon for those with high pay or long hours to give some back to the firm so those with inadequate pay or short hours got enough. Many of the small businesses where this occurred were located in the Pacific Northwest, so Price (although not originally from Seattle) has tapped into the historic spirit of his community by his gesture.

Dan Price emphasizes that what he is doing makes good sense for his company. He considers it “a capitalist solution to a social problem.” If we look further into history, this approach to income inequality antedates the words “capitalism” and “socialism” by thousands of years. We see God taking this approach when providing manna for God’s people in the wilderness:

“… some gathered much, some little. And when they measured it by the omer, the one who gathered much did not have too much, and the one who gathered little did not have too little. Everyone had gathered just as much as they needed.” Exodus 16:17-18

God Urged Income Sharing Long Ago

Then we see God urging a similar approach among the people of Israel:

” … If anyone is poor among your fellow Israelites in any of the towns of the land the Lord your God is giving you, do not be hardhearted or tightfisted toward them.  … Give generously to them and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to.” Deut. 15: 7-10

The early Christian community likewise made sure that all had provision (and work). My own Wesleyan tradition includes a similar  history of leaders who urge both sharing with those in need and helping them to succeed in their jobs.

Does God Motivate Dan Price?

So is Dan Price acting as a businessman? A Christian (which he hasn’t acknowledged in print yet)? Or both?

My best guess: Anyone who (until this week) made $1 million a year but has friends who own private aircraft and other friends who find it difficult to pay their rent is, at the very least, living according to James 2:1:

” … believers in our glorious Lord Jesus Christ must not show favoritism.”

Someone who, reports say, has been saving a large portion of his million dollars each year and drives a 12-year-old car with more than 140,000 miles on it also appears to understands proper stewardship of God’s gifts. So even if he considers it important, as reported, to buy a round for his friends once a month, he sounds like the kind of guy Luke’s gospel described:

“And do not set your heart on what you will eat or drink; do not worry about it. For the pagan world runs after all such things and your Father knows that you need them. But seek his kingdom, and these things will be given to you as well.” Luke 12: 29-31

Dan Price is a graduate of Nampa (Idaho) Christian High School and drop out from Seattle Pacific University (a Christian college). But is he a Christian?

He’s not saying. Let his light keep shining.

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About Carlene Hill Byron

The former editor of New England Church Life and The New England Christian, Carlene Hill Byron is enjoying being home in Maine after 20 years in North Carolina. She is a member of the Redbud Writers Guild. Find her at christianpurposeblog.wordpress.com, churchandmentalillness.wordpress.com and on Facebook at MyHouseHasHistory.
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One Response to CEO takes $930K pay cut to give staff raises

  1. Reblogged this on Keeba23's Blog and commented:
    Greed and the greed of the elite have always been the essential points to these divided states.

    President Obama had ALWAYS said he could not increase/boast the economy on his own; it takes people such as Dan Price. It DEFINITELY helps when people vote in the congressional races as it is Congress that has the MAJORITY of the power.

    What a great story about a man that not only reinvested in the company but also believed in his employees so much so, that he invested in them!

    Kudos to Mr. Dan Price and those like him!

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