Dan Price

Dan Price
Born Michigan
Nationality American
Occupation CEO of Gravity Payments
Known for CEO of Gravity Payments, and for setting a $70,000 minimum wage
Website GravityPayments.com/danprice

Dan Price (born 1984)[1][2] is an American entrepreneur and business executive. He is the founder and CEO of Gravity Payments, a Seattle-WA based credit card processing company.

Price received national recognition in 2015 for announcing that all employees at Gravity Payments would receive a minimum wage of $70,000.[3] He was named Entrepreneur Magazine's 2014 Entrepreneur of the Year.[4]

Life and career

Price was born in Lansing, Michigan, in May 1984. He was one of six children. His family moved to Wisconsin and then rural Nampa, Idaho, when he was 5.[1][5]

Gravity Payments

Main article: Gravity Payments

Dan Price founded Gravity Payments in January 2004 at the age of nineteen.[6] The idea struck him when he was playing in his rock band, Straightforword, at a local coffee shop in Idaho. The owner started having problems with their credit card processor and felt ground down by the high fees. When Price looked into it, he realized that he could do it cheaper, more efficiently and with better service.[3][7] Using experience and contacts from having played in the band, and with advice from his father, Ron Price, a businessman, he acquired 200 clients by his senior year of high school.[1]

From there, Price decided to go from helping his clients negotiate with credit card processing companies to offering the service himself. [8]

Though many of his clients had been with him for years, Price didn’t take it for granted that they would agree to trust him in his transition from negotiator to the one handling their money and data. But many did.[8]

“I never intended to make a lot of money, or really any,” he told Entrepreneur Magazine. “I was really upset at this industry for the way they were treating my clients, and I just wanted to blow the thing up. So I was like, ‘I’m going to charge a third of what everyone [else does].’”[7]

$70,000 minimum wage

In 2015, Price made headlines around the world when he announced to his 120-person staff that he planned to raise the salary of every Gravity Payments employee to a minimum of $70,000.[3] He also cut his million-dollar salary to help finance the raises.[9] He was reportedly inspired by reading an article cowritten by Daniel Kahneman and Angus Deaton analyzing data from a happiness and well-being study conducted by the Gallup Organization. The analysis showed that emotional well being rises up until about $75,000 in salary.[10]

Two employees left because they thought the pay raise was unfair, and the company lost a few clients, but they are reportedly still growing.[11]

Genesis of the $70K Decision

In 2011, Price had a feeling that a team member was angry with him, so he approached them to find out more. The team member discussed with Price that they were being underpaid. Price, taken aback, felt shocked and hurt, but ultimately agreed with his colleague. Thus began his journey to change the way business is done by putting purpose and people above profit. Price implemented an aggressive raise structure starting in 2012, and leading up to 2015. The raises averaged 20% annually.[12]

At the beginning of 2013, Congress let the payroll tax relief plan expire, bumping taxes up from 4.2% to 6.2%. Knowing this would hurt the Gravity team to be taking home less, Price felt the right thing to do to support them was to give everyone making less than $100K an immediate 2% raise to offset the tax.[13]

In 2014, Price recognized that each team member had unique circumstances and different PTO needs. Because of this, Gravity implemented an unlimited PTO policy. This policy was designed to ensure that employee’s needs are taken care of.[14]

In March 2015, while catching up on a hike, Price’s friend confided in him some financial troubles they were facing. Their rent was going up by $200 a month and they couldn’t afford it. They made about $40,000 a year. To Price, who made $1.1MM, $200 didn’t seem significant, but to his friend, it meant the potential of being forced out of their home. Soon, Price realized that dozens of Gravity team members made about the same as his friend. As a business leader, he was in a unique position to take a stand and do something about the wage gap. He turned to his friend and confided in an idea, “I’m going to offer all my employees a $70K minimum wage. Is that crazy?” [15]

On April 13, 2015, Price announced to his company that starting immediately, Gravity Payments will phase in a minimum wage of $70,000. Immediately, all employees made a minimum wage of $50,000. By December 2016, everyone must make at least $60,000. By December 2017, everyone must make $70,000. Employees sat in stunned silence. Soon, the entire office erupted into cheers, high fives, and hugs.[16]

Reaction to the $70K Decision

After the New York Times broke the story, the reaction was “tsunamic” with 500 million interactions on social media and NBC’s video becoming the most shared in network history. Gravity received 4,500 resumes in the week after the announcement and were flooded with stories from other business leaders who wanted to do the best they can for those they’re leading. A few of those leaders included Tony Tran of Third & Loom,[17] Josh Ledbetter of Ledbetter, Inc., Mario Zahariev of Pop’s Pizza & Pasta, and Stephen Aarstol of Tower Paddle Boards.[12]

There was a range of responses to this action, ranging from support to anger.[11]

Although there was much positive reaction from all corners of the world, including Bernie Sanders[18] and Russell Brand,[19] some critics lambasted the $70K decision. Most notably, Rush Limbaugh who assured his listeners that Gravity Payments would be a case study of how to destroy a successful company.[20]

In May 2015, Price received a stack of letters from 33 sixth-graders at Woodbury Elementary School in Irvine, CA. The letters provided words of encouragement and praise for Price’s decision. He was so moved by the letters that he decided to fly down to Irvine and surprise Ms. Dimitruk and her class. Before he left, he promised to set aside a $1,000 scholarship for each of the kids if they wrote him one letter a year.[21]

In October 2015, Inc. Magazine put Price on the cover with the question, “Is This The Best Boss In America?”. The story described many of the early positive outcomes of the $70K decision - both human and business. It also described some of the unforeseen challenges Gravity has faced.[12]

Awards and recognition

References

  1. 1 2 3 "CEO Dan Price on His Decision to Make Entire Company's Minimum Wage $70K/Year". people.com. 2015-05-11. Retrieved 2015-08-14.
  2. ↑ "Truthdigger of the Week: Gravity Payments CEO Dan Price". truthdig.com. 2015-04-25. Retrieved 2015-08-14.
  3. 1 2 3 "One Company’s New Minimum Wage: $70,000 a Year". NY Times. 2015-04-13. Retrieved 2015-01-21.
  4. ↑ "Gravity Payments CEO Dan Price named ‘Entrepreneur of 2014′ by Entrepreneur Magazine". geekwire.com. 2014-12-17. Retrieved 2015-08-14.
  5. ↑ "Credit him with business savvy". seattlepi.com. 2008-06-22. Retrieved 2015-08-14.
  6. ↑ "Dan Price IMDB". IMDB. Retrieved 26 April 2016.
  7. 1 2 Schnuer, Jenna. "Meet the Winners of Our Entrepreneur of 2014 Awards". Entrepreneur. Entrepreneur. Retrieved 26 April 2016.
  8. 1 2 Schnuer, Jenna. "Meet the Winners of Our Entrepreneur of 2014 Awards". Entrepreneur. Retrieved 3 May 2016.
  9. ↑ Cohen, Patricia. "Praise and Skepticism as One Executive Sets Minimum Wage to $70,000 a Year". New York Times. Retrieved 3 May 2016.
  10. ↑ "High income improves evaluation of life but not emotional well-being". pnas.org. 2010-04-04. Retrieved 2015-08-14.
  11. 1 2 "The $70,000 Minimum Wage Experiment Reveals A Dark Truth". cheatsheet.com. 2015-08-14. Retrieved 2015-08-14.
  12. 1 2 3 Keegan, Paul. "Here's What Really Happened at That Company That Set a $70,000 Minimum Wage". Inc. Retrieved 3 May 2016.
  13. ↑ Cook, John. "This startup just boosted salaries 2 percent to offset the payroll tax hike". Geekwire. Retrieved 3 May 2016.
  14. ↑ Volastro, Anthony. "Some Companies Give Workers Unlimited Vacation". NBC News. Retrieved 3 May 2016.
  15. ↑ Cohen, Patricia. "One Company’s New Minimum Wage: $70,000 a Year". New York Times. Retrieved 3 May 2016.
  16. ↑ Mason, Anthony. "CEO to employees: $70,000 is our new minimum wage". CBS Evening News. Retrieved 3 May 2016.
  17. ↑ "Third & Loom Adopts Dan Price's $70K Minimum Salary". Retrieved 3 May 2016.
  18. ↑ Sanders, Bernie. "Congratulations, Dan Price". Retrieved 3 May 2016.
  19. ↑ Brand, Russell. "Should You Be Paid As Much As Your Boss? Russell Brand The Trews (E303)". Retrieved 3 May 2016.
  20. ↑ Limbaugh, Rush. "CEO Buys Short-Term Love". The Rush Limbaugh Show. Retrieved 3 May 2016.
  21. ↑ Fryer, Joe. "Students Get Surprise Visit From CEO Dan Price Who Took Pay Cut to Raise Salaries". NBC News. Retrieved 3 May 2016.
  22. ↑ http://www.bizjournals.com/seattle/blog/2013/05/final-countdown-for-40-under-40.html?page=2
  23. ↑ Cook, John (June 8, 2010). "President Barack Obama honors 26-year-old Seattle entrepreneur". Puget Sound Business Journal.
  24. ↑ Soper, Taylor (May 10, 2013). "Revealed:The winners of the 2013 GeekWire Awards". GeekWire.com.
  25. ↑ Truzzi, Gianni (November 24, 2013). "Meet the Job Creators". Inc. Magazine.
  26. ↑ Truzzi, Gianni (January 24, 2014). "The 2014 Executive Excellence Awards: Dan Price". Seattle Business Magazine.
  27. ↑ "Gravity Payments CEO Dan Price named ‘Entrepreneur of 2014′ by Entrepreneur Magazine". geekwire.com. 2014-12-17. Retrieved 2015-04-21.

External links

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