Six months after radically raising pay for all its employees, both revenue and profits have doubled at Gravity Payments in Seattle, Washington.
CEO Dan Price announced in April he would cut his own $1.1 million annual salary to help make sure everyone in the company earned at least $70,000 a year. Within a week, he was swamped with new customers and flooded with resumes from people who wanted to work for him.
Half a year later, he’s added ten new positions at his small business to handle all the extra work coming in. Old customers are sticking with him; his customer retention rate has risen from 91% to 95%, which is 37 points better than the national average.
The raises are being phased in over three years — with a current $50,000 minimum wage this year and $10,000 increases in each of the next two. Price’s own pay cut – to the same $70,000 level – is covering most of the transition.
The CEO is investing everything he has into the company. He is convinced that higher productivity from his better-paid employees is going to pay off in the long run, in the form of higher profits.
(WATCH the KING News video of the original announcement below and READ more at Slate) — Photo: KING video
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