Equal communication: how one CEO equates his salary with the salary of his colleagues and increases the loyalty of employees

Recently, in the Wirex blockchain service team, we paid attention to the TODAY publication material, which tells about the unusual initiative of Dan Price, co-founder and CEO of the processing company Gravity Payments.

About one and a half years have passed since Price announced plans to cut his salary from almost a million dollars a year to $ 70,000 a year. At the same level, he set the minimum payment for each employee in his company engaged in processing credit cards. Such a move was somewhat shocked by the western business community, and Price, 32, was the center of attention.

Since then, much has changed. The criticism inevitably came to replace the initial wave of approval: “Wasn’t it all a clever publicity stunt?” Price insists that was not. However, an unusual experiment, or at least a deliberate business move, obviously took place.

“You shouldn't think that I just gave my money to charity, not hoping to get it back,” he told TODAY. “I look at it as a long-term investment.”

"Happy" office

Since raising salaries at Seattle-based Gravity Payments, a real baby boom has started, turnover has noticeably decreased and staff satisfaction has increased (which is measured using an online questionnaire). Many employees have reduced travel time to work, with additional funds they moved closer to the office.

The graph shows that employee turnover is at a minimum in the entire history of the company.

Price himself had to abandon certain things in order to meet the costs of a new salary, although decisions were made rather under the influence of emotions, and not because of real need. In the summer, he rents his house through Airbnb for the sake of extra money, spending the night in a guest room with friends.

“It may seem to you that I am sacrificing something,” he says. - But for me it is more fun. I like".

Temporary pay cut

Price likes to tell the obvious: none of the changes in life associated with a sharp decline in income puts him in a difficult position.

Let Price and become the initiator of "pay equity", it does not mean that he will always receive 70,000 dollars a year. This was not the question.

“When I made my application, I said that I would return my original salary as soon as the company's profit rises to the previous level,” says Price. “At that moment, it seemed to me that we were taking a big step back.”

Employees at Gravity Payments Seattle Office

But no step back happened. On the contrary, sales rose sharply after a fateful statement, and Gravity Payments gets new customers at an unprecedented pace. For the year, the profit almost doubled - from $ 3.5 million in 2014 to $ 6.5 in 2015. Therefore, Price is now reviewing the criteria for returning to the previous salary and trying to understand how much he should receive.

Discord between brothers: “I love my brother and, I hope, he loves me”

Price’s millionth salary, which he once received and most likely will receive again, has always been a subject for discussion, even during a storm of enthusiasm immediately after the decision to impose a minimum wage in the company. To some extent this can be explained by litigation with his brother, Lucas Price. Dan and Lucas together founded Gravity Payments in 2004. Dan Price recently won a case against Lukas: his brother accused Dan of unjustified overstatement and the misuse of corporate funds for personal gain.

Even despite the victory in the court, Price seems upset because of an argument with his brother.

“I hate that we have a rift in relationships,” he says. “We have work to do here, but I love my brother and, I hope, he loves me.”

The more employees earn, the more money they invest in retirement plans, they say in the company.

In his post on Facebook, written after the announcement of the court decision, Price writes the following: “I am glad that the process is over and now I can put all my time and energy back in support of our clients, the community and the implementation of the team mission - we must change understanding business goals. ”

Regarding the results of the new payroll program, which is still in the process of implementation, Price has repeatedly stressed that it concerns not only money.

“The easiest way to concentrate is on the money issue, because these are understandable things, it is easy to write about it. However, the most important thing that we received was a feeling of independence and freedom, this is what gives us an increase in pay, ”says Price.

However, for some employees, money is the main thing.

Take, for example, Alissa O'Neill. It can be called the most famous of the successful employees of Gravity Payments. Before the salary increase, the 22-year-old single mother, a support service employee, earned $ 35,000 a year. Now she receives about 60,000, and her salary will rise to 70,000 at the end of 2017, when the new program will be fully implemented.

Additional earnings allowed her to move closer to work, to the area better. And most recently, she was able to take her son to Disneyland on his fifth anniversary.

“I no longer have to think about money every day — check the savings account, see where I can save an extra dollar,” says Alyssa O'Neill. - Now I can live a little freer. Not to be scattered about money left and right, of course, but just allow yourself a little more. ”

With the growth of salaries, more employees began to invest in pension programs.

Why did the initiative of Dan Price to introduce the 70,000th minimum wage caused such a big response? Some see this act as an extraordinary HR move, others only a PR trick. In any case, by its public action CEO Gravity Payments is likely to increase the loyalty of its employees, but the question is - for how long? After all, some studies suggest the opposite effect. TED speaker Daniel Pink presented an interesting report on employee motivation. It turns out that after a certain level, a salary increase has a negative effect on productivity in specialties that require creative thinking:

Continue to follow the updates of the blog Fintech-start-up Wirex , providing payment and money transfer services without banking intermediation, and stay up to date with the most interesting events of the global payment industry.