Remember the CEO Who Announced a Minimum Salary of $70,000 Back in 2015?
Still not broke
In 2015, Dan Price announced the minimum wage at Gravity Inc would be $70,000. He made this decision after an eye-opening conversation with a friend that was making $50,000 a year. Dan got mad, especially at himself. He had employees that he valued as partners who were making less than that.
Why $70,000?
Price remembered a study declaring people feel significantly more miserable when they earn less than $70,000 a year. At Gravity Inc, a new employee earned around $35,000 a year. So Price decided to find a way to pay staff members a minimum annual salary of $70,000.
The decision took two years to implement. Once it was done, 30 workers had doubled their income, and another 40 employees received significant pay raises. No one was fired, and no manager’s wage was reduced. The exception was Price. His salary dropped from $1.1 million to $70,000.
The new policy drew a lot of criticism from inside and outside the company. Price was accused of giving free gifts and harming the work ethic. Conservative journalist Rush Limbaugh said, “I hope this company is a case study in MBA programs on how socialism does not work because it’s gonna fail.”
