DAN PRICE
GRAVITY PAYMENTS
CEO & CO-FOUNDER
AGENDA
1. Introduction
2. Main Point Why Dan Price and His Salary Announcement
3. Dan Price and Four Job Responsibilities of CEOs
4. Dan Price and Human Relations Management
5. Backlash and Negatives of His Announcement
6. Positives of His Announcement
7. Conclusion
8. References
INTRODUCTION
Co-founded Gravity Payments, a credit card processing and financial services
company, in 2004
Co-founded with brother Lucas
Currently CEO
In 2008 Gravity Payments became the biggest credit card processor in Washington
State
Has 12,000 clients country wide
120 Employees
MAIN POINT WHY DAN PRICE
Raised minimum salary of employees to 70,000 dollars per year
Lowest before this point was 34,000 dollars
Why?
Read a study about happiness which stated that an income of 75,000 can make a large
difference in someone's well being
Had a conversation with a friend who earned a lower income
His goal was to pay everyone enough so they could have a good standard of living
and be able to afford to live within a few minutes of their work place
DAN PRICE AND FOUR JOB
RESPONSIBILITIES OF CEOS
1. Change
Salary increase for all employees changes traditional business and salary structure
2. Commitment
Committed to employees salary increase over three year period and significantly lowered
personal salary
Preached Main Street capitalism, won local business awards, passionately supported
community volunteer projects, and met President Obama during National Small Business
Week
DAN PRICE AND JOB RESPONSIBILITIES OF
CEOS CONTD
3.
4.
Culture
Created such a positive culture at Gravity that some took pay cuts to work there
One employee decided to forgo applying to Harvard Business School
Environment
Knowledge of the state of the work force and wages in Washington State
Personally knows many of his clients and still regularly networks with them
DAN PRICE AND HUMAN RELATIONS
MANAGEMENT
Dan Prices management style heavily reflects principals of Human Relations
Management
Focus management on people
Peoples needs are important to understanding that their efforts motivation and
performance are effected by the work they do and their relationships with those with
whom they work
Treating workers well
Dan Prices management especially reflects the principles of Elton Mayo in his
Hawthorne Study
Says employees function better with increased attention from management and when
working in cohesive groups
HOW HE FITS THIS ROLE
Gives unlimited paid time off
Employees will be happier and less stressed
Company sponsored outings and meals for employees
Improve group cohesion and happiness
Increased employee pay by 2% in response to 2% payroll tax increase applied to
those earning under $100,000 in 2013
Shows Mr. Price is informed and cares about his employees finances
Lowered his own salary from 1,000,000 to 70,000 a year to finance the wage
increase
Is even referenced by employees as very caring
BACKLASH AND NEGATIVES
Lost some longstanding employees because of flat payment structure
Some employees felt undervalued
Profits are lower than expected
Lost clients
Lawsuit from brother Lucas for managerial differences (Lucas owned 30% share)
Branded as a communist or socialist by some
Two weeks after the salary raise announcement Gravity co-founder Lucas Price filed a
lawsuit citing long standing differences
Lucas still owns a 30% share in Gravity
Put valued employees or hard working ones on part with less motivated employees
POSITIVES
Media attention
Some believe this was intentional
New clients
Accounts wont pay for another year however
By June of 2015, four months after the minimum salary announcement, 950 new clients
had signed on with Gravity.
Employees know how caring he is and are willing to put in the work for him
Former Financial planner Maisey McMaster put in 80 hour weeks leveling media and
inquiries after the announcement
CONCLUSION
Would you want to work for Gravity?
REFERENCES
All Points West, C. N. (2015, April 15). Gravity Payments CEO Dan Price of Seattle
cuts his salary to boost company's minimum wage to $70k. Retrieved from
cbcnews: http://www.cbc.ca/news/canada/british-columbia/gravity-payments-ceodan-price-of-seattle-cuts-his-salary-to-boost-company-s-minimum-wage-to-70k1.3035051
Chuck Williams, T. C. (2015). MGMT. Toronto: Nelson Education.
Cohen, P. (2015, July 31). A Company Copes With Backlash Against the Raise That
Roared. Retrieved from nytimes.com:
http://www.nytimes.com/2015/08/02/business/a-company-copes-with-backlashagainst-the-raise-that-roared.html?_r=2
