In 2015, a young CEO from Seattle made a decision that split the business world in two. Dan Price, founder of the credit card processing company Gravity Payments, announced he would slash his own salary from $1.1 million to $70,000 a year. At the same time, he set $70,000 as the new minimum wage for every employee at his company, from customer service reps to senior staff.
Critics called it reckless. Some called it socialism dressed up as generosity. Wall Street commentators predicted the company would collapse within a year. Ten years on, the story of what actually happened has become one of the most cited case studies in modern business leadership – and one of the messiest.
A Spreadsheet That Changed Everything
Price didn’t make the decision on a whim. By his own account, the moment of clarity came when he studied a spreadsheet of his employees’ salaries and realized how many of them were struggling despite working full-time. “I had a hard time understanding how a measly $200 could disrupt someone’s life,” he later wrote, describing his own disconnect from his staff’s financial reality before the change.
What he found was stark. Some employees were sleeping on friends’ couches. Others were commuting more than an hour each way because they couldn’t afford to live closer to work. Some had delayed starting families simply because they couldn’t afford it.
In April 2015, Price gathered his roughly 120-person team and announced the new company minimum wage: $70,000. To fund it, he cut his own pay by nearly a million dollars and redirected the bulk of the company’s profits toward employee salaries.
The Backlash Was Immediate
The story went viral within days, generating hundreds of millions of social media interactions in its first two weeks. But not all the attention was positive.
Fox News commentator Rush Limbaugh predicted the experiment would become “a case study in MBA programs on how socialism does not work.” Business pundits warned that removing the incentive to earn a promotion would tank productivity. Some economists said the pay structure was financially unsustainable.
The criticism wasn’t only external. Price’s own brother and Gravity co-founder, Lucas Price, sued him later that year, alleging Dan had used the company for his own publicity at the expense of shareholders. Dan ultimately prevailed in court in 2016.
What the Numbers Actually Showed
Contrary to the predictions, Gravity Payments didn’t fall apart. In the years following the announcement, the company reported:
- Revenue climbing sharply, with growth reported at roughly 650% over the following decade
- Employee turnover falling from around 22% to single digits
- Customer retention rising from 91% to 95%
- Job applications increasing roughly tenfold
- Employee productivity, measured by revenue per staff member, roughly doubling
Employees described tangible changes in their lives. Some bought their first homes. Others paid off long-standing debt or finally felt secure enough to start a family. Gravity’s own reporting later noted that a third of the employees who were there in 2015 were still with the company a decade later – unusually high retention for a small business.
Harvard Business School eventually turned the $70K decision into a formal case study, and Price became a sought-after speaker on leadership and workplace pay.
A More Complicated Legacy
The story doesn’t end as a clean underdog triumph. In 2022, Dan Price resigned as CEO of Gravity Payments after facing allegations of sexual assault, which he denied and which were later dismissed. Reporting by The Seattle Times and The New York Times also raised questions about Price’s management style, with former employees describing a workplace culture that didn’t always match his public image as a compassionate boss.
Tammi Kroll, the company’s longtime chief operating officer, took over as CEO after Price’s departure. Notably, the $70,000 minimum wage policy itself survived the leadership change and has since increased. As of Gravity’s own 10-year retrospective, the company’s baseline pay had risen further, with profit-sharing bonuses pushing total minimum compensation above $88,000 in recent years.
The Bigger Question
Price’s experiment never sparked the wave of copycat corporate policy some expected. A decade later, the gap between CEO and worker pay across corporate America remains as wide as ever, and few companies have followed Gravity’s model.
What the story does offer is a real-world test of an argument usually confined to economics textbooks: that paying people enough to live without constant financial stress can make a business more resilient, not less. Gravity’s results suggest that argument has merit, even if the man behind the experiment turned out to be far more complicated than the headline.
