As much as religion and politics are taboo topics to talk about, so is the conversation on money. Compensation is an uncomfortable issue for anyone to discuss, but even with that said, income inequality, the pay gap, gender inequity, and the disparity between top level executives and the average worker are dominating headlines everywhere and trickling into HR inboxes. Wayne Guay, a professor of accounting at Wharton said, “Companies are dealing with two key issues: One, pay inequity, and two, the big gap between what senior executives earn versus average workers.”
Every week the Truthdig editorial staff selects a Truthdigger of the Week, a group or person worthy of recognition for speaking truth to power, breaking the story or blowing the whistle. It is not a lifetime achievement award. Rather, we’re looking for newsmakers whose actions in a given week are worth celebrating.
We’ve all heard the figures: Chief executives of U.S. businesses take home nearly 300 times as much money as the people who toil beneath them. It’s a reality that stunts the development of many tens of millions of Americans and makes both material and emotional aspects of life harder. Thousands of workers have mobilized a struggle for a higher minimum wage, with some success. But some luckier workers—such as employees of the Seattle-based payments processing firm Gravity Payments—don’t have to.
This month, Dan Price, the 29-year-old founder of Gravity Payments, announced that he would cut his salary by roughly 90 percent from nearly $1 million to $70,000 per year and raise the salaries of his lowest-paid employees to that same level. Members of his 120-person staff were stunned. The paychecks of some 70 of them will grow over the three-year period during which the change is set to go into effect, and 30 of them will earn twice what they do now. The average annual salary at the company is $48,000.
Price said his own salary would shift back toward the $1 million mark in the years ahead in proportion to Gravity’s growing revenue. He began the company in his dorm room at Seattle Pacific University a few years after he learned he could process credit card payments more cheaply and with better service than existing large corporations.
Honorable remarks by Price on his decision were reported in The New York Times (the article included a video recording of Price making the announcement to his staff): “The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd.” The Times reported that the main extravagances enjoyed by Price, who grew up in rural Idaho, are snowboarding and picking up the bar bill and that he drives a 12-year-old Audi, obtained in a barter arrangement with the local dealer.