Gravity Payments, Inc.: Setting the World or Itself on Fire?

Abstract

Dan Price, the founder and CEO of Gravity Payments, Inc., decided to give his employees raises—big raises. He announced that all employees would make a minimum of $70,000 (phased in over a three-year period). Some were only making $35,000 at the time, and the change would effectively double their salaries. The employees were ecstatic and Price made national news. In addition, Price decided to reduce his nearly million-dollar salary to just $70,000 and use a significant portion of the company’s anticipated $2.2 million profit per year to pay for the raises. The case poses questions about pay equity, equality and justice, employee motivation and the impact of internal company decisions on stakeholders.