A CEO who took a pay cut to increase his employee's minimum wage to $70,000 has explained how it's changed him and his team.
Dan Price, the CEO of Gravity Payments, a credit card processing and financial services company, decided to reduce his own salary by 90% in 2015 so that his employees could have a minimum salary of $70,000, per BBC.
Now, six years on from the decision which made headlines around the world, Price has taken to Twitter to reflect on what was a life-changing decision for him and his company.
He wrote on July 29: "I was a bad CEO. 7 years ago, I found a McDonald's training handbook on the desk of an employee named Rosita. Turns out she was training to become a manager there because she couldn't survive on the income I paid here. I called her to my office."
Price continued: "She was hiding the McD's handbook and thought her 2nd job would get her fired. What kind of culture had I created? Scarcity and fear. Rosita is a college grad but was making $30k a year. She'd leave our job at 5 and secretly work 5:30-11 every weeknight at McD's for 1.5 years."
He went on to explain that prior to getting the job at McDonald's, Rosita would use foodbanks because she simply couldn't afford to live in an expensive city and pay off her student debt on her $30K wage.
Until then, Price had been completely out of touch with this reality.
The CEO explained that Rosita told him that she'd need a $10K raise at her current job in order to stop working at McDonald's, so that's exactly what he gave her, and it wasn't long before this proved to be a worthwhile investment.
He wrote: "She quit the McD's job, moved out of her crappy apartment and used the free time to see her friends more. As her mental health improved, so did her work performance."
As a result of this experience, Price decided to increase the minimum wage for all of his staff to $70K.
He wrote: "Since then our productivity and revenue tripled. 10x more staff bought homes and had babies."
Price said that looking back on the experience, "the biggest thing I learned? Listen to your damn employees. Never assume you know what's going on - never make top-down decisions without their input.
"We hold weekly company meetings with everyone invited and have multiple reps from each team vote on our priorities each year."
So, if you're a CEO who just so happens to be reading, you might want to take a leaf out of Price's book. Your employees (and your bankbook!) will most likely thank you in the long run.
To put the current wage difference between CEOs and general employees into context, a report by the Economic Policy Institute found that CEOs earn, on average, 271 times the nearly $58,000 annual average salary of American workers.