Yesterday, I read an article that was causing quite the buzz in the media. You may have read it as well. Dan Price, the young CEO of Gravity Payments, cut his annual salary from one million dollars to $70,000/year and raised the minimum salary at his company to $70,000/year. For perspective, Gravity Payments is a 120-person company in Seattle, Washington and this change will be phased in over two years.
Price was concerned about income equality and decided to do something about it. He said he arrived at the $70,000/year figure based on a 2010 Princeton University study that happiness was impacted up to $70,000 or $75,000/year. The study claims that earnings in excess of that figure were helpful to buy luxuries, but didn’t increase the “happiness quotient” much at all. The connection between money and happiness is (as we say in Texas) A Whole-Nother blog post…
Price also knew that his employees were at times distracted by their struggles to make ends meet and wanted to see what they could do as a company if their financial issues are eased. Price’s salary will remain at $70,000/year until the company exceeds a $2.2 million dollar profit target - the amount of profit in 2014. An interesting social (and financial) experiment, I’d say.
I would also say that I couldn’t find a better example of servant leadership. According to some studies, the average American CEO earns nearly 350 times the salary of their average employee. This executive, who drives a 12-year old car by the way, has certainly made this decision based on his belief that this will positively impact the company in the long term. Price isn’t running a non-profit organization. And there are certainly benefits from the media attention. However, I am not sure how many CEOs would have done this for the media attention even if they thought, in the long term, it would help grow the company. It requires sacrifice and risk and a personal motivation beyond the market.
What I didn’t expect when reading the internet comments in response to this story were remarks about how now everyone will think they are owed something; how you have to pay your dues; how you have to work for years to deserve that pay; and that young people will feel entitled. You get the idea. People were outraged by this man’s generosity. And I do believe it is generosity and not a stunt.
Those negative reactions immediately reminded me of my very favorite Gospel parable – the parable of the vineyard workers. You may recall that the vineyard owner pays everyone the same amount at the end of the day. The workers who started towards the end of the day received the same amount as the workers who started in the early morning. The morning workers were outraged by this man’s generosity. Dan Price has provided a concrete, real-life example of Jesus’ hypothetical illustration. Obviously, Jesus was not using this to teach us about the business world but the application is vivid.
This parable informed my professional career for years. It became my personal philosophy: if I accepted a job offer for a certain amount of money because I believed it fair compensation for the work I was being asked to perform, I made no comparisons to others in similar positions later. This only leads to misery. This extended to others receiving perq’s or perhaps working fewer hours than I was, etc. If you have worked with me, you may have been counseled on this point and not known that I was pulling from the Bible to coach you. This philosophy breeds gratitude.
For some years, I had a painting of a vineyard hanging in my office. Behind it was the parable scripture on a piece of paper. If anyone asked me about the art, it was an opportunity to share my philosophy and what the painting meant to me. I work from home most days and don’t have a place to hang it but a photo is posted here today.
I said earlier that Jesus was not trying to teach us about the business world. However, I think there are many lessons in the parable of the vineyard for us. Does applying this parable to the business world diminish its message? I don’t think so. If God created the entire world and everything in it, I wonder if He considers any of it as “the business world” or “secular.” If we see the sacred as separate from the secular, how can we fully live out the purpose that God has for each for us in His World?