Would You Follow Dan Price?
Nothing steams up water cooler talks like salary. One of the most recent debates was Gravity Payments CEO Dan Price’s decision to offer all employees a starting salary of $70k, and reduce his own salary from $1M to $70k. We asked three DC tech leaders for their take on whether it makes sense.
Kristin Muhlner, CEO of newBrandAnalytics
What do you think of Dan Price's decision?
I don’t know Gravity Payments, but my sense is that this is an alternative way for him to implement profit sharing, given that the company is privately held and profitable. Leaders have a broad array of tools at their disposal to close salary gaps and share profits, including benefit programs, 401k matching, bonus programs and option plans. But to arbitrarily say that everyone, irrespective of contribution or skill, should be paid a salary that might be well above market? I’m a capitalist, so no.
Would you consider boosting your company's starting salaries to a set level?
We pay market comparable rates, and we spend a lot of time ensuring that we are compensating our team fairly while creating a fun, inspiring work environment. Our average salary is already above $70k given that we employ a number of highly experienced team members. Establishing a minimum threshold would seem to make it prohibitively expensive to hire recent college grads with great intelligence and energy but less experience.
Matt Caywood, CEO/co-founder of TransitScreen
(Matt is on the right with co-founder Ryan Croft.)
Why is this a good or bad idea?
People are looking to work for organizations that are flat, transparent and honest. This was a good move that helps shift the “center of gravity” in the tech industry.
What do you think of Dan's decision to lower his own salary?
I’m surprised the CEO was taking $1M in direct compensation. He’s the founder also, he should have a substantial chunk of shares.
Should other corporate leaders follow suit?
One of Price’s reasons to have a salary minimum is that employees need a buffer against financial reversals. Employees need a buffer against risk—but so do small startups. Gravity Payments has 100 to 200 employees, and it’s appropriate to consider at that stage.
Brad Heidemann, CEO of Tahzoo
What do you think of Dan Price's decision?
I have to give Dan credit for a disruptive approach to how he runs his company. It speaks volumes to the investment he has in his employees and his confidence that they are a valuable and integral part of his company’s future. At the very least, it’s garnered a lot of attention for the company.
Would you consider boosting your company's salaries to a set level?
It’s an interesting consideration. At Tahzoo, I always strive to hire happy, smart, interesting people who are driven by change.
Should other corporate leaders follow suit?
Every corporate leader needs to evaluate what motivates their company culture. Perhaps a common salary is the right way to go, perhaps it's more about a shared set of values or purpose.
