Dan Price, the Founder of Gravity Payments, gets it. Dee Hock, the founder of VISA International got it. Do you?
“Gets what?” you ask.
When Dee Hock founded VISA International in the early 1970s he created a rule that his pay could be no more than ten times the lowest paid employee in the company. “How could I possibly provide more than ten times the value of any other employee in the company?” was his perspective. This rule remained in place until Hock retired from VISA International in 1985.
Dan Price has just reduced his $1M salary so that he could provide a pay rise to his staff to ensure that the lowest paid staff members at Gravity Payments earn at least US$70k per annum. Why this number? Because it is the number that Price read in an article about happiness that indicated that if people are earning lower than this amount, then any extra money they receive up to US$70k makes a big difference in their lives. So he decided to do something about it. He wants his staff to be happy.
Dee Hock was an explicit practitioner of Servant Leadership. I don’t know whether Dan Price even knows about Servant Leadership, but his behaviour is certainly aligned with Servant Leadership principles. I’m not suggesting that CEOs should be paid the same as everyone else, after all Peter Drucker recommended that CEOs could reasonably earn up to 20 times that of their employees. But the current gap where many CEOs are earning thousands of times what their employees are earning is unbalanced.
Dan Price, kudos to you!