I pause in the short series on the image of God, the grand biblical themes and the purpose of business because I just could not resist this story that broke earlier this week. It is a story that is worth having a conversation with students.
Dan Price, CEO of Gravity Payments, a firm in Seattle, Washington that processes credit card payments, announced a few days ago that he pledges to raise the minimum annual wage of all 120 workers up to $70,000. To offset this increase he is reducing his own salary from something near $1,000,000 down to the minimum $70,000. The implementation will be phased in over a three year period starting by raising everyone’s pay up to a minimum of $50K. A year later the minimum wage will be %60K. The third year the minimum wage will be $70K.
The issue of the disparity in compensation between the top-level executives and front-line employees has been hotly debated for a few decades. Every year, it seems, stories about disgruntled workers and their opinions on CEO pay are published in the media.
The story along with interviews of Mr. Price can be found on several internet sites. Here is one example: http://www.nytimes.com/2015/04/14/business/owner-of-gravity-payments-a-credit-card-processor-is-setting-a-new-minimum-wage-70000-a-year.html
CEOs in some firms make 400 (or more) times what the front-line employees make. One of the arguments in favor of high pay for CEOs is the issue of supply and demand. Market rates reflect the value of the person to the shareholders’ ability to earn cash on their stocks in the future.
- After hearing this story, how interested are you in applying for a job at Gravity Payments?
- What are some of the other arguments to keep CEO pay much higher than that of front-line workers? Are these valid points?
- Is this a good thing for the company?
- Is this a bad thing for the company?
- After the plan is fully phased in, will Mr. Price ever be able to sell his company?
- Should CEOs of other companies do the same as Mr. Price has done?
- What biblical principle may be at work in this story?
- Is there an opposite biblical principle that is in jeopardy as Mr. Price implements his plan?