Photo by: Gravity Payments, CC BY-SA 3.0, via Wikimedia Commons
In April 2015, Dan Price, CEO of Gravity Payments, announced that the company would institute a $70,000 minimum annual salary by 2017. The salary would be phased in over three years and would be largely funded by company profits and by Price’s own pay cut, which took him from a $1M annual salary down to $70,000.
Why $70,000?
Price chose this number based on research by Nobel Prize winners Daniel Kahneman and Angus Deaton, who conducted research in 2010 that suggested that emotional well-being increases with income up to approximately $75,000 annually. Price saw an opportunity to give his employees better opportunities for quality of life and housing while making an effort to eliminate financial stress.
The move was both praised and ridiculed at the time, but more than anything, Price hoped that his own example might create a trend in which the gap between CEO and frontline employee salary was not so egregious as it was at that time (and still is). On that point, CEO income is on average 281 times more than the median employee’s. Does a CEO create anywhere near 281 times more value? There isn’t any research to support that idea.
What Happened Next?
It’s been over a decade since Gravity made that change, so there’s been plenty of time to see the effects. They are impressive at every level.
Employees
Price had made the changes to improve the quality of life of his team members. Some metrics that matter:
- 75 marriages, a 20x increase
- 85 houses purchased, a 12x increase
- 115 children born or adopted, a 5x increase
With stats like that, it’s unsurprising that Gravity also received ten times more job applicants than before, and watched their turnover go from 22% in 2015 to 6% in 2025.
Headcount has roughly doubled; Gravity now has over 200 full-time employees.
Customers
Some argued that Gravity’s clients would leave, being unwilling to fund a “social experiment.” Instead, the total number of businesses using Gravity’s payment processor services doubled. They also retain their customers two times longer than the industry average.
They’ve added a new business line, providing financing for over 1,000 businesses.
They’ve also stayed 100% locally owned for the entire duration of the business, while competitors often get sold every four years on average.
Business Health
How about the financials? Revenue has gone up 650% since 2015. Gravity has been profitable every year and has $0 debt.
But What About Covid?
If anything could have rained on this parade, it would have been the pandemic. That’s what killed Danny Meyer’s no-tipping “hospitality pricing.” But the culture that had been cultivated at Gravity since 2015 weathered that storm too.
Revenue went down 55% in the early weeks of the pandemic as people stopped going to the businesses that Gravity processed payments for. The company was losing $1.5M a month. They had no more than six months of cash on hand to weather the storm, and this was disclosed to all team members on a company-wide Zoom on March 19, 2020.
Without being prompted, employees suggested temporary pay cuts until revenues recovered. A startling 98% of the company volunteered to cut their pay, with the average employee taking a 20% cut.
By July of that year, revenue had recovered and even better, Gravity made whole all employees who had taken a cut during that time.
In 2020 the company faced no layoffs, no price increases, and made a profit.
Doubling Down
Despite not starting a general business trend, Gravity isn’t waiting for permission to continue their pioneering ways:
- In 2017, they made an acquisition and folded that team into Gravity, tripling the minimum wage for 49 staff members.
- In 2022, they raised the minimum wage to $80,000 per year.
- In 2023, they added a profit-sharing program. In 2024 employees took home an extra $8000 each from the program.
If you’re interested in the math behind that program, Gravity takes the annual growth rate and multiples it by actual profit. That number is then divided by the number of employees. Those who have been there 4-6 years get an extra 10%, 7-9 years an extra 20%, and so on.
Gravity’s tagline for this program? We think employees deserve to share in our success because they are the reason for our success.
But Wait, There’s More!
Gravity went remote-first starting in 2020, but still maintains in-office options in Seattle, Boise, and Honolulu.
They also added:
- An HSA plan with matching up to half of the elected contribution, with 82% of employees getting maximum match
- 12 weeks of paid leave for all new parents, male and female
- 10 days paid leave for every new hire
- Flexible scheduling
The moral of the story for us at Apex is a reminder that all of us should get from time to time: a great joy and benefit out of building a business, like building a family, is to create a universe where your rules and values apply. It’s encouraging to see companies like Gravity building a positive universe of work and contribution.