Dan Price is the owner of Gravity Payments, a Seattle-based credit card company that he founded in 2004. In 2014, the company processed more than $65 billion of credit card transactions for more than 12,000 small and medium-sized businesses. In April 2015, thirty-year-old Price announced to his staff that everyone’s salary would rise to a minimum of $70,000, even the lowest-paid employee. Furthermore, his own salary of $1 million would be reduced to $70,000.Price said that he was motivated because of research by Deaton and Kahneman, the Nobel Prize–winning psychologist, who found that a $75,000 salary made an enormous difference to an employee’s emotional well-being. Furthermore, he felt that that “income inequality has been racing in the wrong direction. I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.

Questions

1. Do you think that Dan Price’s decision to raise the minimum salary to $70,000 represented ethical leadership?  

2. Do you think that Price should have arbitrarily increased the minimum salary to $70,000?

3. Should he have increased everyone’s salary, even those who were earning more than $70,000?

4. Do you think that this plan will motivate the Gravity employees to work harder?

5. Should Price have consulted with his customers and his employees before he made the decision to increase the minimum salary to $70,000?