Gravity Payments Company Research

Document Type:Essay

Subject Area:Management

Document 1

Gravity Payments has over 100 employees. Dan Price is the CEO of Gravity Payments. The ownership structure of Gravity Payments is by Dan Price owning about 67% of the shares and his brother Lucas Price holding about 33% shares of the company (Burton, 2008). Gravity Payments board of directors consist of Dan Price and Lucas Price. An announcement by Gravity Payment CEO back in 2015 caused a furor when he said that he plans to raise the minimum wage of the company’s employees to $ 70,000 within the next three years (Patricia, 2015). This other shareholder could not stand this development and as such was compelling the courts to ask the CEO of Gravity Payments to buy his shares altogether or on the extreme side dissolve the company.

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However, Dan Price the majority shareholder of Gravity Payments did not share the same views as the other shareholder. In Dan Price’s defense, the profit of Gravity Payments increased at a higher rate as compared to that of the wage growth rate and as such there claims of the minority shareholder cannot hold. He insisted that this move would ensure improved productivity from the employees that translated to increased profit by the firm. He based his increase in minimum wage to data from the company as well when in 2012 he gave out a 20% percent increase in salary and the profits increased by a wider margin as compared to the previous year. Gravity Payments board or management after effecting the minimum pay policy will need to ensure that the strategy is sustainable in the end.

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Therefore, there is the need for the CEO and his team to set up a way to provide the financing of the policy does not run the company down. The pay cut by the CEO is one way to ensure sustainability. Though so far the performance of Gravity Payments outweighs the cost incurred by raising the minimum wage, the company can implement other strategies to ensure even performs better over time. One approach that Gravity Payment can achieve is by the company emphasizing on value creation as well as protecting the current value of the company. The management needs to take into account teaching the leaders to assist in raising worker commitment, occupation arrangement, a sense of drive, and the link concerning individual morals and organization’s primary standards in teams.

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A team, which functions in a composed manner to achieve a joint objective instead of emphasizing on individual efforts or preservation, is more probable to attain the organization’s goals. Eventually, the CEO will come off as a noble individual as he set up a solid foundation on teamwork in the organization. It will form a significant and touching story, and this will lead to other talks concerning the CEO reward and minimum reward. The minimum to which the CEO can reduce his or her salary functions characteristically in a manner that the salaries of other business leaders such as Steve Jobs, the Google head honchos and Mark Zuckerberg because it drives the wages to a similar range with other workers.

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If he had just spoken to his brother and the other higher ups with the company, he would not be facing as many problems as he is. They could have come up with a plan. They could have weighed the pros and cons together. He would not have employees quitting, customer any not be backing out and his brother would not have a lawsuit against him. Alternatives to what he did would be to send out a memo reversing what he did and apologizing. This alternative is the best way to go about the situation because he will not lose any more employees or customers. I think that doing this will get the people that he lost back if he cared.

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