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How PayPal CEO Dan Schulman is leading a more inclusive way forward

He spent decades running with Wall Street’s wolves. Now he’s rethinking capitalism.

How PayPal CEO Dan Schulman is leading a more inclusive way forward
[Photo: Guerin Blask]

Amid the sea of silk ties, charcoal suits, and glinting cuff links at the Museum of American Finance’s annual gala, PayPal president and CEO Dan Schulman is an easy mark. He’s wearing jeans, for one thing. His shoulders are slouched. And his wavy brown hair could use a trim. Those who know him—or those who have benefited from the nearly 200% rise in PayPal’s stock price since the 2015 spinout from eBay that Schulman led—dodge trays of hors d’oeuvres and watermelon-­pink champagne cocktails to shake his hand. Those who don’t, raise their eyebrows.

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“Why is he wearing those jeans?” a woman seated at a table of Citi employees whisper-hisses to a companion.

Schulman’s work uniform hasn’t always been light-wash denim and beat-up cowboy boots (he owns three pairs, all made of ostrich). For his first job after college, an entry-level role at one of AT&T’s regional Ma Bells in 1981, he was told to buy a suit—and dutifully returned to work the next day sporting one made of brown polyester. Gradually, as he built a career as a telecom salesman, he developed a C-suite wardrobe to match, including the shimmering gold tie he wore to the New York Stock Exchange in 2007 to ring in Virgin Mobile USA’s IPO. But by the time Schulman arrived at American Express, in 2010, he’d had enough, and fully embraced jeans as a signal of his counter (corporate) culture tendencies.

Schulman is being honored this February night—just weeks before the coronavirus pandemic begins overtaking New York—with the museum’s Schwab Award for Financial Innovation. As attendees of the event, being held at Cipriani Wall Street in lower Manhattan, tuck into their prime filets of beef and leek-wrapped string beans, he steps onstage to receive his framed certificate. Corinthian columns befitting a temple of free enterprise, bathed in neon-green spotlights, seem to float in the darkness above him.

“If you look at the state of our country today, it’s clear that capitalism needs an upgrade,” Schulman says, speaking without notes and getting right to the point. A former quarterback, he leans forward over the lectern as if delivering some tough love to the team at half-time, and lays out the facts: 185 million Americans suffering from financial distress, a generation that believes it will be worse off than the prior one, anti-­establishment candidates gaining in popularity on the right and the left. “People don’t believe that the system is working for them,” he says, as the silverware clatter quiets. “For democracy to flourish, you need to rise above your own self-interest. But how can you rise above your own self-interest when you are struggling to make ends meet every day?” The solution, he argues, is for business leaders, like those in the room, to “stand for more than just making money” on behalf of shareholders. They must stand for serving “multiple stakeholders, whether they be our employees, our customers, the environment, [or] the communities that we serve.” In parting, Schulman implores the Wall Street leaders to use their power for good: “Take a moral stance.”

Schulman is not the only titan in corporate America suggesting that companies should do more than maximize shareholder returns. There are now more than 3,000 B Corporations legally bound to balance purpose and profit, and last year 181 CEO members of the influential Business Roundtable asserted a “fundamental commitment to all of our stakeholders.” But Schulman is arguably the most comfortable of his Fortune 500 peers with discussing abstract questions of corporate governance in human-scale moral terms. He shares PayPal’s wealth with a range of stakeholders because it’s the right thing to do—or, as he likes to say, because it’s in keeping with “red, white, and blue values.” Over the past two decades, he has become a leading advocate for what he calls “reverse Friedmanism.” The late economist Milton Friedman famously wrote in 1970 that those who lead with a social conscience “are unwitting puppets of the intellectual forces that have been undermining the basis of a free society.” Friedman allowed that an executive may have a conscience as relates to “his feelings of charity, his church, his clubs, his city, his country,” but argued that those sentiments have no place in corporate boardrooms. For a generation of CEOs—Schulman’s generation—Friedman’s views are sacrosanct. Though Schulman’s career has never quite fit Friedman’s mold, his success at PayPal has for the first time given him a platform for openly challenging it.

But Schulman has done more than talk about an ethical version of capitalism that serves all stakeholders; he has followed his own advice. Last October, for example, PayPal announced that it was increasing wages and lowering the cost of benefits programs so that every employee on its payroll could become more financially secure. The initiative, he tells Fast Company, cost the company tens of millions of dollars. A less adept politician might have struggled to sell the idea to shareholders, but Schulman met with little resistance. No wonder prominent Democrats have recruited him to run for office in years past, and may do so again. (More on that later.)

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The next award of the evening goes to Morgan Stanley chairman and CEO James Gorman. Dressed like Park Avenue royalty in an expertly tailored suit, he peppers his acceptance speech with childhood anecdotes and silver-tongued charm. But Gorman’s message amounts to a call for restraint, and a rejoinder to Schulman’s. “Our role is to be conduits of capital,” Gorman says.

As slices of chocolate cake with Chantilly cream appear, delivered by a silent army of servers, a projection screen begins to display a steady stream of $1,000-plus commitments to the museum. It’s a Monday night, and it’s getting late. By the time Anthony and Deidre Scaramucci pledge their $5,181, Schulman’s front-row seat is empty.

WATCH: PayPal is trying to help everyone—including their employees—become financially healthier


Growing up in New Jersey, Schulman seemed destined for all-American success. He was the captain of three sports teams at Princeton High School, and a beloved local swim instructor. Despite middling grades, which fueled an initial string of college rejections, he won a late acceptance to study economics at Middlebury College, in Vermont, starting in the spring semester. To the outside world, at least, his early life was one of popularity and privilege.

At home, however, Schulman’s parents lived by a set of values that set the family apart. His mother, a civil rights activist, brought Schulman to a protest on the National Mall in Washington in his baby carriage; his father, half-jokingly, wondered whether their firstborn would become the youngest person ever to have an FBI file. Schulman’s father, too, took risks to stand up for racial justice. When one of his direct reports, based in Mississippi, was fired for drinking from the wrong water fountain, the elder Schulman, a chemical engineer, traveled from New Jersey to the company plant in Pascagoula to argue for the employee’s reinstatement. “I remember my mom telling me just how nervous she was about it,” Schulman says. “These things take courage, and courage comes from believing something.”

One summer during his college years, Schulman traveled with friends to Washington, D.C., to attend a march in support of ratifying the Equal Rights Amendment, which drew 100,000 people—including his mother. They ran into one another on the side of the road, where she was resting in the 90-degree heat. She was happily surprised to see him. “Of course I’m here,” he recalls telling her.

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Schulman, now 62, didn’t see a disconnect between the values he was raised to follow and a career in business. “If you wanted to take care of yourself, you were going to go work,” he says of his mindset. “There was this ad that I saw that said, ‘Be an account executive. It’s like the quarterback of the sales team.’ ” So the former quarterback went off to AT&T, where a willingness to log long hours caught the attention of his managers. At one point, while he was immersed in an assignment to revamp AT&T’s advertising strategy, Schulman’s boss babysat his daughter so that the rising star could work late and perfect his pitch. (Schulman’s wife, a professor of English, was also working.) By 1998, he was head of AT&T’s consumer markets business, running a multibillion-­dollar P&L and reporting to the CEO.

But Schulman wanted out. Following the sudden death of his younger sister, who suffered a brain aneurysm at age 20, he felt the need to “live life as fully” as he could. Moreover, he began to question the dominant telecom business model, which was based on charging for minutes of call time per month. “You’d either have overage charges or end up paying a lot more than you needed per minute,” he says. “It wasn’t a great customer experience, but the industry was profiting from this inefficiency.” He took a job at Priceline­­­­.com, where he stayed for two years, and then went to Virgin, where founder and serial entrepreneur Richard Branson was looking for a CEO to launch a U.S. version of the company’s prepaid mobile phone service.

At Virgin, Schulman had permission to break the rules—a Branson specialty. Starting in 2001, the two spent hours discussing ways for corporations to be socially responsible. “We were a bit more formulaic then, because it was so new,” Schulman says. (B Corporation certifier B Lab, for example, was not founded until 2006.) “Do we set up specific parts of the organization to give back? Do we take 1% of our profits, and give that?”

Eventually, Schulman landed on the idea of serving homeless youth through a program he called Re*Generation, as a way to echo the brand’s connection with young people. To better understand the issue, he grew a beard and spent 24 hours living on the street in New York City. “If you haven’t begged for money before, and seen how invisible you really are, you don’t get it,” he says. Grasping something intellectually, he believes, is only ever “40% of the story.”

Even more fundamentally, Virgin Mobile presented Schulman with an opportunity to build a profitable business model that aligned with his values. “Rich and I talked all the time about why people fire companies,” he says. “It’s because you feel like you were taken advantage of, or that [the company] wasn’t responsive.” At Virgin Mobile, he carried the principle of fairness through from the company’s pricing (prepaid, no fees) to its product design (customers could check their prepaid balance in real time through their Virgin device).

When he joined American Express, in 2010, as president of enterprise growth, Schulman operated with the same resolve. His team unveiled Bluebird, a prepaid card with no monthly or overdraft fees, in partnership with Walmart in late 2012. The retail giant sold Bluebird starter kits for $5 at checkout kiosks and allowed shoppers to fund the cards with up to $500. “I could have talked to a lot of executives who would not have been supportive” of serving a lower-income demographic, says payments veteran Laura Kelly, who pitched Bluebird to Schulman shortly after she joined American Express, in 2011. “Dan is a great business guy, but he also has a heart for people who are underserved. He got it immediately.”

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Some members of the enterprise growth team recall that going “down market” was a tough sell at an organization most comfortable evaluating the risk of high-net-worth individuals. But any internal resistance to democratizing the financial giant evaporated when Bluebird attracted 575,000 account holders and $275 million in prepaid funds within three months of launch. These days, with 49% of Americans living paycheck to paycheck, what was once considered “down market” is effectively “middle class.” Bluebird has served millions of people, the company says, and is still growing.


The snowcapped mountains of Davos, Switzerland, gleam in the January sun as Schulman joins the hosts of CNBC’s Squawk Box at their outdoor set. Schulman, wearing a brown Patagonia fleece and his signature jeans, is in town for the World Economic Forum’s annual meeting, along with 3,000 other global leaders. Without a hint of irony, the WEF dubbed this year’s meeting “Stakeholders for a Cohesive and Sustainable World,” and then invited a decidedly uniform group of stakeholders to opine on the topic.

Schulman, one of the few executives at the event to have followed through on the idea of maximizing a company’s purpose as relates to its employees, finds himself both in demand and under fire. Today, it is CNBC’s curmudgeonly cohost Joe Kernen who bristles at any mention of multi-stakeholder advocacy, playing the fearmonger. “It’s going to be expensive,” he says. “I hope it’s all justified and doable.” Kernen offers Schulman a compliment, but a loaded one: “You need a successful business, which you have, before you can become a just business.”

Yet Schulman’s own track record at PayPal, which he joined in 2014, suggests otherwise. In April 2016, when he was still in the early innings of transforming PayPal’s revenue engine and winning over Wall Street, PayPal committed to opening an operations center in North Carolina for 400 employees. The company held a jubilant news conference with then Governor Pat McCrory to celebrate. Two weeks later, at PayPal’s New York office, Schulman stopped short in front of a TV airing live coverage of McCrory making an announcement. North Carolina had just passed a measure requiring that people use the bathroom associated with the gender they were assigned at birth. Schulman shook his head. “That’s unbelievable,” he said. He turned to his team: “We’re out.”

The decision seems to have energized him. Schulman soon aggravated gun rights advocates by cracking down on the sale of firearms and ammunition through PayPal, leading to a public spat with PayPal cofounder Peter Thiel, who objects to the policy on libertarian grounds. During the January 2019 government shutdown, PayPal stepped up to offer federal employees interest-­free cash advances of up to $500. In February of this year, Schulman announced that PayPal would participate in Time to Vote, a nonpartisan initiative designed to increase voter turnout in 2020 by giving workers time off to visit the polls.

Schulman is also putting real money on the line. After surveying employees last year, he discovered that 60% of those working at call centers or in hourly roles were struggling to make ends meet. Other companies have committed to paying their workers a living wage, typically defined as around $15 per hour. But after reviewing the numbers, Schulman didn’t think a living wage, in itself, would do enough to improve his employees’ financial health. In October, he increased wages, ensuring that employees in each market where PayPal operates could cover their essential living expenses, such as transportation and housing, adjusted for the local cost of living. He also lowered healthcare costs by 58%, on average; issued stock grants; and rolled out a financial education initiative. “If you don’t act on values, what you stand for, then you don’t really stand for anything,” Schulman says. The wage boosts have affected one-third of PayPal’s 21,000 employees. At the other end of the spectrum, high earners in the New York office are now paying out of pocket for their catered lunches.

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Meanwhile, Schulman views PayPal’s products and services themselves as a democratizing force. Many of PayPal’s merchants, for example, have expanded their operations using the company’s working capital loans. The company lends more than $1 billion every quarter, much of it directed toward small businesses in banking deserts where local bank branches have closed. On April 13, it was approved to participate in Washington’s $349 billion Paycheck Protection Program, designed to provide emergency aid to small businesses and their employees, after Schulman spent weeks on the phone with federal officials, including Treasury Secretary Steven Mnuchin. (Though the victory has been fleeting—getting dollars into the hands of merchants has been a challenge.) On Schulman’s watch, PayPal has also doubled the number of accounts it serves—a total that today surpasses 305 million merchants and consumers—and is aiming for an ambitious 1 billion.

But there’s no denying that some tension exists between the company’s business model and its ideals. PayPal processes payments, and like any payments processor, it lives and dies by transaction volume, taking a small cut of each sale. Simply put, PayPal generates revenue when people shop. More and more people today are shopping online, and Schulman has ensured that PayPal is poised to take advantage of that shift, thanks to deals with the likes of Instagram Shopping and Uber. Last November, he shelled out $4 billion to buy Honey, a company that helps online shoppers find coupons and discounts. Schulman noted when announcing the acquisition that almost 40% of e-commerce revenue is generated by a “trigger event”—­­in other words, by something like an email containing a discount code. Honey, thanks to its data on consumer behavior, is arguably well-positioned to engineer personalized triggers and boost merchant sales. Today, on average, active users transact via PayPal three dozen times per year; Schulman sees a path to increasing that number by a factor of 10. “Eventually I want PayPal to have enough utility that somebody wants to use it every day,” he says.


On a cold morning in February, while in town for other meetings, Schulman pops by PayPal’s modest Washington, D.C., office, where two dozen employees sit shoulder-to-­shoulder in a conference room. After brief remarks on the prior evening’s Democratic primary debate (“You can see the struggle for the soul of the Democratic Party”), Schulman opens the floor.

“Globalization can be a good thing, but it can leave a lot of people behind. How does PayPal fit into that?” one employee asks. It’s a timely question: PayPal has just announced a major partnership that will allow it to operate in China after spending the past few years courting regulators there. Already, roughly half of PayPal’s revenue originates outside of North America.

“Every time I go around the world, I’m struck by how similar citizens are,” Schulman says. He recalls strolling Shanghai’s Wai Tan, or Great River Walk, on one of his many visits. “There were Chinese families pushing their kids in their carriages, taking selfies, laughing. It struck me as exactly the same as when I’m walking down [Hudson River Park] in New York City. Governments have different issues, and there’s obviously competition. But the essence of humanity is pretty much the same.”

As Schulman speaks, it’s easy to forget that there’s a trade war raging between China and the United States, or that China’s current administration has an ugly track rec­ord when it comes to transgender people and other minorities (witness the ongoing Uyghur internment camps). Schulman has a knack for reorienting the room around human-­scale stories, addressing hot-­button topics without pushing his audience’s hot buttons. This is a political skill, as much as a corporate one. The employee gathering, in a way, feels like a town hall.

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As it happens, Schulman has caught the eye of Democrats, who have noticed his ability to meld business success with progressive action. Democratic Party leaders have tried to recruit him for a number of roles; former New Jersey governor Jon Corzine at one point suggested that he run for U.S. Senate. Perhaps the right person could make the case for giving capitalism an upgrade, rather than giving up on it entirely. “I’ve always been intrigued by politics, because I feel like it’s a place where you can make a real difference,” Schulman says. Back in high school, his football coach taught him that leadership is about calling plays with conviction. “You have to call in the huddle with enough confidence that everybody believes that if we execute perfectly, we will score,” he says. The habit seems to have stuck. No matter what his future holds, Schulman says, driving “substantive change” will be his focus. “I don’t want to rule out anything. I really don’t. But it’s not this big sort of tease. I’m just saying, I don’t want to rule out anything.” There’s just only so much a CEO can do.

[Photo: Celine grouard]

Reading the zeitgeist

A look at how PayPal CEO Dan Schulman moved through the executive ranks, along with the books that were shaping business mindsets at the time

1981: Schulman joins AT&T as an account executive in New Jersey Bell’s marketing division.

1984: Before publishing Iacocca: An Autobiography, by Lee Iacocca, editors had to remove dozens of four-letter words from this best-selling Detroit tell-all by the famed auto executive.

1986: Schulman graduates from NYU Stern with an MBA.

1987: Trump: The Art of the Deal, by Donald J. Trump, is released. “If you’re going to be thinking anyway, you might as well think big,” the future president opines in an auto-biography that the New York Post called “chatty” and “generous.”

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1992: Schulman is promoted to group product director for toll-free 800 services.

1994: CEOs should build for the long-term, writes Jim Collins in Built to Last: Successful Habits of Visionary Companies, but simultaneously hold themselves to ambitious short-term standards.

1997: Schulman, then president of AT&T’s WorldNet service (its budding internet division), announces that the telecom giant will begin serving customers “over the internet.”

1997: In The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, Clayton M. Christensen teaches MBAs to live in dire fear of disruption.

1998: Schulman is promoted to president of AT&T consumer markets.

2000: Schulman is named CEO of Priceline.com.

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2001: Schulman is recruited by Richard Branson to run Virgin Mobile USA.

2001: The best way to lead, according to Jack Welch, General Electric’s former prince of plastics, in Jack: Straight From the Gut, is to eradicate “superficial congeniality.”

2007: Former Medtronic CEO Bill George releases True North: Discover Your Authentic Leadership (with Peter Sims). Know thyself, George preaches, and integrate your values into both your personal life and your work.

2010: Schulman joins American Express, where he establishes a separate innovation office.

2013: The Everything Store: Jeff Bezos and the Age of Amazon, by Brad Stone, shows how small teams, bold bets, and a commanding founder have powered Amazon’s rise.

2015: Schulman, hired the year prior as CEO of PayPal, spins the payments company out of eBay.

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About the author

Senior Writer Ainsley Harris joined Fast Company in 2014. Follow her on Twitter at @ainsleyoc.

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