The CEO of Gravity Payment shocked all of his employees by announcing he was taking a massive pay cut in order to raise the salaries of his lower paid staff. Dan Price the founder and CEO of a credit card payment processing company, Gravity Payments, decided to raise the minimum wage in his business to $70,000 which converts over to £47,000! This was only possible for Dan to accomplish because he cut his own wages by a massive 90%. Does this make him the most generous boss in the world?
“You might be making $35,000 a year right now but everyone in here will definitely be making $70,000 a year, and I’m super excited about this” said Mr Price, who started the firm from his bedroom in 2004. The national minimum wage is $7 an hour which adds up $17,000 in gross annual income.
Mr Price, whose company handled $6.5 billion in transactions last year, decided that he would raise his employees pay after reading a study on happiness in the workplace. The research conducted by Nobel Prize winning economist Angus Deaton and psychologist Daniel Kahneman, found that what they called emotional well-being rises with income, but only to a point which is estimated to be around $75,000 a year.
“My salary wasn’t $1 million because I need that much to live but it would cost that much to replace me as CEO” Mr Price told ABC News “I think CEO pay is way out of whack. It ended up impacting me because I want the company to be sustainable even if something was to happen to me. Temporally I’m going down to the minimum until the company gets back to where it was.”
The company has 120 employees who were stunned in to silence when they were told the news but quickly broke into applause. A spokesman for the company said the average salary was currently $48,000 and the measure will see pay increase for about 70 members of staff. “I’m a big believer in less” he added “The more you have, sometimes the more complicated your life gets”
The United States has one of the world’s largest pay gaps, with chief executives earning nearly 300 times what the average worker makes, according to some economists’ estimates. “The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd,” said Mr Price, who said his main extravagances were snowboarding and picking up the bar bill. He drives a 12-year-old Audi, which he received in a barter for service from the local dealer. “As much as I’m a capitalist, there is nothing in the market that is making me do it,” he said, referring to paying wages that make it possible for his employees to go after the American dream, buy a house and pay for their children’s education.