Seattle CEO cuts own salary 90% to hike employee wages
16 Apr 2015
A Seattle CEO has cut his own salary by 90 per cent to hike wages for his lowest-paid workers, calling the move a "moral imperative."
Dan Price, 30, CEO of Gravity Payments, the largest payment processor in Washington, pledged to cut back on his $1-million salary and shrink his company's profits so employees at the processing firm he co founded with his brother Lucas Price, could make at least $70,000 annually in the next three years.
Price told The Huffington Post that there was greater inequality today than there had been since the Great Recession.
"I'd been thinking about this stuff and just thought, 'It's time. I can't go another day without doing something about this.'"
The Seattle raises come as thousands of underpaid workers in various sectors demonstrated in New York and other cities demanding $15 in minimum wages on Wednesday.
Price, who was awarded by president Obama with the National SBA Young Entrepreneur of the Year Award in 2010, said a study he read about additional income significantly increasing happiness inspired him to act.
Price announced this week that any employee at Gravity Payments, making less than $70,000 annually would receive a $5,000-per-year raise or be paid a minimum of $50,000, whichever is greater.
The move was aimed ensuring that by December 2017, everyone would earn $70,000 or more.
To facilitate the change, Price said his salary would decrease to $70,000 from about $1 million until or unless the company's profits were greater than last year's approximately $2.2 million.
"My salary wasn't $1 million because I need that much to live, but that's what it would cost to replace me as a CEO," 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 happens to me. Temporarily, I'm going down to the minimum until the company gets back to where it was."
Price started the company in 2004 at the age of 19, when according him the cost of living in Seattle was much lower than it is today.
When asked what life will be like for him at a lower pay, he said, he had not even thought about that at all, too much.
He said his life started "pretty simple, in a lot of ways". He added he did not have a lot of financial obligations or debts.