CEO Lowers His Salary to $70,000, Raises Employees’ Salaries to $70,000
While we’re on the subject of Equal Pay Day, here’s another way of increasing pay equality: Dan Price, founder and CEO of Gravity Payments, just announced that he would lower his million-dollar salary to $70,000 in order to pay all of his employees at least $70,000.
As Price told the New York Times:
Mr. Price said he wasn’t seeking to score political points with his plan. From his friends, he heard stories of how tough it was to make ends meet even on salaries that were still well-above the federal minimum of $7.25 an hour.
“They were walking me through the math of making 40 grand a year,” he said, then describing a surprise rent increase or nagging credit card debt.
“I hear that every single week,” he added. “That just eats at me inside.”
The NYT reports that the average salary at Gravity Payments, a credit-card processing company, is currently $48,000. The increase to $70,000 will take place over the next three years, and it will include everyone in Gravity Payments’ 120-person staff who is not currently earning over $70K, or approximately 70 employees total.
Why $70,000? Because Price read a PNAS study that correlated $70,000 with happiness. It’s one of those studies that suggests once we earn over a certain salary, more money does not equal more happiness, and Price is ready to test that out — both with his employees, and with himself.
What will it be like to take a ~$930,000 pay cut? Price will probably be able to handle it just fine. The NYT reports that 30-year-old Price lists his “main extravagances” as snowboarding and going to bars, and he drives a 12-year-old Audi that he bartered for.
And what will it be like for the Gravity Payments employees whose salaries double? Here’s one more NYT quote for you:
Hayley Vogt, a 24-year-old communications coordinator at Gravity who earns $45,000, said, “I’m completely blown away right now.” She said she has worried about covering rent increases and a recent emergency room bill.
I wish Gravity Payments the best of success, because I think this is a great idea.
Photo credit: frankieleon
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