Dan Price
Gravity Payments CEO Dan Price just took a $930,000 pay cut to raise his company's average salary to $70,000 per year. Gravity Payments

The CEO of Gravity Payments, Dan Price, 30, says he’s always had income equality in his mind. “Ever since I started, the first person that agreed to work with me got $24,000 per year and no health care or benefits because that’s all I could afford,” Price told CNN Money. “So, ever since then it’s always been on my mind to work on better wages but it was a question of ‘could the company afford it?’ so we finally got to a place where we’re successful enough to pull it off,” he continued.

Price is talking about the impressive $930,000 pay cut he took in order to raise the minimum salary average at his company, from $48,000 to $70,000 per year. Out of 120 employees, the huge shift affected 70 workers, including 30 who saw their salaries double. When asked how he came up with the math, Price explained that there’s a Princeton University study, which he’s a big fan of, that states that up to around $70-75,000 per year as an ideal benchmark to “have all your basic expenses covered” and therefore every extra dollar you make can have an impact on your happiness. “But making less than that can have an impact on your emotional health.”

Price broke the news to his employees at a meeting last Monday where they all remained silent for a moment, unsure if they’d understood correctly. When the information sunk in, they all cheered, clapped and high fived each other, as told by merchants relations worker, Phillip Akhavan. “It took us a moment to understand what he was saying,” he explained. In addition, Price explained he thinks something like this will definitely end up paying for itself. Despite it being what he calls a “capitalist solution to a social problem,” he’s convinced that motivated workers will bring more business and do their jobs better.

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