Dan Price, the founder and CEO of Gravity Payments, has raised the minimum wage for his company’s 120 employees to $70,000, according to The New York Times.
No, I didn’t add an extra zero by mistake. Everyone is getting $70,000.
The move will result in raises for 70 employees, 30 of whom will double their current salaries. In order to help pay for the new minimum wage, Price himself will drop his salary from around $1 million a year to $70,000.
At this point you might suspect Mr. Price is suffering from a brain tumor. But apparently that’s not what motivated the generous move. He came up with the idea after reading an article about the correlation between happiness and income.
“The market rate for me as a CEO as compared to a regular employee is ridiculous, it’s absurd,” he told The Times. “As much as I’m a capitalist, there’s nothing in the market that is making me do this.”
Today the average CEO makes about 300 times more than the average employee, so Price’s gesture is a breath of fresh air. But aside from taking a personal pay cut, Price will also be forced to use roughly 80 percent of his company’s anticipated 2015 profits to cover the additional cost. So whether or not the company can sustain such a high minimum wage remains to be seen. There’s also the possibility that nervous CEOs from other companies will have Price assassinated. But only time will tell.