The CEO of a Seattle-based company who is raising the minimum pay for his employees to $70,000 a year over concerns about inequality is receiving praise, as well as questions, for his bold step.
"It's not about making money,'' Gravity Payments CEO Dan Price told Hoda Kotb on TODAY Wednesday. "It's about making a difference."
Price, the company's founder, made the announcement on Monday, and received a standing ovation from his 120 employees, the majority of whom make just under $40,000 currently. He determined the $70,000 figure after reading an article on how more money makes a crucial difference for those who earn less than $70,000 a year. He also announced that he will gradually lower his own salary from $1 million to $70,000.
The money for the increased salaries will use up 75 to 80 percent of Gravity Payments' projected $2.2 million profit this year. The company, which Price started in his college dorm room and now processes transactions of more than $6 billion for 12,000 businesses, is not publicly traded, so there is no chance of shareholder fallout for Price's decision to raise salaries.
More from Price:
- On why he's raising salaries: "For me, I really do view everything I do as a responsibility,'' he said. "Seeing growing inequality and seeing how its harder to just make ends meet and kind of live the normal American dream, things are getting more and more expensive, especially in a city like Seattle, and the wages aren't keeping up."
- On the reaction to his decision: "I think people were a little nervous for me, to be honest,'' he said. "Taking that big of a pay cut, first of all. Secondly, creating these expectations. I heard from a lot of people, can you do this? Can you pull this off? Are you going to go out of business from this? It is a risk, I think in the short term, but I have 100 percent confidence in the medium and long term. It's gonna be great for the company, and even more importantly, great for all of the independent businesses we serve."