“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.”