US CEO Raises Minimum Salary For Employees To AU$90,000 To Help Them Achieve ‘American Dream’

Gravity Payments founder Dan Price announced that he would pay more than AU$90,000 (US$ 70,000) at least to his 120-person staff in the company. The salary will be increased even for the lowest-paid salesman, customer service representative and clerk for the next three years.

Mr. Price got the idea after reading an article on happiness. According to the article, extra money makes a significant different to the lives of people who earn less than $90,000.

The average salary at the company is around AU$62,000 year at the moment. Around 30 employees will double their salary and around 70 employees will have bigger pay cheques, Gravity spokesman Ryan Pirkle said.

The Seattle-based credit-card payment processing company was founded in 2004. Mr. Price was 19 when he set up the firm. He said that he would decrease his own salary to pay his employees. He gets much more than a million at the moment. He will reduce it to AU$90,000. He will also use around 80 percent of the company profit, which is expected to be around AU$2.9 million in 2015, to pay the employees.

Chief executives in the U.S. earn around 300 times more than what the average worker earns, making the country among those with the largest pay differences in the world. The 20th century management visionary Peter Drucker and Gilded Age tycoon J. Pierpont Morgan recommended that the pay gap should have the 20-to-1 ratio.

Mr. Price said that the market rate for him as a CEO compared to a regular person was “absurd” and “ridiculous.” He added that most of his earnings were spent in picking up the bar bill and snowboarding. His 12-year-old Audi was a gift from the local dealer in barter for service.

“As much as I’m a capitalist, there is nothing in the market that is making me do it,” Mr. Price said as he referred to helping his employees achieve the American dream of buying a house and paying for their children’s education.

Mr. Price, on the other hand, said that he was not planning to have political gains with his decision. Ron Price, his father, is a motivational speaker and wrote a book on business leadership.

Contact the writer: s.mukhopadhyay@ibtimes.com.au