Pay cut is temporary for Gravity Payment’s CEO

The CEO who cut his own pay to give his employees a $70,000 minimum wage says his pay will have to go back to its million dollar rate in the future.

“My pay, at some point, will have to go back. It needs to be set at market rate,” said Dan Price, CEO of Gravity Payments. “If I’m not able to work for some reason, I want the company to still be OK and move forward.”

Price chatted with KIRO Radio’s Dori Monson on Friday afternoon about the nuts and bolts of the high-profile minimum wage at Gravity Payments.

“I think it’s wonderful Dan, I really do,” Dori said. “It’s your company and what you choose to do with your employees is strictly and exclusively your business.”

But Dori wonders how much of the raise is for his workers’ benefit and how much is simply a publicity stunt to hype his company.

Price said that there is a significant ethical factor to the raises, but that Dori is not entirely incorrect in his suspicion.

Price’s “experiment,” as he put it, is up to the test and he hopes it works out. But, the CEO said it’s going to take money. Of his 120 employees, 70 received a considerable pay bump with the new minimum wage, and 30 doubled their pay. It will take $1.7 million to cover the raises at Gravity’s current size, and more as the company grows, Price noted. Publicity, though, will only pay for about a quarter of the price tag.

“I need to pay for it. This is an expensive thing,” Price said.

“When you’re making below $70,000 a year, it can be tough to stay focused and make ends meet in Seattle. It’s getting more expensive. I wanted to remove that distraction,” he said. “I’ve never thought it was right for me to live a significantly different lifestyle than the folks I work with.”