Los Angeles:&nbsp;A CEO of an American firm has&nbsp;surprised one and all by announcing a 90 per cent pay cut for&nbsp;himself and slashing of company's profits to give employees a&nbsp;hefty salary hike after he read a study about happiness.
The boss of a technology start-up in Seattle shocked his&nbsp;employees by announcing he was taking a massive pay cut in&nbsp;order to raise the salaries of the firm's lowest-paid staff.
CEO Dan Price took a 90 per cent pay cut and slashed his&nbsp;company's profits just so that he could give his employees a&nbsp;raise.
Price, who heads the Seattle payment processing firm&nbsp;Gravity Payments that he founded, has pledged to make sure all&nbsp;of his staffers make at least USD 70,000 annually in the next&nbsp;three years.
To do that he is cutting his USD 1 million salary to USD&nbsp;70,000, and dipping into the firm's annual USD 2 million in&nbsp;profits. This will double the pay of about 30 of his workers and will mean significant raises for an additional 40.
Price decided to hike his employees pay after he read a&nbsp;study about happiness. It said additional income can make a&nbsp;significant difference in a person's emotional well being up&nbsp;to the point when they earn USD 75,000 a year.
He had also been hearing employees talk about the&nbsp;challenges of finding housing and meeting other expenses on&nbsp;their current salary, and decided there should not be such a&nbsp;big gap between his pay as CEO and that of his workers.&nbsp;
He described the raises as a "moral imperative".&nbsp;
Price told employees of the new pay policy at a meeting&nbsp;on Monday. For several moments there was stunned silence&nbsp;before people broke into applause and high fives, said Phillip&nbsp;Akhavan, a merchants relations worker whose USD 43,000 salary&nbsp;immediately jumped 16 per cent to USD 50,000.
"It took us a moment to understand what he was saying,"&nbsp;Akhavan was quoted by CNN as saying. His first call was to his&nbsp;wife, who he said did not believe him at first.&nbsp;
Nydelis Ortiz, a 25-year old underwriter who only started&nbsp;work there in January called her parents with the news.
"My mom cried when I told her," she said. Her USD 36,000&nbsp;salary was one of the lowest in the company.
Price said he is the majority owner of the privately-held&nbsp;firm, which he started in his college dorm room 11 years ago.
His older brother, who gave him seed money to get started, is&nbsp;the only other stockholder.
Price told CNN that he is not the only CEO looking to&nbsp;close the income gap. He has heard from almost 100 other CEO&nbsp;via email and text who say they support his move.

A CEO of an American firm took a 90 per cent pay cut for&nbsp;himself and slashed the company's profits to give employees a&nbsp;hefty salary hike after he read a study about happiness

US CEO takes 90 per cent pay cut to give his workers a huge raise

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US CEO takes 90 per cent pay cut to give his workers a huge raise

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