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US CEO takes 90 percent pay cut to give workers huge raise!

Posted in World

Published on April 17, 2015 with No Comments

A CEO of an American firm has surprised one and all by announcing a 90 percent pay cut for himself and slashing of company’s profits to give employees a hefty salary hike after he read a study about happiness.

The boss of a technology start-up in Seattle shocked his employees by announcing he was taking a massive pay cut in order to raise the salaries of the firm’s lowest-paid staff.

CEO Dan Price took a 90 percent pay cut and slashed his company’s profits just so that he could give his employees a raise.

Price, who heads the Seattle payment processing firm Gravity Payments that he founded, has pledged to make sure all of his staffers make at least USD 70,000 annually in the next three years.

To do that he is cutting his USD 1 million salary to USD 70,000, and dipping into the firm’s annual USD 2 million in 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 study about happiness. It said additional income can make a significant difference in a person’s emotional well being up to the point when they earn USD 75,000 a year.He had also been hearing employees talk about the challenges of finding housing and meeting other expenses on their current salary, and decided there should not be such a big gap between his pay as CEO and that of his workers.

He described the raises as a “moral imperative”.

Price told employees of the new pay policy at a meeting. For several moments there was stunned silence before people broke into applause and high fives, said Phillip Akhavan, a merchants relations worker whose USD 43,000 salary immediately jumped 16 per cent to USD 50,000.


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