Why This CEO Cut His Salary to 70K Worker Wage

Gravity Payments CEO Dan Price decided to do something about the pay gap at his company.
6:00 | 04/16/15

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Transcript for Why This CEO Cut His Salary to 70K Worker Wage
Is this some sort of price on worker satisfaction. How about $70,000. The CEO of gravity payments making headlines for a taking a massive pay cut so his employees can all earn at least 70 K. Now he is called boss of year and he may be just sparking a revolution. Here's ABC's Ryan smith. Reporter: In the star-studded galaxy of America's favorite bosses, those CEOs with the highest approval ratings from their own employees, there's the likes of Tim cook, Starbucks titan Howard shurlts and Amazon innovator but this week in the shadow of one man. Effective immediately we're going to put a poll any to place. Reporter: Meet Dan price, the 30-year-old CEO of little-known seattle-based gravity payments who on Monday made this startling announcement to his 120-person staff. We're going to have a minimum 70,000 pay raise for everyone who works here. Reporter: You heard that right. Every employee at the small credit card payment company will be scaled up to a minimum annual salary of $70,000. Why do you call ate capitalist solution? I think this is a winning move. I think this is a competitive move. I think this will allow us to be stronger. Reporter: How will he do it? In part, he says, by cutting his own salary down from $1 million to just 70 grand. How did you come to this idea? I can go a few years making a lot less and I want to take care of folks. This is a risk that's worth taking. So I just did it. Reporter: Some chock it up to a grand publicity move, he says his motivation is deeper. When I think of income gap and growing inequality and the way it keeps increasing. For me that's a trend that is bad for all of us, be rich or poor. Reporter: His critique of income disparity is the 4r5i9 nest in a growing gap of rich and poor as it reaches unprecedented levels. Minimum wage has not kept up with inflation and it hasn't been raised in a long time. We're finally starting to see that outrage. Reporter: Today thousands of low-wage workers took to the streets to demand $15 an hour pay. Really hard as a single parent to go out and try to feed your three kids with $10 an hour. Reporter: 38-year-old Melissa Rodriguez was among the crowd in New York City. A full-time home health care worker who makes $10 and hour and is struggling to make ends meet. I'm working diligently, working hard, trying my best. Giving my patients they work for the best that I can and that's all I'm asking for $15 so my kids can have a better place to live. So my kids can eat. Reporter: She says she doesn't want to be on food stamps and welfare but has no other options despite her full-time job. Even celebrities like Gwyneth paltrow has haven up the cause. Trying to live on $29 a week in food to raise awareness. Paltrow drew criticism for picking items like kale and limes. Income inequality is one of the 2k3wr5i9est issues of our time right now. This has been simmering a long time. It is almost as if it just caught fire. Reporter: Some states raised the minimum wage, above the federal guideline of $7.25 an hour, 14 states have not. Are you hoping to change the pay structure in the U.S.? I hoping to change -- have more of an emphasis on leadership. To me, leadership means you are actually thinking of the people you serve, the people you lead and doing everything you can to make it the best situation possible for them. Reporter: Gravity payment Dan price isn't the only CEO who's listening. Nick is a proud venturalist and part of the 1%. Multiple homes, yacht, my own plane. Reporter: Last year in a powerful Ted talk he issued a warning. Show me a high -- society and I will show you a police state or uprising. The pitch forks will come for us if we do not address this. It is not a matter of if but when. Reporter: He says if we don't figure out a way to top distribute wealth in the nation it will collapse. The gap between rich and poor in this country hasn't been this great for 100 years. What you end up with a tiny minority getting richer, like me but most families either staying the same or getting poor. What that is creating is a death spiral of falling demand. It is a catastrophe for the economy, but also for the democracy. Reporter: But now the tide may be slowly turning. Last June, the city of Seattle changed the minimum wage to $15 an hour. Making it the nation's highest hourly wage. Companies like Wal-Mart, target, gap and costco have raised employee wages voluntarily. And earlier this month, McDonald's said for the company-owned stores, franchises excluded, it would raise the starting salary to $1 above local minimum wage and give workers the ability to accrue paid time off. Back in Seattle, at gravity payments the average worker made $48,000 but Dan price felt it wasn't enough. If you are at the poverty line you want to work hard, you care about what you are doing. There's always this nagging thing in the back of my head, can I make everything work. Reporter: People across the country have taken note of his bold move. A lot of people have been saying best boss ever and that stuff. My statement is easy to be a great boss when you have great people around you. If I'm a great boss it is because of them and our clients. Reporter: A pay hike for a few which may be a game changer for many. I'm Ryan smith for "Nightline" in New York. What a guy. So should CEOs take personal responsibilities for closing the pay gap head to our Facebook page and let us know in the comments.

This transcript has been automatically generated and may not be 100% accurate.

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