Will the new base salary have a positive impact on employees' motivation? Should other companies consider paying their employees a base salary of $70,000 ? What are the pros and cons of this revolutionary approach to pay? Will it catch on? Case Study - Your New Salary Gravity Payments is a mobile credit-card payment processing company in Seattle, Washington, that was started by its CEO Dan Price while he was still a freshman at Seattle Pacific University. In 2014, Gravity Payments made \$2.2 million in profits, and Price earned a salary of $1 million. In April of 2015, Dan Price made a very surprising announcement to the company's 120 employees: "You might be making $35,000 a year right now but everyone in here will definitely be making $70,000 a year and I'm super excited about that." He told them that he would be cutting his $1 million salary and would use the company's profits so that all of the company's employees would earn a base salary of $70,000. About 30 employees will have their salary double, while others will get raises to bring them up to $70,000, and about 50 employees are already paid above $70,000. Before the increase, the average salary at Gravity Payments was $48,000. The pay increases will cost about $1,7 million, most of the company's profits. In order to afford it, Price is taking a pay cut from $1 million to $70,000. Price said he did not think it was right that he should earn up to 100 times more than most of his employees. Price says that he got the idea from a Princeton University study that found that emotional wellbeing increases with income, but only to about $75,000. According to Price, if companies want to have happy, motivated employees, they should pay them enough to thrive, not survive. He says, "I think this is going to become a competitive imperative over time, and it will catch on