CEO gives himself massive pay cut to raise employees to $70,000 a year

CEO Dan Price said he thinks his life will still be luxurious when his salary goes down to $70,000.

That's right: Price, who now makes almost $1 million a year as the head of Gravity Payments, is giving himself a massive pay cut in order to level the playing field with his employees, who will also be making $70,000 soon.

"I think CEO pay is way out of whack," he told ABC News.

Chief executives earn nearly 300 times what the average worker makes, ABC News reports.

Price is not just narrowing the gap at the company; he's making it non-existent. By 2017, he hopes to have all of his employees up to his new $70,000 salary, at a minimum. This means that out of Price's 120 employees, 70 will get raises, with 30 doubling their salaries.

How did he get to that number? A 2010 Princeton study found that emotional well-being could increase with more money, but that effect leveled out at a certain point. Price chose that number to meet his employees in the middle.

Price said he is optimistic about the way his decision will impact the work environment at the credit card processing company, which he started in 2004. He said he expects it to raise morale and productivity.

As for his personal life following the pay cut, Price thinks he'll be just fine.

"I may have to scale back a little bit, but nothing I'm not willing to do," he said. "I'm single. I just have a dog."