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CEO who paid employees $70,000 has a secret
Dan Price, CEO of Seattle-based credit card processing company Gravity Payments, gained attention in April when he announced that he would raise each of his employees' salaries to $70,000.
Price cut his own $1 million salary and the company's profits to support the changes.
For some, that meant an exciting doubling of their previous incomes. For others, the salary increases were a slap in the face and the beginning of a decline in the business's stability and success.
"The people who were just clocking in and out were making the same as me. It shackles high performers to less motivated team members," Grant Moran, former Gravity web developer, told Fox News in August.
Former Gravity financial manager Maisey McMaster expressed the same sentiments.
"He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump," she told The New York Times.
That same month, Price spoke about how he was suffering from the cut in his own salary.
"I’m working as hard as I ever worked to make it work," he told The Times. "I’m renting out my house right now to try and make ends meet myself."
Numerous news outlets spotlighted the CEO, praising Price as a compassionate do-gooder. Actor Russell Brand even compared the long-haired businessman to Jesus, saying that in a "Christ-like move, (he overcame) the prevailing ideology of the time (by) doing something kind and sweet."
But according to Bloomberg Business, Price may not be so selflessly motivated.
A lawsuit filed against Price by his brother, Lucas Price, tells a different story.
In a newspaper interview, Dan Price said his brother, who owns about 30 percent of Gravity, filed suit two weeks after the pay changes. He insinuated that Lucas Price sued in reaction to the salary increases, saying, "I deeply regret the rift this has caused in my relationship with my brother."
But an investigation by Bloomberg reveals that Dan Price might have imposed the employee salary increases in an effort to cut his salary. Dan Price’s motive, Bloomberg suggests, might have been to quell his brother’s claim in the lawsuit that he "paid himself excessive compensation for a number of years over Lucas’ objections."
The salary increases may also have been an effort to reduce Lucas Price’s compensation, which is derived from profits, according to the Bloomberg report.
The investigation further revealed that although Lucas Price’s suit was filed two weeks after Dan Price’s announcement, the CEO was served with the suit at his Seattle home two weeks before the day that Dan Price said he came up with the idea and almost a month before the wage increase announcement.
According to the Bloomberg report, Dan Price did not present any counter evidence to explain the inconsistencies in his story, nor to refute his brother’s claims.
Dan Price, CEO of Seattle-based credit card processing company Gravity Payments, gained attention in April when he announced that he would raise each of his employees' salaries to $70,000.
Price cut his own $1 million salary and the company's profits to support the changes.
For some, that meant an exciting doubling of their previous incomes. For others, the salary increases were a slap in the face and the beginning of a decline in the business's stability and success.
"The people who were just clocking in and out were making the same as me. It shackles high performers to less motivated team members," Grant Moran, former Gravity web developer, told Fox News in August.
Former Gravity financial manager Maisey McMaster expressed the same sentiments.
"He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump," she told The New York Times.
That same month, Price spoke about how he was suffering from the cut in his own salary.
"I’m working as hard as I ever worked to make it work," he told The Times. "I’m renting out my house right now to try and make ends meet myself."
Numerous news outlets spotlighted the CEO, praising Price as a compassionate do-gooder. Actor Russell Brand even compared the long-haired businessman to Jesus, saying that in a "Christ-like move, (he overcame) the prevailing ideology of the time (by) doing something kind and sweet."
But according to Bloomberg Business, Price may not be so selflessly motivated.
A lawsuit filed against Price by his brother, Lucas Price, tells a different story.
In a newspaper interview, Dan Price said his brother, who owns about 30 percent of Gravity, filed suit two weeks after the pay changes. He insinuated that Lucas Price sued in reaction to the salary increases, saying, "I deeply regret the rift this has caused in my relationship with my brother."
But an investigation by Bloomberg reveals that Dan Price might have imposed the employee salary increases in an effort to cut his salary. Dan Price’s motive, Bloomberg suggests, might have been to quell his brother’s claim in the lawsuit that he "paid himself excessive compensation for a number of years over Lucas’ objections."
The salary increases may also have been an effort to reduce Lucas Price’s compensation, which is derived from profits, according to the Bloomberg report.
The investigation further revealed that although Lucas Price’s suit was filed two weeks after Dan Price’s announcement, the CEO was served with the suit at his Seattle home two weeks before the day that Dan Price said he came up with the idea and almost a month before the wage increase announcement.
According to the Bloomberg report, Dan Price did not present any counter evidence to explain the inconsistencies in his story, nor to refute his brother’s claims.