Price, CEO of credit card processing firm Gravity Payments, upped the salaries for his 120 employees to reduce the wage gap, taking a huge cut from his own $1 million annual pay packet in the process. Price’s own co-founder brother Lucas sued the company over alleged depriving minority-shareholder benefits, although a local report says the lawsuit wasn’t directly related to the pay policy change.
Advertisement
Three months ago, a psychological study and a conversation with a friend inspired Dan Price, CEO of Gravity Payments, to more than double the salaries of some of his employees in the name of fixing income inequality.
Price said the decision to boost salaries also cost him a few customers and two of his “most valued” employees, who quit after newer and less skilled workers ended up with bigger salary hikes than those who had spent more time with the company. “I am renting out my house right now to try to make ends meet myself”.
In a video segment on The New York Times which accompanies an in-depth story on Price, the executive – oddly appearing in his garage seated on a bucket – says things are rough right now.
‘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, ‘ Gravity’s financial manager Maisey McMaster told The Times.
After announcing the pay increase in April 2015, Price told ABC news that he too would take a salary of ,000 and that he would have to “scale back”.
“I was kind of uncomfortable and didn’t like having my wage advertised so publicly and so blatantly”, the other employee, Grant Moran, said.
“There’s no flawless way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs”, he said.
Price is also facing a lawsuit filed by his older brother, Lucas.
Brian Canlis, co-owner of a family restaurant, already anxious about how to deal with Seattle’s new minimum wage, told Price the pay raise at Gravity “makes it harder for the rest of us”.
Advertisement
Mr Price admits the company does not have a margin of error to allow for those legal fees.
