Dan Price, CEO of Gravity Payments, is now renting out his house to make ends meet. Price, superstar executive who made headlines earlier this year upping all employee salaries to $70k per year, says that he may have become an internet sensation but that decision has caused him a lot of headaches as well.
For instance, two of his most valued employees quit just two weeks after the announcement. Their reasons? The seemingly democratic decision of making sure everyone gets $70k per year has, in effect, put little value in their more skilled labor. Adding insult to injury was Price's reaction to these wage concerns by his valuable lieutenants.
Gravity's former financial manager Maisey McMaster, who has quit the company, said that she was called "selfish" by raising the issue. She said "that really hurt me. I was talking about not only me, but everyone."
The next issue is clients. They have started to leave fearing the costs involved with a company which may have to raise rates to accommodate their expenses. On the client side, this comes as no surprise.
However, the biggest blow comes not from his employees but from his brother, Lucas, co-founder of Gravity Payments. He has filed a lawsuit against his brother revealing that his rights as minority shareholder were violated when Dan Price gave an "excessive" $ 1 million salary to himself. According to the lawsuit, a salary like that in the years prior to the big salary announcement is an alleged violation because of their limitations on compensation.
Complaints were signed on March 13 and the lawsuit filed on April 11, just 11 days after the big announcement.
As response to all these developments, Dan Price has this to say to The Seattle Times:
"I know the decision to pay everyone a living wage is controversial. Although the decision was not entirely made for business reasons, my team and I are committed to making my vision a business success.
"I deeply regret the rift this has caused in my relationship with my brother, who I love, and I'm hoping and praying for a quick resolution that's positive for everybody."
