The Seattle CEO who raised salaries for all of his employees to a minimum of $70,000 a year, drawing accusations of socialism, now says he has fallen on hard times.
Dan Price, the 31-year-old CEO of credit-card processing firm Gravity Payments, told The New York Times that things have gotten so bad for him financially that he’s been forced to rent out his own house to make ends meet.
“I’m working as hard as I ever worked to make it work,” he said, The Times reported Friday. “I’m renting out my house right now to try to make ends meet myself.”
Just three months ago, Mr. Price made headlines after he announced he would give all 120 of his employees a minimum salary of $70,000, slashing his own $1 million pay check to pay for it. He made the drastic decision to address the wage gap.
Now Mr. Price says the decision has cost him a few customers and two of his “most valued” employees, who quit after newer, less skilled employees ended up with bigger salary hikes than those who had been working longer for the company.
“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 a bump,” said Maisey McMaster, 26, Gravity’s financial manager, the Times reported.
Ms. McMaster, who has now quit the company, said that when she approached Mr. Price with her concerns about the wage changes, he treated her as if she was being selfish.
“That really hurt me,” she said, the Times reported. “I was taking about not only me, but everyone.”
Grant Moran, 29, also quit after the pay changes were enacted.
“Now the people who were just clocking in and out were making the same as me,” he told The Times. “It shackles high performers to less motivated team members.”
Customers who left told The Times they were dismayed by Mr. Price’s decision, viewing it as a political statement that could end up leading to more expensive customer fees to pay for the salary increases.
Mr. Price has garnered new clients inspired by his wage decision, but those accounts won’t generate profits for at least a year, The Times reported.
Meanwhile, Mr. Price’s brother Lucas, who owns 30 percent of the company filed a lawsuit two weeks after the pay raise announcement, accusing his younger brother of taking millions of dollars out of the company while denying him the benefits of minority ownership.
With most of his own paycheck and last year’s $2.2 million in profits being shoveled into the salary increased, Dan Price said, “We don’t have a margin of error to pay those legal fees,” The Times reported.