A Seattle, Washington, CEO who made headlines when he raised the minimum salary of his employees to $70,000 a year revealed to the New York Times that he’s struggling to stay afloat.
Dan Price, the 31-year-old CEO of credit card processing firm Gravity Payments, faced criticism just three months ago when he announced a new salary minimum at his company. The reason for the hike, according to Price, was to address the wealth gap.
“I’m working as hard as I ever worked to make it work,” Price told the Times while sitting on a plastic bucket in the garage of his Seattle home. “I’m renting out my house right now to try and make ends meet myself.”
Price’s pay hike ultimately cost him a few customers, as well as two of his “most valued” employees.
“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 financial manager Maisey McMaster said. McMaster quit after confronting Price with her feelings on the pay increase. According to the 26-year-old, he responded by treating her like she was acting selfish.
“That really hurt me,” she said. “I was talking about not only me, but about everyone in my position.”
Another employee, Grant Moran, quit for similar reasons.
“Now the people who were just clocking in and out were making the same as me,” he said. “It shackles high performers to less motivated team members.”
Price admitted that his ex-employees were not wrong in their criticism.
“There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs,” he said. Brian Canlis, a client of Price’s who owns a family restaurant, said the pay raise “makes it harder for the rest of us.”
“It pains me to hear Brian Canlis say that,” Price said. “The last thing I would ever want to do is make a client feel uncomfortable.”
Two weeks after the announced pay raise, Price’s brother — who owns 30 percent of Gravity Payments — filed a lawsuit accusing him of taking millions of dollars from the company while denying him the benefits he was entitled to through his minority ownership.
“We don’t have a margin of error to pay those legal fees,” Price said of the suit.