Thread: CEO Who Set Minimum Wage At $70G Has Hit Hard Times

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Seattle CEO Who Set Firm's Minimum Wage to $70G Says He Has Hit Hard Times
Published August 03, 2015FoxNews.com

CEO cuts $1M salary to pay employees at least $70K

The Seattle CEO who reaped a publicity bonanza when he boosted the salaries of his employees to a minimum of $70,000 a year says he has fallen on hard times.

Dan Price, 31, tells the New York Times that things have gotten so bad he’s been forced to rent out his house.

Only three months ago Price was generating headlines—and accusations of being a socialist -- when he announced the new salary minimum for all 120 employees at his Gravity Payments credit card processing firm. Price said he was doing it, and slashing his $1 million pay package to pay for it, to address the wealth gap.

“I’m working as hard as I ever worked to make it work,” he told the Times in a video that shows him sitting on a plastic bucket in the garage of his house. “I’m renting out my house right now to try and make ends meet myself.”

The Times article said Price’s decision ended up costing him a few customers and two of his “most valued” employees, who quit after newer employees ended up with bigger salary hikes than older ones.

“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, 26, told the paper.

She said when she talked to Price about it, he treated her as if she was being selfish and only thinking about herself.

“That really hurt me,” she said. “I was talking about not only me, but about everyone in my position.”

Approaching burnout, she quit.

Grant Moran, 29, also quit, saying the new pay-scale was disconcerting

“Now the people who were just clocking in and out were making the same as me,” he told the paper. “It shackles high performers to less motivated team members.”

Price said McMaster and Moran, or even critic Rush Limbaugh, the talk show host, were not wrong.

“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.

The Times said customers who left were dismayed at what Price did, viewing it as a political statement. Others left fearful Gravity would soon hike fees to pay for salary increases.

Brian Canlis, co-owner of a family restaurant, already worried 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.”

“It pains me to hear Brian Canlis say that,” Price said. “The last think I would ever want to do is make a client feel uncomfortable.”

The Times said Price has dozens of new clients inspired by his move but those accounts won’t start generating profits for at least another year.

Making matters worse for Price is a lawsuit his older brother filed two weeks after the pay hike announcement.

Lucas Price, who owns 30 percent of the company, accuses his brother of taking millions of dollars out of the company while denying him the benefits of his minority ownership.

The lawsuit has forced Gravity to pay mounting legal fees at a time when the new salary scale is being eaten up by profits.

“We don’t have a margin of error to pay those legal fees,” Dan Price said.

You know, this just shows how goofed up some of these people are. Here's a successful guy who with his partners have built a nice business with 120 employees. Then something happens to him, he goes crazy, and sets his minimum wage at a ridiculous number that there's no way his company can afford, he can't afford, and his partners can't afford.

His good high-performing employees left disgruntled that they weren't making any more than people who worked less hours with less skill. His partner, who is his brother is suing him for robbing him of his return on investment, and the CEO himself is going broke, as will probably the company because it doesn't have any money after payroll, and customers get leery of businesses living hand to mouth.

So why did he do this?

Makes no sense at all.

Being good to your employees does not require cheating your partners, denying yourself, and most certainly not providing a pay scale that doesn't distinguish between different levels of requirements and obligations of the job.

Americans expect for fellow employees who have more training, performance, hours, pressure, skill, education and responsibility to be paid more, even substantially more.

Americans expect their owners, bosses and investors to get their money back and be rewarded financially for all that they do and make possible.

Americans are not socialists or communists. We do not expect the same pay for different work, we expect the same pay for the same work. We do not expect more than the worth of our job, we expect a fair market wage for the work in a federally protected labor market.

Americans do not expect owners and managers to throw themselves under a bus to pay them more than their job is worth and the company can afford.

Where did this CEO ever get the idea that we did and decide to jeopardize his entire company and all the jobs of his employees thinking otherwise?