CEO explains dramatic solution to company's wage gap
Gravity Payment's Dan Price slashes his $1M salary to $70,000, makes that new minimum wage for all employees
The founder of a Seattle-based processing company who famously increased the pay for each of his employees to at least $70,000 a year is reportedly being sued by his brother.
The Seattle Times reports Lucas Price, co-founder and director of Gravity Payments, accuses his brother Dan Price, co-founder and CEO of the company, of violating Lucas’ rights as a minority shareholder in the business and breaching contracts, according to court records.
The Times reports the complaints were filed March 13 and April 24, days after Dan Price announced the pay raises for his employees. Lucas Price’s attorney Greg Hollon told the newspaper the raises don’t directly relate to the lawsuit.
“It was an aggregation of events over the course of years,” Hollon said.
The Times, citing court documents, reports the brothers initially founded Price & Price as a merchant-services company in 2006 but would eventually restructure into Gravity Payments in 2008. During the restructure, according to the Times, Lucas Price agreed to a minority interest and a lesser role in the company, which led Dan Price to continue his role as CEO. Court records show contracts agreed by both Dan Price and Lucas Price limited Dan Price’s salary as CEO and protected Lucas Price’s minority shareholder rights.
Lucas Price is claiming his brother overpaid himself and deprived Lucas Price of minority-shareholder benefits. Dan Price was reportedly paying himself nearly $1 million before announcing his large pay cut to help increase the pay of hi employees. Lucas Price is now asking the court to order Gravity to repurchase his shares and provide complete accounting of its transactions, financial affairs and financial records.
Dan Price has denied the complaints against him.
The newspaper reports the next trial date is set for May 3.
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