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The Story of the CEO Paying Everyone $70k Gets Complicated

Posted by samzenpus on from the not-so-fast dept.

ranton writes: Dan Price, CEO of Gravity Payments, made news last April when he raised all employee salaries to at least $70,000. He claimed his motive was based on research that shows increased wages increase happiness up to about $75k per year. But according to a recent Bloomberg article this may have been a smoke screen. Karen Weise found Dan Price has been fighting with his co-founder Lucas Price over Dan's salary for years, and that his co-founder served him with a lawsuit weeks before the pay raises were announced. Apparently Dan had been paying himself nearly three times the salary of CEO's of similar sized companies in his industry, over the strong objection of his co-founder. The lawsuit was not officially filed until after the announcement, making it originally look like the pay rise caused the lawsuit. Now it appears to be the opposite. Since the lawsuit is trying to force the CEO to buy out his co-founder based on the CEO's prior greed, lowering the short term profitability of the company while boosting his positive PR seems to be a likely motive for the pay hike.

3 of 233 comments (clear)

  1. Gets worse near the end of the article by JoeyRox · · Score: 4, Interesting

    "Price's life may get more complicated the week of Dec. 7, when TEDx plans to post online a public talk by his former wife, who changed her last name to Colon. She spoke on Oct. 28 at the University of Kentucky about the power of writing to overcome trauma. Colon stood on stage wearing cerulean blue and, without naming Price, read from a journal entry she says she wrote in May 2006 about her then-husband. "He got mad at me for ignoring him and grabbed me and shook me again," she read. "He also threw me to the ground and got on top of me. He started punching me in the stomach and slapped me across the face. I was shaking so bad."

  2. Profits soar since pay hike, so by mijkal · · Score: 5, Interesting

    "Since the lawsuit is trying to force the CEO to buy out his co-founder based on the CEO's prior greed, lowering the short term profitability of the company while boosting his positive PR seems to be a likely motive for the pay hike."

    Except that short-term profitability has DOUBLED since wages increases commenced (source). Did his plan then backfire?

  3. I feel as if /. is now a shitty tabloid. by Anonymous Coward · · Score: 5, Interesting

    No facts. Rampant speculation/innuendo/suspicion. Why do I read this page again?