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

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.

Comments

This has nothing to do with minimum wage

[Anonymous Coward]

I've watched Repubs and Dems jump all over various aspects of this story from day one.
"Ooh, he lost some quality workers because he didn't also raise the top wages therefore minimum wage sucks" ~Republitards
"Ooh, his company is doing good, therefore minimum wage is awesome" ~Demotards

Truth is, there is huge difference between raising everyone's wages in one company and raising everyone's wages in the entire country. One company raising its wages relative to all others makes that company stand out and attracts better talent. This publicity stunt generated lots of positive interest in his company, which surely increased their profits. That's good capitalism. That never would have happened if all wages everywhere were raised.

This is just the story of what happened to one company when they decided to raise wages. Nothing more, nothing less. The end.
Sincerely,
Not a Libertariantard