Many of us know about Gravity Payments. It is a payment processing company that seems innocuous at first, until you learn that its CEO, Dan Price, has instituted a company-wide $70,000 minimum salary. He reported making this change in order to increase the happiness of his employees and make a difference in their lives. His decision got a lot of press coverage, and reactions ranged from astounded, to favorable, to downright angry.
Unfortunately, Price’s brother was one of the angry ones. Lucas Price ended up suing him, alleging that he had set aside too much profit for himself in the beginning. There was no indication as to whether the lawsuit had to do with the minimum wage increase, and, if anything, this lawsuit made Price more favorable in the public eye. Despite losing some employees who believed the wage increase was not fair to those with more experience, Price and Gravity Payments seemed to be doing well. New job applicants came pouring in and new hires were not difficult to come by.
However, Gravity Payments may still be in jeopardy. An article in Bloomberg Business reports that Dan Price may not be the altruistic CEO he’s made himself out to be. Through a series of interviews, Price’s story about raising the minimum wage went from sweet to sour, as he failed to respond to allegations that put him in a bad light. For example, Lucas’s lawsuit was filed before the minimum wage increased. This means that the lawsuit could not have been in response to the new minimum wage, which begs the question of if Price really was overpaying himself at the onset of Gravity Payments. Was his initial high salary not reflective of what the company was making overall? More importantly, was the minimum wage increase in response to Price’s knowledge of the lawsuit?
Of course, this leaves us to wonder if it matters in the business world if Price paid himself too much initially. Whether or not the claim is true, his company is still paying all employees at least $70,000 dollars. The motivation behind his decision is irrelevant.
However, it seems as if we should not ignore a CEO’s character while promoting a company based on his actions. If Gravity Payments itself was the focal point of the press, Price’s character may not matter, but Price is thriving from his wage decision. He has a great deal of money, a large amount of good press, and a book about his wage experiment on the way. That is a large amount of success for a man who may have abused company money (not to mention has abuse allegations against him by his ex-wife.)
What will the outcome of the trial between Price and his brother mean for Gravity Payments? We will have to wait to see. We can only be sure that the wage increase blew this case wide open. All in all, I would suggest taking Price’s character with a grain of salt for now.