Dan Price, the $70,000 minimum wage paying CEO of Gravity Payments, was heralded as a business hero in the first part of 2015, but now he’s made a very dubious year-end list.
Entrepreneur Magazine has named him as one of the 10 worst entrepreneurs of 2015, and with how things have worked out, it’s hard to blame them.
The idea itself wasn’t a bad one on the surface, and even won commendations from Bernie Sanders and other politicians; but once you get to know Dan Price the man, it becomes clear there were ulterior motives behind his decision and that it hardly had anything to do with altruism.
That’s at least what Bloomberg Business determined after digging into the lawsuit between Price and his brother.
In a lengthy piece entitled, “The CEO Paying Everyone $70,000 Salaries Has Something to Hide,” writer Karen Weise digs deeper into the world of Dan Price and what motivated his decision.
While the entire thing is a lot to take in in one sitting and will likely turn you against Dan Price the man, it’s interesting in the sense that it teaches one not to take everything they see in the news at face value.
Here’s an excerpt to illustrate the point in Weise’s own words.
“As we talked about his wild six months, I brought up the lawsuit, asking if Price thought Gravity’s spending on the raises triggered his brother’s suit, as he’d implied. ‘I have no idea,’ he slowly shrugged, looking right at me. ‘The quote in the Seattle Times from his attorney was, “It wasn’t only because of that. ”‘ … That one singular quote in the paper is the only information I have about if they were connected or not.”
Weise calls it a “poignant story,” and one she “almost wrote” until realizing that the Gravity CEO “knew more than he was letting on.”
“The lawsuit couldn’t have been prompted by the pay raise — if anything, it may have been the other way around. And his salary before the big announcement was unusually high. As I read through the court record and media reports, I began to see how Price was writing his own origin myth one interview at a time. With what he says is a $500,000 book deal, he’s solidifying his place as the next do-gooder businessman, joining the CEOs of bigger companies, such as Zappos’s Tony Hsieh and Whole Foods Market’s John Mackey. In the process, he’s surely become the only credit card processing executive to be feted by Esquire, courted by literary agents, and swooned at by women on social media who declared him ‘yum.’ But how it all happened is a little more complicated.”
To fully understand the complication, one has to know how company’s like Gravity work and how CEO pay is structured in these environments.
Without getting too technical here, it is really recommended that you read Bloomberg’s full piece linked above. The short of it, though, is this.
Gravity moves money from the point of sale to the bank every time a transaction is made, taking a very small cut which adds up after thousands and thousands of sales.
For private companies of the sort that Gravity is, Weise notes, Dan Price should have earned around $373,000 per year since it should have been a percentage of net revenue. His pay was actually closer to $1.1 million.
This, she attests, is what likely prompted the lawsuit, even though Price painted it in the media as if his brother was being reactionary to the kindhearted $70,000 minimum wage.
Weise also notes in the Bloomberg piece that Dan Price had pitched them six times to be on the cover in spite of previously complaining about the media whirlwind surrounding him.
In other words, to Weise, he is a disingenuous publicity seeker, something Entrepreneur must have picked up on when it named him as the No. 6 Worst Entrepreneur of 2015.
There is also the simple fact that it hasn’t worked out too well business-wise.
But what do you think, readers? Did everyone read Dan Price wrong over the $70,000 minimum wage, or was he sincere? Sound off in the comments section.
[Image via Flickr Creative Commons]