Dan Price of Gravity Payments is a 31-year-old CEO who made headlines in April after publicly stating he would bump all of his employees to a $70,000 minimum wage, while cutting his own $1 million per year salary to the same in the process.
At the time, the move heralded great public support from individuals tired of hearing stories about overpaid CEOs, as well as proponents of increasing the minimum wage nationwide.
Now, new reports from Fox News and the New York Times reveal that Price may have overreached quite a bit in his generosity.
The entrepreneur is reportedly “struggling to stay afloat,” he tells the Times, and he also admits that many of the criticisms he’s received are warranted.
“There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs,” he said.
One of the downsides included having experienced employees making close to the $70,000 minimum wage receive an almost nonexistent pay bump, while newbies with the company received a 100 percent increase (or more) in salary.
Gravity financial manager Maisey McMaster, 26, was one of the individuals agitated by the decision, as well as the reaction Dan Price gave her when she went to complain.
“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” she said, adding that he treated her as if she were “being selfish” when confronted, Fox News reports.
“That really hurt me. I was talking about not only me, but about everyone in my position.”
McMaster was joined by 29-year-old colleague Grant Moran in showing disdain for the $70,000 minimum wage idea.
“Now the people who were just clocking in and out were making the same as me,” he said in comments to the Times. “It shackles high performers to less motivated team members.”
Both, considered among the more highly-valued Gravity Payments employees, ended up quitting as a result.
Price also said that he’d gotten pushback from at least three clients, one of whom told him that he had “just made my job harder.”
Price was able to pick up some new business riding the wave of good publicity that his decision invoked, but it will still be another year or so before those accounts will prove profitable.
In the meantime, he admits he hasn’t “made this little money in a long time,” and that he is renting out his house to try and make ends meet.
“I’m working as hard as I ever worked to make it work,” he added.
Do you think Dan Price made a big mistake instituting a $70,000 minimum wage, and is this proof that increasing the minimum wage hurts more than helps? Sound off in the comments section.
[Image of Dan Price via Flickr Creative Commons]