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December 2015

The CEO Who Raised the Minimum Salary to 70K Is Alleged to Have Waterboarded His Wife, Among Other Things...

OK, all you socialists out there - be prepared to be disappointed, because BusinessWeek dug into the story of Dan Price, CEO of Gravity Payments, and found some issues related to why he raised the minimum salary at his company to $70,000.  

Here's a quick reset from my post back in August:

Mr. Price, 31, announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it. He wasn’t thinking about the current political clamor over Screen-shot-2014-12-18-at-85203-pm-304xx507-762-9-0 low wages or the growing gap between rich and poor, he said. He was just thinking of the 120 people who worked for him and, let’s be honest, a bit of free publicity. The idea struck him when a friend shared her worries about paying both her rent and student loans on a $40,000 salary. He realized a lot of his own employees earned that or less."

Lots of people still view this CEO as a hero.  He even got sued in reaction to his bravery by his former partner (also his brother). From BusinessWeek:

Two weeks after returning from the April media blitzkrieg in New York, Price told me, he was settling in at home to finally unwind. “I was going to watch my first soccer game since this had all happened,” he recalled. “My doorbell rang, and there was a legal courier. ‘Are you Dan Price?’ ‘Yes.’ ” Price said he was served with Lucas’s lawsuit. “I was shocked,” he said. “The soccer game got turned off pretty quickly.” It was during this recounting that Price told me how the comment from Lucas’s lawyer in the Seattle Times was the “only information I have about if they were connected or not.”

The possible retaliatory nature of the suit only adds to the drama of Price’s wage hike. “This is all speculation on my part,” Pirkle said in late September, before explaining how, as minority shareholder, Lucas gets paid dividends from Gravity’s profits. “Those profits are obsolete when you raise the wages. His brother’s, like, ‘That’s my money.’ ”

Pirkle suggested to me that the lawsuit could be part of a broader narrative about the purpose of business: “Is it to maximize shareholder returns? Or is it to best serve the customers and provide for employees?” Inc. hypothesized that Lucas filed the lawsuit after the pay increase “perhaps to pressure Dan to sell when Gravity was in the limelight, thus maximizing the value of Lucas’s share.”

But as BusinessWeek dug in and found out, Price isn't the hero we thought he was:

But there’s a problem with all those scenarios: The lawsuit predates the raise. Lucas did file the case two weeks after Price’s announcement, but according to court records, Price was served with the suit at his house on the afternoon of March 16—about two weeks before the fabled hike with his friend and almost a month before the wage increase announcement. Washington state allows litigants to serve a defendant before a suit is filed with the court. Hollon, Lucas’s attorney, says Price informed his brother of the pay hike through an e-mail on April 9, only four days before the New York Times and NBC descended on Seattle. (Pirkle said that in a later document, Lucas “specifically referenced” the wage hike as grounds for the case. Hollon responded that the May document added the pay increase as “one of the potential factual bases supporting the claims in the lawsuit” since “the wage program appeared to be a reaction by Dan to the lawsuit.”)

To put this in simple terms - Price only made the decision to drop his own salary and raise the company minimum to 70K after he was served with a lawsuit that challenged what he was paying himself.

He looks like Brad Pitt.  He raised the company minimum salary to 70K.  He's a hero we can all believe in.

Until he's not.  Where have all the good guys gone?

PS - just for the ladies still charmed by the good looks who are willing to give Price the benefit of the doubt, it turns out there's a TedX coming up that will indirectly claim that he's also a wife beater/waterboarder:

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 Colón. She spoke on Oct. 28 at the University of Kentucky about the power of writing to overcome trauma. Colón 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.” Later in the talk, Colón recalled once locking herself in a car, “afraid he was going to body-slam me into the ground again or waterboard me in our upstairs bathroom like he had done before.”

You can't make this stuff up - go read the entire article here at BusinessWeek.  More gems there.