Back in April, Gravity Payments founder Dan Price flummoxed everyone by declaring he would raise his employee minimum wage to $70,000 a year. Price was congratulated by many, and ridiculed by many more.
How did this business experiment turn out? Not too badly. Although, Price’s brother is suing him.
Follow the link to get the full background and the latest update on business-owner Dan Price’s personal stand against inequality. It’s a feel-good true story to comfort your world-weary soul.
“Six months after Price’s announcement, Gravity has defied doubters. Revenue is growing at double the previous rate. Profits have also doubled. Gravity did lose a few customers: Some objected to what seemed like a political statement that put pressure on them to raise their own wages; others feared price hikes or service cutbacks. But media reports suggesting that panicked customers were fleeing have proved false. In fact, Gravity’s customer retention rate rose from 91 to 95 percent in the second quarter. Only two employees quit — a nonevent.
In fact, the biggest threat to Price’s company isn’t his strategy; it’s his brother. Lucas’s lawsuit, scheduled to be heard in May, could ruin Gravity. Price estimates legal fees will reach $1 million by then. The suit was filed on April 24, 11 days after the pay-raise announcement — perhaps to pressure Dan to sell when Gravity was in the limelight, thus maximizing the value of Lucas’s share. Dan says Lucas has refused his offer to buy him out for $4 to $5 million. (Lucas’s attorney says the suit is unrelated to the raises.)
When asked about his brother, Dan maintains his usual upbeat, grateful attitude: “We’re in such a great place with the company and Lucas helped me get here. Anything he gets, I won’t begrudge. I’ll be glad he got it and think he deserves it.” Asked how he can remain so charitable when his own brother is suing him — Lucas was best man at his wedding — Price laughs and says he’s been seeing a family therapist for about a year. “
— Paul Keegan, Inc. Magazine