Dan Price, CEO of Gravity Payments, resigns after assault allegations

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The Seattle CEO who achieved national fame by setting a $70,000 minimum wage for all his employees — and to match his own salary — has resigned from the company he founded in college amid allegations of assault.

Dan Price said on Wednesday he is stepping down from Gravity Payments, a credit card processing company, to spend more time “fighting false accusations”. Earlier this year, he was accused of kissing a woman against her will, the Seattle Times reported.

“My number 1 priority is that our employees work for the best company in the world, but my presence here has become a distraction,” he wrote in an email to staff that he also shared on Twitter on Wednesday evening. “I also have to relinquish these duties to focus full-time on fighting false accusations made against me,” adding, “I’m not going anywhere.”

Price did not address the allegations or immediately respond to a request for comment. Gravity Payments did not immediately respond to a request for comment.

Price, a frequent critic of company leaders and the huge pay gap between them and their employees, gained national fame in 2015 after announcing that he would increase each employee’s salary to at least $70,000. At the time, its 120 employees were paid an average salary of $48,000 a year, according to the Times.

He also cut his own $1 million in compensation to that floor, took a pay cut of more than 90 percent, and drained about three-quarters of that year’s profits to cover higher wages, the report added. Price said he would keep his salary low until the profits were recovered.

On Twitter, Price praised the success of his company’s model and the benefits for employees. The minimum wage for workers is now $80,000, he said, and the workforce received a $10,000 base increase this year. Job openings typically attract more than 300 applicants, he said.

The original salary cap was set the same year Price won a legal battle against his brother, Lucas Price. A three-week lawsuit followed after his older brother, Lucas Price, alleged that his rights as a minority shareholder had been violated when Dan Price increased his own salary. A King County Superior Court judge disagreed and ordered Lucas Price to pay his brother’s legal costs, totaling $1.3 million.

Price was 19 when he started Gravity Payments in 2004 from his dorm room at Seattle Pacific University, with seed money from Lucas Price, according to the Times.

Now 38, Price’s public persona has been shaped around his advocacy for average workers and criticism of big business. He wrote a 2020 book titled “Worth It: How a Million-Dollar Pay Cut and a $70,000 Minimum Wage Revealed a Better Way of Doing Business.” That same year, he wrote a perspective piece for The Washington Post, advocating for his company’s treatment of workers as a model that empowered employees to decide how to cope with the economic shocks during the early months of the pandemic.

He also wrote that 98 percent of Gravity Payments employees voluntarily cut their wages from 5 to 100 percent to avoid layoffs. Price said Wednesday that the company has never laid off a single employee in its 18-year history.

Price’s profile rose as a broader conversation about wage inequality and economic inequality developed, with corporate America and their highly compensated executives often bearing the brunt of the criticism.

A 2019 analysis by researchers at the Economic Policy Institute found that executive pay has increased nearly 1,000 percent over the past four decades after adjusting for inflation. The research found that the average wage for top companies at the country’s 350 largest companies was $1 million a year, or more than $17 million when the realized value of stock options is taken into account.

Meanwhile, the minimum wage at the federal level has remained unchanged since 2009 at $7.25 an hour. Although some state governments have taken the lead in raising the floor to over $15.

The company’s chief operating officer, Tammi Kroll, has stepped down as CEO, Price said in his announcement.

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