“My No. 1 priority is for our employees to work for the best company in the world, but my presence has become a distraction here,” he wrote in an email to staff that he also shared on Twitter on Wednesday night. “I also need to step aside from these duties to focus full time on fighting false accusations made against me,” adding, “I’m not going anywhere.”
Price did not elaborate on the allegations or immediately respond to a request for comment. Gravity Payments did not immediately respond to a request for comment.
Price was charged in February with fourth-degree assault and reckless driving after prosecutors said he attempted to kiss a woman in his car after a dinner meeting, according to the report. When she refused, Price allegedly drove to a North Seattle parking lot where he did “doughnuts” with her in the car.
His attorney entered a not guilty plea in Seattle Municipal Court in May.
A frequent critic of corporate executives and the vast pay gap between them and their workers, Price won national acclaim in 2015 after announcing he would raise every employee’s salary to at least $70,000. At that time, his 120 employees were paid an average salary of $48,000 a year, according to the Times.
He also reduced his own $1 million compensation to that floor, taking a more than 90 percent pay cut, and tapped roughly three-quarters of that year’s profits to cover the higher wages, the report added. Price said at the time that he would keep his salary low until the profits were earned back.
Price often turned to Twitter to tout the success of his company’s model. His posts are breezy, unlike the often stilted posts of business executives, offering his 770,000 followers an online persona that mixes labor activist with work-life-balance influencer. He evangelizes on fair-minded bosses and companies. The minimum pay for Gravity workers is now $80,000, he has noted, and the staff received a $10,000 baseline raise this year. It also offers unlimited paid time off. Job openings typically attract more than 300 applicants, he said.
Before the resignation announcement, he tweeted about layoffs, proclaiming, “An actual good CEO would never do layoffs ever.”
The original salary floor was set the same year Price won a legal battle against his brother, Lucas Price. A three-week court battle ensued after Lucas Price alleged that his rights as a minority shareholder were violated when Dan Price upped his own salary. A King County court disagreed, and ordered Lucas Price to pay his brother’s legal fees, totaling $1.3 million.
Price’s profile rose as a broader conversation was playing out around pay disparity and economic inequality, with corporate America and its highly compensated executives often catching the brunt of the criticism.
In 2015, the year Price cut his pay, the nation’s CEOs were collecting 276 times the annual pay of the typical worker, according to the Economic Policy Institute. A 2021 analysis found that gap has widened, to 351 times as much as the average worker. Compensation for top executives has soared nearly 1,300 percent in he past four decades, after adjusting for inflation. The study found that average pay for top businesses leaders at the country’s 350 largest companies was $24.2 million in 2020, when the realized value of stock options are factored in.
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 on raising the floor to upward of $15.
Price was 19 when he started Gravity Payments in 2004 out of his dorm room at Seattle Pacific University, using seed money from Lucas Price, according to the Times. The now 38-year-old has authored a 2020 book entitled “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, championing his company’s treatment of workers as a model that allowed staff to decide how to confront the economic shocks during the early months of the pandemic.
He also wrote that 98 percent of Gravity Payments employees volunteered to temporarily cut their pay from 5 to 100 percent to avoid layoffs. On Wednesday, Price said the company has never laid off a single employee in its 18-year history.
The company’s chief operating officer, Tammi Kroll, has stepped in as CEO, Price said in his announcement.
“The company supports his decision to step aside,” Kroll said in a statement. “I am grateful for the opportunity to lead Gravity through this new chapter.”
Go to Publisher: Technology
Author: Hamza Shaban