Gravity Payments CEO Dan Price resigns over assault charges

Gravity Payments CEO Dan Price resigns over assault charges

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The Seattle CEO, who became nationally known for setting a minimum salary of $70,000 for all his employees and cutting his own salary accordingly, has resigned from the company he founded while in college misconduct and assault.

Dan Price said he is resigning from Gravity Payments, a credit card processing company, to devote more time to “fighting false allegations”.

“My number one priority is that our employees work for the best company in the world, but being here has become a distraction,” he wrote in an email to employees, which he also shared on Twitter Wednesday night. “I also need to step away from those duties to fully focus on fighting false allegations being leveled against me,” adding, “I’m not going anywhere.”

Price did not address the allegations Thursday, nor did he respond to a request for comment. But later that evening, the New York Times ran a report claiming the CEO had used his online fame to cover up “a pattern of abuse in his personal life and hostile behavior at his company.” The report, which has not been independently verified by The Post, claimed it had stalked women online “who say he hurt them both physically and emotionally”.

In a statement to The Times, Price said he “never physically or sexually abused anyone” and “the other allegations of inappropriate behavior towards women in this story are simply untrue.”

Earlier this year, Price was charged with fourth-degree assault and reckless driving after prosecutors claimed he tried to kiss a woman in his car after dinner, according to the Seattle Times. When she refused, Price allegedly drove to a North Seattle parking lot, where he made “donuts” with her in the car.

His attorney entered a not-guilty plea in Seattle City Court in May.

A frequent critic of company executives and the wide pay gap between them and their workers, Price gained national recognition in 2015 after announcing he would raise all employees’ salaries to at least $70,000. At the time, its 120 employees were earning an average salary of $48,000 a year, according to the Times.

He also reduced his own compensation from $1 million to that minimum amount, took a pay cut of more than 90 percent and tapped into about three-quarters of that year’s profit to cover higher wages, the report added. Price said at the time that he would keep his salary low until profits were recouped.

The price often turned on Social media to promote the success of his business model. His Twitter posts are airy, in contrast to executives’ often stilted posts, and offer his 770,000 followers an online personality that mixes labor activist with work-life balance influencer. He often preaches fair-minded bosses and companies. The minimum wage for gravity workers is now $80,000, he’s found, and the company is offering unlimited paid time off. Job openings typically attract more than 300 applicants, he said.

Prior to the resignation announcement, he tweeted about layoffs, proclaiming, “A really good CEO would never layoff.”

The original salary floor was set the same year Price won a lawsuit against his brother Lucas Price. A three-week court battle ensued after Lucas Price claimed his rights as a minority shareholder had been violated when Dan Price increased his own salary. A King County court disagreed, ordering Lucas Price to pay his brother’s legal fees totaling $1.3 million.

Price’s profile rose as a broader conversation about wage inequality and economic inequality unfolded, with American corporations and their highly paid executives often taking the brunt of the criticism.

In 2015, when Price cut his salary, the country’s CEOs were raking in 276 times the annual salary of a typical worker, according to the Economic Policy Institute. A 2021 analysis found the gap has widened to 351 times that of the average worker. Compensation for top executives has increased nearly 1,300 percent over the past four decades, adjusted for inflation. The study found that the average compensation for top corporate executives in the country’s 350 largest companies was $24.2 million in 2020 when the realized value of stock options is factored in.

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

Perspective: My employees accepted wage cuts instead of layoffs. We’re better than ever.

Price was 19 when he founded Gravity Payments from his dorm room at Seattle Pacific University in 2004, using seed capital from Lucas Price, according to the Times. The 38-year-old authored a book in 2020 called 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 article for The Post, championing his company’s treatment of workers as a model that enabled employees to choose how to face the economic shocks in the first months of the pandemic.

He also wrote that 98 percent of Gravity Payments employees volunteered to temporarily cut their pay from 5 percent 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. “The company supports his decision to step down,” she said in a statement.