Decision has forced CEO to rent out his own home in effort to stay afloat.
Dan Price, the CEO of Gravity Payments recently made headlines by declaring his company would raise its employees to a minimum salary of $70,000, says the decision has caused him to fall on hard times.
Price, according to a report on Fox News, is renting out his own house in an attempt to make ends meet. This is just three months after the announcement that all 120 employees of the credit card processing firm would receive raises to the minimum.
The move cost him a few of his good customers and two of his “most valued” employees, who left the firm because many new employees received larger pay hikes than older employees.
Some customers apparently took their business elsewhere because they feared the new salary scale would make their costs rise, and others thought he was making a political statement.
Price was being branded as a socialist for his stance, even while he was taking some of the money from his own $1 million pay package to help finance the move. He admitted he was doing it to address the wealth gap.
The company has generated business from dozens of other clients that were inspired by the plan, but won’t reap the benefits of the new business until at least next year. Price just hopes he can hang on until that time.
Price is also facing a lawsuit filed by his older brother, Lucas. The suit, alleging the CEO took millions of dollars out of the company while denying him benefits from his 30 percent minority ownership, was filed two weeks after the salary announcement. The resulting legal fees are draining the profits of the company, along with the increased salary costs.
Some business owners in the Seattle area, already concerned about the recent minimum wage increases, feel like the minimum salary levels at Gravity made it harder for them to compete for workers.