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Three months ago, Mr. Price, 31, announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it.
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More troubling, a few customers, dismayed by what they viewed as a political statement, withdrew their business. Others, anticipating a fee increase — despite repeated assurances to the contrary — also left. While dozens of new clients, inspired by Mr. Price’s announcement, were signing up, those accounts will not start paying off for at least another year. To handle the flood, he has already had to hire a dozen additional employees — now at a significantly higher cost — and is struggling to figure out whether more are needed without knowing for certain how long the bonanza will last.
Two of Mr. Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. Some friends and associates in Seattle’s close-knit entrepreneurial network were also piqued that Mr. Price’s action made them look stingy in front of their own employees.
Then potentially the worst blow of all: Less than two weeks after the announcement, Mr. Price’s older brother and Gravity co-founder, Lucas Price, citing longstanding differences, filed a lawsuit that potentially threatened the company’s very existence. With legal bills quickly mounting and most of his own paycheck and last year’s $2.2 million in profits plowed into the salary increases, Dan Price said, “We don’t have a margin of error to pay those legal fees.”
Two of Mr. Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. Some friends and associates in Seattle’s close-knit entrepreneurial network were also piqued that Mr. Price’s action made them look stingy in front of their own employees.
mmm, minimum wage argument the left claim would never happen
It's their company, they have the right to run it anyway they want (assuming they aren't getting tax payer funds for experiments, aka, Solyndra).
The owner learned some hard lessons. One that people who do more work or have worked hard to achieve higher positions don't like to make the same or similar salaries as people who haven't.
And two, when something goes wrong, you can easily adjust your own salary for a year or two to help keep the company afloat, but you can't significantly lower the salaries of all of your employees without causing major harm to your company, so you are between a rock and a hard place.
I'm certainly not a liberal but it sounds like a lot of jealousy. The mentality of a lot of people is they would turn down a raise if it meant their coworkers got one too. They're not as concerned about what they're getting as they are what others are. Crabs in a barrel.
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