Dan Price is best known for being the CEO who decided his employees should earn a minimum wage of $70,000. He grew up as a socially-awkward kid due to being homeschooled thus took refuge in music. Price started a band, and by the time he was in eighth grade, some labels wanted to sign him and his friends. However, the drummer quit, and the band dissolved, leaving Price to focus on work; he is now the Gravity Payments CEO. Dan Price’s net worth is estimated at $12 million, and here is how he achieved it.
Venturing in the Credit Card Industry
Price was raised alongside five siblings in Idaho. He disclosed to Forbes that he grew up in a conservative family that instilled the idea of service from a young age. It is, therefore, no wonder that Price’s mother was among the first people in their neighborhood to recycle in the 1980s. The entrepreneur also started a rock band, Straightforward, when he was 12. The band aimed at encouraging and helping people. Price was set on becoming independent from an early age so, at 13, he got his first job installing HVAC systems. The entrepreneur then moved on to more formal employment by becoming a lifeguard, a busy boy, and a prep cook at Outback Steakhouse.
At school, Price had the reputation of a student who did not like to follow rules. As a result, he earned the title “Most Likely to Make a Teacher Retire” due to his stubbornness. On the other hand, Business Journal enlightens us that he also was well known for being gifted at reading people well enough to get under their skin. He could also make people feel comfortable, a trait that would come in handy later in life when he established his business. Price’s rock band usually performed at a local coffee shop, Moxie Java, whose owner, Heather, constantly complained about the high cost of processing credit cards. The CEO began wondering what he could do to alleviate the problem that Heather experienced. As luck would have it, Price’s father, Ron, got a job in the credit card industry, and Price began working for his father during his free time. While there, he learned the ropes of the credit card industry, and the skills enabled him to help Heather out with her credit card processing issues. He must have done an exemplary job because Heather referred 200 other business owners who experienced the same problems to Price. According to My North West, Price began building what would be Gravity Payments during his junior year of high school. In 2003, he joined Seattle Pacific University, and a year later, he and his brother, Lucas, partnered up to establish Price and Price LLC on February 4, 2004. The company would later change its name to become Gravity Payments.
Minting Millions from Gravity Payments
Gravity Payments had humble beginnings because Price started it while in college. He disclosed that he had to work from his dorm room and took calls from the closet. However, he later requested Seattle Pacific University’s alumni publication to find him a quiet place to receive customer calls. As if that was not challenging enough, the brothers had their first lawsuit four months after starting the company. In June 2004, Axia sued Price and Price LLC, accusing the company of soliciting Axia merchants and customers to leave Axia. The brothers overcame the hurdles, and the business flourished to facilitate an extravagant lifestyle for Price. By 2008 when the financial crisis hit, Gravity Payments was making enough profits to stay afloat. By 2012, the company had become so profitable that, according to Hundred Eight Degrees, Price paid himself between $1.5 million and $3 million every year. The salary was too high that the business almost went under. It was no surprise considering that industry giants still paid the CEOs much less. For instance, PayPros, which had three times the number of clients that Gravity Payments served, paid the CEO a third of Price’s salary. Price could afford to buy a home in the Magnolia neighborhood for $2 million. He also owned a yacht estimated at $300, 000 and other properties. However, Price had a change of heart regarding what amount to take home. After reading a 2010 study by Angus Deaton and Daniel Kahneman that claimed high income improves life evaluation but not emotional well-being. The paper alleged that peak emotional well-being is attained at a $75,000 salary. Furthermore, during a hike with a friend, she shared how challenging life was at her meager salary, while he was earning millions. Therefore, he decided to set a minimum annual wage of $70,000 and take a pay cut.
Mistakes That Could Have Cost Him Lots of Money
While the move should have been applauded, it was met with mixed reactions. Some nicknamed Price “Robin Hood,” but others felt it was a charade, especially when they considered how the salary increment was announced to the employees and the public. It was well-orchestrated. According to Esquire, the increment also earned Price a $500,000-book deal and five-figure speaking engagement. Unfortunately, these came crashing down when his ex-wife, Kristie, accused him of domestic abuse when they were married. His brother also sued him for minority shareholder oppression. Lucas demanded $26 million, but Price said he could not afford to buy out his brother, yet the company had been valued at $81 million. Price won against his brother and denied ever abusing his wife. Six years later, the modern-day Robin Hood was accused of drugging and raping a woman at a hotel. It appears that Price would rather tarnish his reputation than lose money. His arrogance is clear when he said his father is an entrepreneur who never really made it despite working so hard. It is such a crude way of appreciating the man who taught him all he knows about credit card processing. All the same, the apple does not fall far from the tree. Like Price’s employees claim that he underpaid them so he could pocket more, Ron also scammed consumers through an illegal pyramid scheme that operated from the late 1980s to 2000.
Written by Allen Lee
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