Business

Seattle CEO who promised $70,000 salaries wins suit filed by brother

By REED ABELSON

New York Times News Service

Dan Price, the chief executive of Gravity Payments, clashed with his brother Lucas over salaries.
Dan Price, the chief executive of Gravity Payments, clashed with his brother Lucas over salaries. NYT

Dan Price, a Nampa native and chief executive of a small Seattle company who promised last year to pay every one of his workers at least $70,000 a year, has won a court battle with his brother.

Judge Theresa B. Doyle of Superior Court in King County, Washington, ruled Friday that Dan’s brother, Lucas, had failed to prove his claims that Dan had overpaid himself and inappropriately used a corporate credit card for personal expenses. The judge also ordered Lucas Price to pay Dan Price’s legal fees.

Dan Price had come to symbolize one executive’s stand against the widening gap between workers’ pay and executive compensation. “The market rate for me as a CEO compared to a regular person is ridiculous, it’s absurd,” Price said then. He described himself as a man with simple tastes and whose extravagances ran to snowboarding and picking up the occasional bar bill.

The lawsuit offered a glimpse into what the judge called “the volatility and downward spiraling” of the brothers’ relationship. The two founded Gravity Payments, a fast-growing privately held credit-card payment processing company, in 2004. By 2008, the brothers had agreed to restructure the company so that Dan Price would have a majority share and serve as its chief executive. Lucas Price would no longer be involved in the day-to-day management but would retain an interest in Gravity Payments as a minority shareholder.

In recent years, the brothers have sparred over how to compensate Dan Price and how to pay dividends to shareholders. When Dan Price announced his plan to pay everyone at Gravity Payments a minimum salary of $70,000, his brother objected, saying he was not informed of the decision until shortly before it was made public. A company spokesman said the lawsuit was filed two weeks after Dan Price announced the salary plan, which brought the company an unexpected crush of attention.

Lucas Price’s lawyer, Gregory J. Hollon, had argued that Dan Price had failed to meet the terms of the agreement reached when the brothers decided to restructure the company. “This is an unfortunate and troubling story of ego, resentment and an unwillingness of Dan Price to live with a deal he and his brother struck in 2008,” Hollon said, according to an article in The Seattle Times.

In a statement on Sunday, Lucas Price said: “I am shocked and disappointed with the decision and I will be considering my options.”

Dan Price praised the ruling in a statement posted to his Facebook page but also emphasized his ties to his brother. “My love for my brother is unconditional,” he said, noting his brother’s “incredibly valuable role” in creating Gravity Payments.

“I’m thankful for the opportunity to put this challenging time behind us,” he said.

The Prices are sons of Ron Price, a Nampa business consultant.

The Idaho Statesman contributed.

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