Lucas Price is a shareholder in the business.
By Raif Karerat
WASHINGTON, DC: Dan Price, chief executive of Seattle-based Gravity Payments, grabbed headlines earlier this year when he enacted a $70,000 annual minimum wage for every employee working under the company while slashing his own salary. For a quarter of Gravity’s workforce, the increased minimum wage nearly doubled their income.
Now he is reportedly being sued by his brother, Lucas Price, who is a minority shareholder in the business.
Lucas Price, co-founder and director of Gravity Payments, accuses his brother, co-founder and CEO Dan Price, of violating Lucas’ rights as minority shareholder and breaching duties and contracts, according to court records.
The complaints were initially signed March 13 and filed April 24, 11 days after Dan Price announced the pay raises, reported the Seattle Times. Attorney Greg Hollon, who represents Lucas Price, said that while that wage announcement may play a role in future proceedings, it does not relate directly to the lawsuit.
“It was an aggregation of events over the course of years,” said Hollon.
Per The Times:
According to the documents, the brothers founded Price & Price as a merchant-services company in 2004. Dan Price became CEO in 2006. Amid disagreements between the brothers, they restructured it into a new company, Gravity Payments, in 2008.
The company, which processed $6.5 billion in transactions for more than 12,000 businesses last year, employs 120 people.
During the restructuring, Lucas Price agreed to a minority interest and a reduced employee role, which let Dan Price continue as CEO. In the process, the brothers entered into several contracts, which limited Dan’s compensation as a CEO and protected Lucas’ minority-shareholder rights, court records show.
With his lawsuit, Lucas Price is claiming his brother excessively paid himself and deprived Lucas Price of his minority-shareholder benefits. According to media reports, Dan Price was paying himself nearly $1 million a year before announcing he would cut his pay to $70,000 to help Gravity raise the pay of its employees to $70,000 over the next three years.
A trial is set for May 3, 2016, according to the Associated Press.