That CEO, who set $70K minimum pay, is being sued by his brother – IOTW Report

That CEO, who set $70K minimum pay, is being sued by his brother

Seattle Times— A Seattle CEO who received widespread recognition after announcing plans to raise his credit-card-processing company’s minimum salary to $70,000 is being sued by his brother, King County Superior Court documents show.

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. Attorney Greg Hollon, who represents Lucas Price, said that while that announcement may play a role in the proceedings, it does not relate directly to the lawsuit.

“It was an aggregation of events over the course of years,” said Hollon about the case. Lucas Price did not respond immediately to a request for comment.

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.

Lucas Price claims 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.

Court documents show that among other remedies, Lucas Price is asking the court to order Gravity to repurchase his shares and to provide a complete accounting of its transactions, financial affairs and financial records.

In a separate filing, Dan Price denied all complaints brought against him and said Lucas Price did not raise any concerns about executive compensation or his ownership benefits as a Gravity Payments director.

 “I know the decision to pay everyone a living wage is controversial,” said Dan Price during a phone interview.

“Although the decision was not entirely made for business reasons, my team and I are committed to making my vision a business success. I deeply regret the rift this has caused in my relationship with my brother, who I love, and I’m hoping and praying for a quick resolution that’s positive for everybody.”

A trial date is set for next May 3.

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