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Megan McArdle

Paying Everyone $70,000? It Won't Start a Revolution

Flat salaries at Gravity are an experiment that can't become the norm.
Dan Price's experiment is worth watching, whatever its purpose.

Dan Price's experiment is worth watching, whatever its purpose.

Source: Gravity Payments

Remember the guy who decided to slash his own salary and pay all his employees $70,000 a year? How could you not? The man has been the subject of more laudatory news coverage than an Apple device. Conservatives have speculated that he would drive his company into bankruptcy; liberals have speculated that he represents a new, kinder capitalism. Karen Weise of Bloomberg Businessweek dug into the story, however, and found something much stranger.

Weise's extraordinary reporting should be read in full. Her dogged legwork revealed that the story of a boss who had an epiphany about the unfair nature of modern labor relations, and instituted a brand new model in the face of daunting obstacles, including a lawsuit from the brother who owns shares in his firm, may not be exactly what it seems. The lawsuit appears to have preceded the new salary policy, and may have been motivated not by Dan Price overpaying his workers, but by the salary that Price was paying himself, at the expense of his minority shareholder. This raises the possibility that the new pay scale may have been intended in part to spite his brother.