The Executive Pay Gap: Why Leaders Reward Themselves While Freezing Team Salaries
Are you ready for a truth you might not want to hear?
Have you ever wondered why your paycheck stays the same while the boss announces another bonus? Why do teams sacrifice in “crisis,” yet executives seem unaffected? The answer is the executive pay gap.
This isn’t a statistic. It’s a wound in the trust between leaders and teams. If you’re a manager today, think about this: Are you part of the problem, or are you trying a new approach?
The numbers don't lie
Let’s be honest. The Economic Policy Institute reports that CEO pay has jumped by 1,460% since 1978. In contrast, typical worker pay has increased by 18%. That’s the executive pay gap.
Harvard Business Review warns that companies ignoring pay disparity risk losing top talent. Millennials and Gen Z value fairness and transparency (HBR).
This isn’t a US issue. In Europe, luxury brands like LVMH are seeing record profits. Meanwhile, many retail workers are getting only small inflation adjustments. The executive pay gap is a global concern.
Why this matters to you? EXECUTIVE PAY GAP
Here’s the hard truth: If you back the executive pay gap, you care more about your lifestyle than your employees’ loyalty.
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Saying “no budget for raises” while approving an executive bonus breeds resentment.
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Promising “shared sacrifice” but only applying it to the lower ranks breaks trust.
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Celebrating shareholder value while ignoring your people’s living costs widens the divide.
The outcome? Quiet quitting, disengagement, and eventually — resignation.
“Leadership isn’t measured by bonuses, but by fairness.”
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Lessons from popular leadership books (and why they miss the mark)
Take Jim Collins’ Good to Great. He talks about getting “the right people on the bus.” But what if those “right people” never get a fair share of the ticket? The book offers minimal coverage of compensation justice. Leadership shares vision and values, but the pay gap shows that greatness often ends at the top.
Even in Steve Jobs' biographies, we admire his design obsession. Yet, Apple has faced criticism for its global supply chain labour practices. Inspiration cannot erase injustice.
The hard truth? You can’t build greatness on inequity.
The Human Side of the Executive Pay Gap
Millennials and Gen Z are calling it out. Unlike previous generations, they won’t accept, “This is how business works.”
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Millennials: They want transparency in salaries and alignment with their values.
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Gen Z: They’ll question your executive pay gap and share their views on TikTok and Glassdoor.
If you think you can manage them with control, you’ve lost. Today’s leadership needs empathy, transparency, and fairness in pay.
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How leaders can change the narrative? EXECUTIVE PAY GAP
What can you do if you don’t want to be another example of broken leadership?
Here are 5 actions you can take today:
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Close the transparency gap: publish salary ranges. Inform your team how you make decisions.
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Cap executive bonuses. Link them to employee satisfaction and retention, not shareholder value.
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Make pay linked to performance at every level. If the company does well, everyone benefits — not just the top.
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Model the sacrifice you expect: If cuts are necessary, begin with the executive level.
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Listen before you lecture: use town halls, surveys, and 1:1s to hear your employees. Their honesty might surprise you.
“The true measure of leadership isn’t the size of your bonus, it’s the fairness you bring to your team. The executive pay gap reveals more than numbers – it shows whether leaders value their people or just themselves. While salaries at the top keep rising, many employees are left behind. That’s not strategy; it’s a failure of trust. Real leaders share success, model sacrifice, and prove that loyalty goes both ways. Because in the end, history doesn’t remember your paycheck, but how you treated those who built it with you.”
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A real-world example: EXECUTIVE PAY GAP
In 2020, Dan Price, CEO of Gravity Payments, cut his own salary to raise employees’ least wage to $70,000. Critics called him naïve. Years later, retention and productivity soared, and the company grew.
Now contrast that with firms where CEOs earn 300–400 times more than the average worker. Which company would you prefer to work for?
The executive pay gap isn’t unfair; it’s bad business.
Humour Break: The “Leadership Math” Problem
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Worker asks for €200 raise → “Sorry, no budget.”
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CEO approves €2,000,000 bonus → “It’s necessary to attract top talent.”
That’s not strategy. That’s hypocrisy. Employees see through it.
Summary: EXECUTIVE PAY GAP
The executive pay gap is not about numbers. It’s about trust, culture, and the future of work. Leaders who reward themselves while freezing salaries send one clear message: wedon’t care. In 2025, that message is unsustainable.
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Final Statement
If you care about leadership, you can’t ignore the executive pay gap. You have a choice: defend outdated systems or build a culture where fairness fuels growth. History will remember how you treated your people, not the size of your bonus.
Frequently Asked Questions: EXECUTIVE PAY GAP
Why is the executive pay gap so big?
Because executive pay often ties to stock performance, and boards follow peer benchmarks. It’s a cycle that rewards the top.
Does closing the executive pay gap really matter?
Yes. Companies with fairer pay structures report higher retention, better morale, and stronger reputations.
Isn’t it normal for CEOs to earn more?
Yes. But when the ratio goes from 20:1 to 400:1, it shifts from leadership to greed.
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