Published on: July 8, 2025 at 9:51 pm
The widening wealth gap creates dissatisfaction, instability, and unrest for the general population. At the end of last year, the richest half of American families owned nearly 98% of the country’s wealth, according to U.S. Federal Reserve data. The wealth of the top 0.1%—about 133,000 households—ballooned by more than $6 trillion during the previous four years.
Academy of Management Scholar Jaqueline “Jackie” Coyle-Shapiro of California State University, San Bernardino, and the London School of Economics (LSE), who cowrote an Academy of Management Journal article on this topic with Ephrat Livne-Ofer of LSE and Jone Pearce of the University of California, Irvine, said that organizations’ leaders need to ask themselves to what extent they are igniting anger among stakeholders, fueling the notion of corporate greed, and exploiting employees via their own salary increases and bonuses.
“Leaders need to pause and reflect and ask themselves, ‘Am I really worth $5 million a year in terms of salary plus a generous bonus, given that, at the lower levels of the organization, employees are barely surviving with their salary?’” Coyle-Shapiro said. “It goes down to leaders thinking and having the integrity and the ethics to stop and think, ‘What am I contributing to in my organization? Am I allowing lower-ranking staff to be underpaid, or am I fueling greed by having a huge salary, and who’s paying the price for that?’”
Coyle-Shapiro notes that we rarely hear about top leaders taking a salary cut or foregoing a bonus. On the contrary, even CEOs who fail spectacularly are often given lucrative golden parachutes after they’re fired, even at many companies that do not pay severance to laid off employees.
“When times get tough, they cut people lower down the ranks or [in the] middle ranks,” Coyle-Shapiro said. “The top people never take a pay cut.
“Think about the power that would have for a CEO to say, ‘Times are tough. We’re all going to share the sacrifice of getting through these tough times. And to reflect my commitment, I am going to take a 20% pay cut, and I’m asking employees to take a 5% pay cut,’” she said.
“That’s quite powerful in terms of a leader behaving in a way that’s ethical and that they’re sharing the sacrifice, and we don’t hear of leaders doing that—at least, it’s very rare.”
