What’s wrong with a CEO cutting pay?

The big news stories over the past week fall into two clear camps.

Looking at them together shows just how divided a society we have become.

There are those talking about low pay and the living wage.
(Read: The living wage is a matter of dignity)

And those covering excessive executive pay.
(Read: Tribune CEO Liguori’s Pay Rises to $23million)
(Read: Fat cat fund managers rake in rewards as savers plough more money into pension pots and investment funds)

The great divide between the pay at the top and at the bottom has gotten so huge that few people can stomach it anymore.

Even CEOs are moved to act.

First up is US-based Gravity CEO Dan Price.

Some have heavily criticised him for cutting his pay to give his each of his staff a $70,000 annual minimum wage.
View video interview with Dan

The objections come from those who believe wages should be purely market driven.
(Read: Praise and skepticism as one executive sets minimum wage to $70,000 a year)

Others applauded him.
(Read: Ehe CEO who increased the minimum salary at his company to $70,000 is highlighting an important point about money and happiness)

Dan isn’t the only one promising to dip his hand in his own pocket to help the lower paid.

Retailer Next’s chief executive Lord Wolfson has pledged to give shopfloor staff a pay rise of at least 5%, offering to share his bonus among employees should there be a funding shortfall.
(Read: Next pledges 5% pay rise for employees)

Can we hope that other CEOs, their remuneration committees and consultants as well as shareholders finally say: enough is enough!?

Of course those who take greater risks and greater responsibilities or who have rarer talents deserve to earn higher salaries.

But rewarding of millions of pounds or dollars a year for CEOs is completely over the top. Especially when you consider that at the bottom of the pay scale, full time workers can’t even afford to live off what they earn.

All staff contribute to the success of a company, so I believe rewards should be more fairly shared. Not just put into the hands of the few.

Do you agree? Let me know.