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Some European nations have already started taking action by introducing laws that cap executive pay and incorporate employee board members. Companies like Volkswagen have reduced the salary of their CEO, even though profits are hitting record highs. Similar efforts are being made all over the continent in hopes of reducing high turnover, low morale, and employee strikes. The International Monetary Fund has also recognized the benefits from regulating massive bonuses, noting that such measures would induce “faster and more durable growth.”
Some notable CEOs have taken action as well in an attempt to balance pay distribution. Facebook’s Mark Zuckerberg is one of the CEOs supporting the idea by earning a $1 salary, an idea first suggested by Apple’s co-founder Steve Jobs. Even though Zuckerberg controls majority ownership of the company, the $1 annual salary is a strong indicator he and other $1 CEOs are committed to tying their financial fates to the success of the company.
This recent scrutiny is a sign of the times, as businesses and policy makers alike are being called upon to help close the pay gap. Only time will tell if a cooperative effort is put forth in order to bridge this great divide.
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