Americans have long been dissatisfied with growing pay gaps between CEOs and employees. Now, researchers say that this tension can generate internal discontent and even increase the likelihood of corporate whistleblowing.
CEO-employee pay disparities erode employee loyalty and lead to greater worker “willingness” to inform on their companies, according to a recent study from researchers at the University of Texas at Dallas. In companies with more significant pay disparities—especially when individuals believed they could find work elsewhere—employees were significantly more likely to report on their companies. The driving force behind that is perceived unfairness, according to Dr. Riki Takeuchi, a professor at the University of Texas and an author of the study.
“We are now more concerned about corporate social responsibility and community,” he says. “Firms who are seen as more sensitive to their impact on their environment or their community are considered to be a much better place to work. This also includes how employees are compensated and how they are being treated.”
The study’s findings are reflected in several high profile instances of whistleblowing. At Boeing, CEO Dave Calhoun was awarded a $33 million pay package while employees allegedly faced mistreatment and retaliation for raising safety and quality concerns. Calhoun was eventually pushed out of the top role after multiple whistleblowers came forward, and the company faced heated Senate hearings last year and...
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