Close this search box.
Close this search box.

Is Now the Time for CEOs to Increase Employee Pay?

As American workers continue to voice growing discontent about income inequality and stagnant wages, some CEOs are voluntarily raising employee pay on principle. They say doing so not only improves morale and employee satisfaction but also serves as a long-term investment to better their workforce.

Jamie Dimon raising employee pay

JPMorgan Chase CEO Jamie Dimon told the The New York Times in mid-July that the company will lift employee pay for 18,000 staff members from $10.15 per hour to between $12 and $16.50 per hour, depending on geographic and market forces. Dimon said the pay increase is the “right thing to do” and that it will “enable more people to begin to share in the rewards of economic growth.”

Starbucks CEO Howard Schulz said in a similar message on July 11 that it would be giving its workforce a 5% across-the-board raise in October. The company also announced it would be adding a future annual enhancement to its stock option program, doubling the annual award for partners that reach two years of continuous service in the company. The combined compensation increases would amount to raises of up to 15% for some employees.

“Striking the delicate balance between profit and a social conscience is a responsibility I take personally, said Schultz. “Over the years, we have viewed our total compensation approach as the best way to create long-term opportunity for partners.”

Dimon said that raising wages is good for the company and helps Chase attract and retain talented people in a competitive environment. He said that higher wages are “good expenses” and “an investment” that will improve long-term prospects.

“There’s no easy solution to raise wages and increase profits at the same time—it’s just not going to happen.”

He also acknowledged that not every business can afford to raise wages. Yet, he encourages these companies to find local partners to address economic inequality and to provide continuous training, and identify mentors to help sharpen employee skills. Chase will also invest more than $200 million in 2016 to train thousands of entry level employees in its consumer banking business.

A number of other large employers have raised wages in recent years, often citing market forces. Walmart announced in January 2016 that more than 1.2 million of its workers would receive pay raises as part of its two-year investment in its workforce. In April 2015, health insurer Aetna announced it would raise wages for the lowest paid workers to $16 per hour. CEO Mark Bertolini said he believes the raise can eventually pay for itself by making workers more productive. Aetna employee Fabian Arredondo told NPR that with finance being one of the main stresses in people’s lives, a little boost can go a long way in employee happiness.

Certainly, not all executives and economists share the enthusiasm for raising wages. Alex Tabarrok, an economist at George Mason University, told NPR that he’s skeptical of raising wages as a solution to increasing productivity. He says most firms already calculate what wages are optimal for attaining the highest productivity. “There’s no easy solution to raise wages and increase profits at the same time—it’s just not going to happen,” said Tabarrok.

Those in industries that rely on low-cost labor and argue against raising the minimum wage are unlikely to voluntarily raise wages anytime soon. Former McDonald’s CEO Edward Rensi told Fox Business Network in May that employers would be more productive by cutting the workforce or looking for more cost-cutting measures as opposed to raising wages. “It’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging French fries,” said Rensi.



  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.