Morale and CEO Pay

My last post cited the WSJ article (April 30) that claims CEO pay is out of control and affecting employee morale.  Does CEO pay really disrupt morale?  Maybe, but I can think of more important reasons.  

First, being part of a losing team will impact morale.  When layoffs start, people and the press may grumble about the salary of the CEO.  They are grumbling because of the results of the company -- if the company is doing well the salary is practically irrelevant (just like the Celtics morale is high even though Garnett makes so much money).

Second, when people are working they are not likely to be thinking about the CEO's  salary unless there are other problems that are distracting them from working.  There are lots of units inside big companies that operate very well regardless of the CEO, salary and all.  People will commit to business goals even if they dislike corporate staff or the CEO.  Poor morale is caused by poor management below the CEO that cannot establish clear goals that allow people to succeed and use their skills.

Inflated CEO salaries are the rightful concern of Boards of Directors (as the agents for the shareholders).  For those doing the work I doubt it has the impact many would assume.