Hello Reader,

This isn’t the kind of territory I normally wade into, but I feel like it needs to be said. The way companies manage payroll—and the way pay gets distributed between executives and frontline workers—is deeply out of balance.

You may have seen the headlines about strikes. The most recent that caught my eye was the Air Canada flight attendants’ strike. These are people who face customers every single day, manage the stresses of irregular hours and demanding environments, and carry the responsibility of safety in the skies. And yet, they had to walk off the job to demand wage adjustments that keep pace with the cost of living.

Meanwhile, at the very top, executives earn compensation packages in the millions. I’ve seen it before: stock options, performance bonuses, base salaries that rival entire departmental budgets. The argument from leadership is always the same—“we need to pay for top talent or we’ll lose them.”

But here’s the problem: That imbalance doesn’t just sit at the top.

It ripples downward—to the workers who are told there’s no money left, and to the customers who see rising costs passed directly to them.

A Different Model

I’ve seen firsthand how payroll is often treated as “controllable.” In most companies, if numbers don’t add up, the first lever pulled isn’t efficiencies at the top — it’s payroll at the bottom. Hours get cut. Raises get delayed. Staff are stretched thinner. Meanwhile, executive compensation stays protected.

But it doesn’t have to be this way.

Costco (where I once worked and later moved into management) proved that payroll can be an investment. They’ve long been recognized for paying frontline employees above industry average and for promoting from within. That approach paid off in retention, morale, and growth. In Costco’s case, payroll wasn’t a liability to be trimmed... it was a foundation to build on.

Another case comes from Ben & Jerry’s. For years, the company held itself to a strict ratio: no executive could earn more than five times the salary of the lowest-paid worker. Some dismissed this as idealistic, even “woke.” But it wasn’t just a moral statement — it was a strategic choice. That policy built loyalty, reinforced culture, and made sure success was shared. (The ratio shifted after Unilever acquired them, but the original idea still stands as proof of what’s possible when leadership commits to balance.)

And if you zoom out globally, look at Japan. Executive pay there is far more modest compared to North America. In many companies, CEOs earn 10–20x what a frontline worker earns, compared to 300–400x in the U.S. That difference isn’t just about numbers — it reflects a cultural value system where balance, community, and long-term sustainability carry weight. It’s tied to concepts like ikigai — a sense of purpose that informs both personal and professional life.

Three very different contexts. Three different industries. One common thread: when payroll is treated as an investment instead of a cost, the returns are stronger and more sustainable.

What if We Flipped It?

What if clawbacks at the highest levels were the first lever pulled, not the last resort?

Here’s the scenario I imagine: instead of announcing mass layoffs to “protect the business,” an executive team agrees that any compensation above a certain threshold gets partially clawed back into a payroll pool. Those funds don’t vanish—they get redistributed to stabilize jobs and wages across the organization.

That redistribution could even be tied to performance goals. Imagine if the annual bonus wasn’t just concentrated in the boardroom but spread across the entire workforce, triggered by hitting key benchmarks:

• Customer satisfaction scores
• Safety records
• Operational efficiency
• Revenue growth

Wouldn’t morale be higher if everyone knew they had a stake in success, not just a select few?

Because here’s the irony: When morale is low, service suffers. When service suffers, customers notice. And when customers notice, revenue falls. The very thing executive bonuses are meant to protect ends up undermined by the system that hoards them.

We already have proof that alternatives work.

Proof It Can Work

Take the story of Dan Price in Seattle. He famously cut his own $1M salary to raise every employee’s minimum wage to $70,000. Critics called him reckless. Business commentators said the company would collapse under the weight of “unearned” salaries.

What happened? Revenues tripled. Retention skyrocketed. Employees bought homes, started families, paid off debts, and built lives that made them more loyal to their work. Customers noticed too—Gravity Payments’ reputation grew stronger, attracting new business rather than repelling it.

This wasn’t charity. It was strategy.

It was the recognition that payroll is more than a cost—it’s an investment.

Now, some will argue: “But you can’t expect executives to stick around if you claw back their pay. They’ll leave for competitors.”

And maybe some would. But here’s what’s changed: in a world where AI and automation are handling more of the forecasting, analysis, and decision-support that once justified those million-dollar salaries, the “scarce genius at the top” argument holds less weight. The brain drain risk isn’t what it used to be.

Meanwhile, frontline work remains human. You can’t automate empathy. You can’t replace a flight attendant’s calm voice in turbulence or the extra care a warehouse worker brings to a safety check. Those roles may not carry stock options, but they carry trust. And that’s worth more than any spreadsheet can show.

The Bigger Question

So the question is not: “Can we afford to rebalance payroll?”

The question is: “Can we afford not to?”

If every strike, every walkout, every disengaged worker costs a company reputation, stability, and customers, then the real risk lies in doing nothing.

Over the next few weeks, I’m going to pull on this thread. We’ll explore how productivity tilts toward what’s easy to measure, why quality—though subjective—matters just as much, and how generations have experienced these imbalances differently. And of course, we’ll bring this back to a theme you’ve heard me talk about before: productiveness.

For now, though, I want to leave you with this...

Payroll is not just a cost center. It’s a reflection of what a company values most.

If executives are insulated while frontline workers are expendable, that says something. But so does the opposite.

Your Turn

Now... I’d love to hear from you.

When you think about your own workplace, do you see payroll as an investment—or just a cost? And since this is a bit of a departure from my usual writing, let me know if you find it valuable for me to explore topics like this... or if you’d prefer I stick closer to the areas I normally cover. Just hit reply. I genuinely want to hear your thoughts.

– Mike

P.S. Today I wrote about balance inside companies, and on Friday I’ll be digging into why quantity so often gets prioritized over quality—simply because it’s easier to measure. In the meantime, if you’re in the coaching world, there’s an event coming up that might interest you: The Next Level Coach Summit, Sept 9–11. Past podcast guest John Meese will be there, along with other experts in the field. If building a business that scales sustainably without sacrificing what matters is on your mind, this could be worth checking out. You can learn more here.​

​