On average, CEO salaries are 300 times more than those of the average worker. That’s great news for members of the C-suite. For those with their eyes on the corner office, the large, padded paycheck is the ultimate motivation. But, for the low-level employee making equal to or just above minimum wage it can be a point of contention and something that seems unattainable.

The CEO-employee pay gap is a polarizing topic. High CEO salaries help corporations remain competitive and attract top talent to run their organizations. After all, CEO is a “terminal” position. Most people aim to retire from a CEO position and want to go out on top with a big paycheck; former CEOs seldom go on to hold that title at multiple companies. High salaries can also be viewed as excessive by those inside and outside the company and a point of criticism, especially when some employees live paycheck to paycheck. The question remains though – do high CEO salaries help or harm a company and its employee morale?  

To answer this question, there are several others that need to be considered first. What industry is the company in? Are the majority of workers skilled or unskilled? How significant is the gap? Are employees aware of the gap?

For industries constantly in the spotlight whenever minimum wage discussions arise such as retail and fast food, the difference is staggering and can have a negative impact. For fast food workers, the pay gap is front of mind. Last year, for example, the CEO of McDonald’s got a performance bonus of $23 million. Meanwhile, the average employee makes $7.25 an hour. For those in the fast food industry working full time and still in need of financial assistance, it is particularly demoralizing to see a CEO walking away with such a big payout. The situation is exacerbated when the company isn’t performing well and the CEO still benefits.

But not all companies who employ minimum wage workers and have highly paid CEOs are viewed unfavorably by the average employee. Starbucks is one company that has figured out how to strike the right balance with its employees. While some of its employees are paid minimum wage, they lessen the sting of a gap by offering non-cash incentives, such as tuition assistance, benefits, and paid vacation time to improve employee satisfaction. Even though employees aren’t paid high salaries, they feel valued and are happy to be there. The same can be said of Whole Foods. The grocery chain makes an effort to maintain a living wage for all its employees. Employees enjoy non-cash incentives such as maternity leave, work-life balance and benefits. 

Currently, since companies are not required to publically report on salaries, it’s common for employees to be unaware of the disparity of pay levels within their companies. That will change in the very near future. The new rule, mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, states that starting January 2017 all companies need to report the pay gap between CEOs and the everyday worker. This will certainly shine a light on the impact pay levels have on performance, motivation and overall job satisfaction. As companies begin to report on salaries it will be important to note what is revealed about CEO compensation, from the inclusion of cash to stock options, bonuses, etc.

Once numbers are revealed there will likely be a push by some to close the pay gap. The gap can be closed by either raising the pay of lower level employees, or reducing the pay of CEOs. It is actually easier to reduce a CEO’s pay since a portion of it comes in the form of non-cash options and can always be reinstated at a later time. But, once a raise is given to a lower level employee it is nearly impossible to take that raise back. Raising employees’ pay also has a greater impact on the overall operating expenses and cash flow of the organization.  It would actually increase a company’s operating leverage and make it less nimble, less able to react in a financial crisis. Raising pay cannot be the only tactic to close the gap. The problem needs to be addressed at a systemic level.

Rather than focusing on raising or lowering the dollar amount of salaries, for now, companies can focus on how they compensate employees and make them feel valued. Those that can and are willing to implement changes to the company culture are the ones that will increase employee satisfaction and close the gap without ever having to write a check.

Kristina Minnick is an associate professor of Finance and Gibbons Scholar at Bentley University.