In the US, it is well established legal perspective that the CEO and the management can do pretty much anything they want if they can plausibly claim that it increases shareholder value. In this case, pushing higher employee salaries could plausibly lead to retaining more employees, attracting better talent, and so on - if the CEO had framed his arguments in this manner it would be open and shut.

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.