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Leadership

Leadership

CEO salaries at publicly held companies are already public information.  This seems like an overreach for obvious political reasons.

The real reason for the pay-ratio rule is that it can be used to pressure corporations with a large pay gap to rein in CEO bonuses. This means that the intention of the rule is more about addressing income inequality than protecting investors. Republican SEC Commissioner Daniel Gallagher criticized the rule, explaining, “Addressing income inequality is not the province of the SEC.” He called the rule an example of “social policy masquerading as disclosure requirements.”

Voluntary transparency, however, is a great thing. CEO’s should be more disclosing when they can. They have a lot of information that can improve employee and shareholder engagement.

The Securities and Exchange Commission finally approved a rule stemming from that 2010 Dodd-Frank Act that requires corporations to disclose the pay gap between their employees and the company’s CEO.

Supporters of the rule argue that shareholders should know how the company spends its money, including on CEO salaries. Investors need full information in order to make sound investment decisions. But CEO salaries are already public information.

via SEC Pay-Ratio Rule is Kiss of Death for Low-Wage Workers | Economics21.

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