Companies forced to disclose CEO-workforce pay gap

Padawanbater2

Well-Known Member
"Publicly traded companies will have to disclose the pay ratios of their CEOs and the median pay of their workforce thanks to a split vote by the US Securities and Exchange Commission (SEC) on Wednesday.

SEC chairwoman Mary Jo White said the regulator had no option other than to pass the rule, which passed in a 3-2 vote, with the two Republican commissioners voting against.

The commission was tasked with enforcing a number of provisions contained within the Dodd-Frank Wall Street reform act, which marked its five-year anniversary in July, including the pay-ratio rule. “It is the law and we are required to carry it out,” White said.

Opponents called the rule “pure applesauce”, “unconstitutional” and “literally a page from big labor playbook”.

The disclosure, set to come into force in 2017, will fuel a growing debate over income inequality and the minimum wage. Democrat presidential hopeful Hillary Clinton recently pointed out that “the average CEO makes about 300 times what the average worker makes”.

The vote comes two months after Massachusetts senator Elizabeth Warren attacked the SEC in a letter to White. “Under your leadership, the SEC has failed to finalize important Dodd-Frank rules requiring disclosure of the ratio of CEO pay to the median worker.

“On at least four different occasions that are documented in the public record, you promised members of the Senate that you would move quickly to finalize this rule,” Warren wrote, pointing to instances during White’s confirmation hearing in 2013 and in the months following her confirmation. “I cannot understand how and why this rule has been delayed for so long.”

SEC commissioner Luis Aguilar said the pay ratio rule was probably the most controversial rule that the committee was tasked by Congress to consider. He said that Wednesday’s vote brought the SEC a step closer to fulfilling this “congressional mandate”.

Under the final rule, companies will get to determine the methodology to find the median employee. The employee can be determined using statistical sampling and the companies are required to calculate it once every three years instead of each year. This should lower the compliance costs that many business said the rule would lead to. Additionally, companies can exclude 5% of their overseas workers when calculating the median employee.

The initial compliance costs are estimated at $1.3bn.

The rule was proposed by the SEC in September 2013 and was to be followed by a 60-day public comment period. Many expected the rule to be finalized in 2014, which did not happen.

Now that the rule is finalized, it is expected to go into effect in 2016. This means that companies will be required to publicly disclose the pay ratio in their filings in 2017.

Prior to that, the SEC is expecting a pushback from the companies and associations representing their interests.

Daniel Gallagher, a Republican SEC commissioner who voted against the rule, said he expects corporations to consider challenging the rule in court. He said similar “name and shame” legislation had run afoul of the first amendment and that the rule may be unconstitutional.

The US Chamber of Commerce is also reportedly consider pushing Congress to pass legislation to repeal the rule. Previously, the chamber argued that the rule will be too expensive and could mislead investors.

Pension funds, which have come out in favor of this rule, can use it to advance their own social agenda, according to Michael Piwowar, a Republican commissioner.

“This pay ratio rule is literally a page from big labor playbook,” he said.

Gallagher quoted supreme court justice Antonin Scalia’s dissenting view on the recent marriage equality vote. “This is pure applesauce,” he said. According to Gallagher, the SEC should not have considered this “nakedly political rule”. He said the only way he could vote in favor of disclosing pay ratio is if it was limited to full-time employees in the US.

Others, like Fabrizio Ferri, associate professor of corporate governance and executive compensation at Columbia Business School, do not believe that disclosing the pay ratio will make much of a difference. According to Ferri, compensations at US corporations are already fairly detailed and that information is already available to interested investors.

“To an institutional investor, it doesn’t make a difference. It’s good for discussion. It’s good for press, but won’t make the institutional investors vote differently,” Ferri previously told the Guardian.

According to White, the commission had received 287,400 comment letters with 15,000 unique letters. Among them, she said, were letters from shareholders who said that this additional company-specific information will be important to them when they are considering CEO compensation."

http://www.theguardian.com/us-news/2015/aug/05/companies-disclosure-ceo-workforce-pay-gap


Shocking.. republicans don't want to make it easier for people to find out the ratio between CEO pay and average employee pay.. That last quote by shareholders paints a pretty clear picture as to why..
 
I was more interested in this:

"compensations at US corporations are already fairly detailed and that information is already available to interested investors.

“To an institutional investor, it doesn’t make a difference. It’s good for discussion. It’s good for press, but won’t make the institutional investors vote differently"

So, no one really gives a shit. Pretty much par for the course when observing OP's posts.
 
no one really gives a shit.
"According to White, the commission had received 287,400 comment letters with 15,000 unique letters. Among them, she said, were letters from shareholders who said that this additional company-specific information will be important to them when they are considering CEO compensation."

Musta missed that part

Republicans don't want to make it any easier for anyone to disclose this information because they know when people hear stuff like this they take more interest in it, and they know the current situation of obscene ratios is wrong

Shit like this is an example of a tacit admission of guilt
 
"According to White, the commission had received 287,400 comment letters with 15,000 unique letters. Among them, she said, were letters from shareholders who said that this additional company-specific information will be important to them when they are considering CEO compensation."

Musta missed that part

Republicans don't want to make it any easier for anyone to disclose this information because they know when people hear stuff like this they take more interest in it, and they know the current situation of obscene ratios is wrong

Shit like this is an example of a tacit admission of guilt

No, I saw and immediately dismissed it.

Guilt? They can pay their CEO's ANY amount of money they care to...guilt, lol.
 
No, I saw and immediately dismissed it.

Guilt? They can pay their CEO's ANY amount of money they care to...guilt, lol.
No one said they couldn't, but why would they be trying to limit the access to that information?

If it was 1927, would you still be using these same arguments to defend the wealth disparity in the country?
 
Maybe it's more for the consumers of these companies products, than for shareholders. So they can see the internal ethics of the company before they buy their products....

Would bill gates pay check keep you from buying the latest and greatest Microsoft computer goodies?
 
Would bill gates pay check keep you from buying the latest and greatest Microsoft computer goodies?

the CEO of the mckesson corporation, john hammergren, makes $131 million every year.

that is another $3,011 every year for each of their 43,500 employees, or about $1.50 an hour.

which scenario do you think will boost the economy more: one person gets $131 million, or 43,500 people all have an extra $3000 to put back into the economy?

america deserves a raise, CEOs not so much.
 
the CEO of the mckesson corporation, john hammergren, makes $131 million every year.

that is another $3,011 every year for each of their 43,500 employees, or about $1.50 an hour.

which scenario do you think will boost the economy more: one person gets $131 million, or 43,500 people all have an extra $3000 to put back into the economy?

america deserves a raise, CEOs not so much.

THIS. CEOs have fooled other Americans into thinking they're somehow special 'job creators'. I've never met a CEO who created shit other than paperwork; CUSTOMERS ARE THE JOB CREATORS!

If we want an economy that works for everyone, we need to pay everyone a decent wage. An economy can't work if a majority of its participants aren't making any money.
 
"According to White, the commission had received 287,400 comment letters with 15,000 unique letters. Among them, she said, were letters from shareholders who said that this additional company-specific information will be important to them when they are considering CEO compensation."

Musta missed that part

Republicans don't want to make it any easier for anyone to disclose this information because they know when people hear stuff like this they take more interest in it, and they know the current situation of obscene ratios is wrong

Shit like this is an example of a tacit admission of guilt
"287,400 comment letters with 15,000 unique letters" - 14,999 letters written by individuals, 272,401 written by Pada
 
the CEO of the mckesson corporation, john hammergren, makes $131 million every year.

that is another $3,011 every year for each of their 43,500 employees, or about $1.50 an hour.

which scenario do you think will boost the economy more: one person gets $131 million, or 43,500 people all have an extra $3000 to put back into the economy?

america deserves a raise, CEOs not so much.

Well, what do there employee's make for money now?
 
THIS. CEOs have fooled other Americans into thinking they're somehow special 'job creators'. I've never met a CEO who created shit other than paperwork; CUSTOMERS ARE THE JOB CREATORS!

If we want an economy that works for everyone, we need to pay everyone a decent wage. An economy can't work if a majority of its participants aren't making any money.

I thought you guys were pumping the 15.00 guys. Now you are pumping what could be people making good money to get more. That CEO you are pissed at because of his pay check, what do his employee's make now? That way if we know the pay scale the argument would make more sense.
 
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